CIAM as a Key Factor in the Digital Transformation

Digital Transformation is one of those buzzwords (technically a buzzphrase, but buzzphrase isn’t a buzzword yet) that gets used a lot in all sorts of contexts. You hear it from IT vendors, at conferences, and in the general media. But Digital Transformation, or DT as we like to abbreviate it, is much more than that. DT is commonly regarded as a step or process that businesses go through to make better use of technology to deliver products and services to customers, consumers, and citizens. This is true for established businesses, but DT is enabling and creating entirely new businesses as well.

When we hear about DT, we think of smart home products, wearable technologies, connected cars, autonomous vehicles, etc. These are of course mostly consumer products, and most have digital device identity of some type built in. Manufacturers use device identity for a variety of reasons, to track deployed devices and utilization, to push firmware and software updates, and to associate devices with consumers.

To facilitate secure, privacy-respecting, and useful interactions with consumer of DT technologies, many companies have turned to Consumer Identity and Access Management (CIAM) solutions. CIAM solutions can provide standards-based mechanisms for registering, authenticating, authorizing, and storing consumer identities. CIAM solutions usually offer identity and marketing analytics or APIs to extract more value from consumer business. CIAM is foundational and an absolutely necessary component of the DT.  

CIAM solutions differ from traditional IAM solutions in that they take an “outside-in” as opposed to the “inside-out” approach. IAM stacks were designed from the point of view that an enterprise provisions and manages all the identities of employees. HR is responsible for populating most basic attributes and then managers add other attributes for employee access controls. This model was extended to business partners and B2B customers throughout the 1990s and early 2000s, and in some cases, to consumers. Traditional IAM was often found lacking by consumer-driven businesses in terms of managing their end-user identities. HR and company management doesn’t provision and manage consumer identities. Moreover, the types of attributes and data about consumers needed by businesses today was not well-suited to be serviced by enterprise IAM systems.  

Thus, CIAM systems began appearing in the 2010s. CIAM solutions are built to allow consumers to register with their email addresses, phone numbers, or social network credentials. CIAM solutions progressively profile consumers so as not to overburden users at registration time. Most CIAM services provide user dashboards for data usage consent, review, and revocation, which aids in compliance with regulations such as EU GDPR and CCPA.

CIAM services generally accept a variety of authenticators that can be used to match identity and authentication assurance levels with risk levels.  CIAM solutions can provide better – more usable and more secure – authentication methods than old password-based systems. Consumers are tired of the seemingly endless trap of creating new usernames and passwords, answering “security questions” that are inherently insecure, and getting notified when their passwords and personal data are breached and published on the dark web. Companies with poor implementations of consumer identity miss out on marketing opportunities and sales revenue; they also can lose business altogether when they inconvenience users with registration and password authentication, and they suffer reputation damage after PII and payment card breaches.

In addition to common features, such as registration and authentication options, consider the following functional selection criterion from our newly published Buyer’s Guide to CIAM. Compromised credential intelligence can lower the risks of fraud. Millions of username/password combinations, illegally acquired through data breaches, are available on the dark web for use by fraudsters and other malefactors. Compromised credentials intelligence services alert subscribers to the attempted use of known bad credentials.  All organizations deploying CIAM should require and use this feature. Some CIAM solutions, primarily the SaaS vendors, detect and aggregate compromised credential intelligence from across all tenants on their networks.  The effectiveness of this approach depends on the size of their combined customer base.  On-premises CIAM products should allow for consumption of third-party compromised credential intelligence.

Lastly, CIAM solutions can scale much better than traditional IAM systems. Whereas IAM stacks were architected to handle hundreds of thousands of users with often complex access control use cases, some CIAM services can store billions of consumer identities and process millions to hundreds of millions of login events and transactions.  

Over the last few years, enterprise IAM vendors have gotten in on the CIAM market. In many cases they have extended or modified their “inside-out” model to be more accommodating of the “outside-in” reality of consumer use cases. Additionally, though traditional IAM was usually run on-premises, pure-play CIAM started out in the cloud as SaaS. Today almost all CIAM, including those with an enterprise IAM history, offer CIAM as SaaS.

Thus, CIAM is a real differentiator that can help businesses grow through the process of DT by providing better consumer experiences, enhanced privacy, and more security. Without CIAM, in the age of DT, businesses face stagnation, lost revenues, and declining customer bases. To learn more about CIAM, see the newly updated KuppingerCole Buyer’s Guide to CIAM.

The key to success in Digital Business: Stop thinking inside-out – think outside-in​. Focus on the consumer and deliver services the way the consumer wants​Figure: The key to success in Digital Business: Stop thinking inside-out – think outside-in​. Focus on the consumer and deliver services the way the consumer wants


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