Market Description

A more detailed description and definition of the market.

Consumer Identity and Access Management (CIAM) is a sub-genre of traditional Identity and Access Management (IAM) that has emerged in the last few years to meet evolving business requirements. Many businesses and public-sector organizations are finding that they must provide better digital experiences for and gather more information about the consumers who are using their services. Enterprises want to collect, store, and analyze data on consumers in order to create additional sales opportunities and increase brand loyalty. Know Your Customer (KYC) initiatives, particularly in the financial sector, are another example of the business driver motivating exploration and adoption of CIAM.

CIAM goes beyond traditional IAM in commonly supporting some baseline features for analyzing customer behavior, as well as integration into CRM and marketing automation systems.

CIAM at first glance seems very much like Customer Relationship Management (CRM) software. However, it differs from CRM in that, with CRM systems, sales and marketing professionals are counted upon to enter the data about the contacts, prospects, and track the sales cycle. The focus of CRM is managing all processes around the customer relationship, while CIAM focuses on the connectivity with the customer when accessing any type of systems, on premises and in the Cloud, from registration to tracking. With CIAM, to some extent similar kinds of information as in CRM systems can be collected, but the consumers themselves provide and maintain this information.

Traditional IAM systems are designed to provision, authenticate, authorize, and store information about employee users. User accounts are defined; users are assigned to groups; users receive role or attribute information from an authoritative source. They are generally deployed in an inward-facing way to serve a single enterprise. Over the last decade, many enterprises have found it necessary to also store information about business partners, suppliers, and customers in their own enterprise IAM systems, as collaborative development and e-commerce needs have dictated. Many organizations have built extensive identity federations to allow users from other domains to get authenticated and authorized to external resources. Traditional IAM scales well in environments of hundreds of thousands of users.

Consumer IAM systems are designed to provision, authenticate, authorize, collect and store information about consumers from across many domains. Unlike regular IAM systems though, information about these consumers often arrives from many unauthoritative sources. CIAM systems generally feature weak password-based authentication, but also support social logins and other authentication methods. Information collected about consumers can be used for many different purposes, such as authorization to resources, or for analysis to support marketing campaigns, or Anti-Money Laundering (AML) initiatives. Moreover, CIAM systems must be able to manage many millions of identities, and process potentially billions of logins and transactions per day.

In order to reduce money laundering, cyber-crime, terrorist financing, and fraud, regulators are requiring banks and financial service providers to put into place mechanisms for “Knowing Your Customer”. Government regulators expect banks to utilize analytics to develop baseline patterns for all their customers, and to be able to spot deviations from individuals’ normal parameters. Suspicious transactions must be flagged for investigation, specifically to prevent the aforementioned criminal activities. Having IAM systems dedicated to hosting consumer identities and their associated profiles is a good first step toward KYC.

With the advent of the EU’s General Data Protection Regulation (GDPR) and other consumer privacy laws around the world, CIAM solutions have become a foundational architectural component which organizations use to capture consent. CIAM systems typically feature user self-registration facilities, which allow users to choose which attributes they want to share with businesses, and for which purposes. CIAM solutions generally make user dashboards available so that users can review and edit consent options after registration as well.

The entire market segment is still evolving. We expect to see more changes and perhaps more entrants within the next few years. Several noteworthy acquisitions have taken place in the CIAM market over the last couple of years.

IT departments should welcome CIAM initiatives, as they provide an opportunity for IT, usually considered a “cost center”, to closely team with Marketing, a revenue producing center.

Market Direction

The analyst’s view on the trends and developments in the market.

The CIAM market is growing, with some vendors offering mature solutions providing standard and deluxe features to support millions of users across almost every industrial sector. Some vendors have just about every feature one could want in a CIAM product, while others are more specialized, and thus have different kinds of technical capabilities. For example, some regional vendors are targeting the government-to-citizen (G2C) market as well as business-to-consumer (B2C). We often see support for national e-IDs, x.509 certificates, and higher assurance authentication mechanisms in these vendors’ products compared to the rest.

Furthermore, KuppingerCole research indicates that the particular market segments that vendors choose to target often has a direct effect on the type of features available in their CIAM solutions. CIAM vendors that are primarily pursuing retail and media companies as clients tend to not have the customer-driven pressure to support high assurance authentication and complex attribute-based access controls.

There are a number of vendors in the CIAM market. Many of them are built from the ground up as consumer-facing identity solutions. Other vendors have modified their traditional LDAP-based, Web Access Management (WAM) components to accommodate consumers. Overall, this customer focused market is growing more rapidly than traditional IAM.