1 Management Summary
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 analyse 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 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. With CIAM, similar kinds of information 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 identify federations to allow users from other domains to get authenticated and authorized to external resources. Traditional IAM scales in well-defined 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 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.
The CIAM market is mature, with many vendors offering standard and deluxe features to support millions of users across almost every industrial sector. IT departments should welcome CIAM initiatives, as they provide an opportunity for IT, usually considered a “cost centre”, to closely team with Marketing, a revenue producing centre.