What Is CIAM (Customer Identity and Access Management)?

Customer identity and access management (CIAM) is the name of a category of commercial software solutions that allow organizations to quickly create and optimize online customer sign-up, sign-in and self-service account management experiences. CIAM solutions also help organizations secure, manage, and personalize customers’ online experiences throughout their lifecycle — from acquisition through retention.

In the most basic sense, CIAM products help you create the front door to your customers’ online experience. Like any entrance, you want it to be welcoming and look great. But it also has to have some security checks to keep bad actors out and keep your customer data safe.

We all know that a great customer experience is essential to the success of any business. Today, that experience can take place online, in whole or in part. Most brands rely far less on in-person or over-the-phone interactions. Even fast-food restaurants supplement their warbly drive-through speakers with kiosks and apps. In fact, 40% of McDonald’s revenue now flows via digital channels.

What does this have to do with CIAM?

A lot, actually!

Your CIAM system provides the process through which customers engage with your brand and your business. It’s how they login, order, and manage their accounts.

Great CIAM is more than just a gateway to create usernames and passwords. It can reduce friction for returning customers, guard against fraud and account takeover, give customers control over the communications they receive, and much, much more.

Why CIAM is essential

Consumers engaging with brands online expect a smooth and easy path to purchase. They also expect you to protect their personal and financial information. Five or ten years ago many companies coded their online sign-up and sign-in experiences themselves. But customer expectations and complexity increased faster than engineering teams could code (and re-code).

Enter commercial CIAM solutions. These packaged CIAM solutions help you develop and update your customer’s online experiences faster. They also help you keep up with ever-changing standards – think biometrics, social login, multi-factor authentication and more.

Once you get past the basics of authentication – which any identity and access management (IAM) system can do – you get to the real business value of CIAM: increasing engagement and growing revenue.

When done well, your customers enjoy a super easy and intuitive experience as they progress from the initial touchpoint with your brand to checking out via your website or app and even joining your rewards program. The smoother that journey is, the more likely customers are to stay on your site and complete their transactions.

Conversely, if the journey is clumsy, they could click over to a competitor and take their revenue with them.

Even better, a truly modern CIAM system takes the customer relationship a step further by integrating with your outbound marketing and sales CRM.

Issues that CIAM addresses

Like we said, CIAM is about security AND customer experience – and there’s a lot to that.

First, customers must trust your brand with their personal info – name, address, credit card number, and other data. As every bad actor knows, that information is valuable.

Even more valuable are some of the things attackers can do once they take over a customer account. For example, if it’s a banking account they can steal your customer’s money. On hotel and airline accounts attackers can steal loyalty reward points. And at online gaming sites they can place bets. All of that adds up. According to the FBI, Americans in 2023 lost $12.5 to online fraud.

Then there’s the cost organizations face responding and remediating these events. Hardly a day goes by without news of a major company being compromised. One study reported there were nearly nine data breaches a day in 2023, affecting nearly 1 million people on average. IBM estimates that the average data security event costs $4.45 million. And that doesn’t include the lost trust with customers.

A strong CIAM system can minimize the threat of customer account takeovers (ATO), save your organization hard dollars, protect your reputation, and safeguard customer satisfaction and loyalty.

Second, CIAM sets the stage for customer interactions. It streamlines their journey to purchase on their device of choice. Every hurdle or roadblock gives customers a reason to step out of the checkout line and leave their cart waiting. As IoT takes over IRL, your CIAM solution allows customers to connect with you across any channel – phone, email, web, mobile, kiosks, refrigerators, and more.

As a bonus, great CIAM products also address key compliance issues. Think of the many laws, rules, and policies that dictate how you can interact with your customers. Your CIAM solution can ensure you're doing all the right things to align with all relevant compliance requirements (more on that later).

The major advantages of implementing CIAM

We’ve already covered the two big advantages: improved security and better customer experience that translates into increased revenue. Let’s go one layer deeper and talk a bit about the details that really drive engagement.

Effortless sign-up and sign-in journeys

This one’s pretty simple. Every customer connection starts with creating a user account. The easier that is, the more likely people are to sign up.

Great CIAM makes that easy.

First, a modern CIAM product ensures that the experience is appropriate for your customers – including when and where they’re engaging with you. For example, do they log in once a year or three times a day? Are they likely to sign up from a phone or a desktop? How risky are the transactions they can execute once they’re in? A good CIAM product lets you create just the right experience for what your customers are trying to do, including adjusting for mobile vs desktop experience, defining password requirements, and offering multiple authentication options, including adaptive authentication, passwordless login options including biometrics and passkeys as well as social login, which allows customers to use credentials from another service, like Google or Facebook.

Customer insights and branded customer journeys

When you think about how important the sign-up and sign-in experience is, it’s amazing how hard it can be to get data about what’s working and what isn’t. This is another reason CIAM products are so valuable. Not only do you get extensive data and trends about new users, you’ll see every time they sign-in and how they interact with your website or app. With data like that, your marketing team can build detailed customer profiles and use those insights to improve your website, products, services, and support. More importantly, you’ll see where customers are getting stuck or abandoning the sign-up process so you can optimize the experience and increase conversion rates.

Self-service account recovery

Let’s be honest, some of your customers are going to log out and then forget their password. This is a common roadblock for customers. Organizations and apps vary widely about how easy (or secure) they make the process. Done poorly, it can easily lead to a huge workload for your helpdesk and frustrated customers. One study found the average consumer abandoned 16 online purchases each year due to password frustration.

That’s why great CIAM makes it quick and easy – and secure – for customers to reset a forgotten password. After all, your customer account security is only as secure as your reset password process.

Built-in security, privacy and access

Any login process is intended to ensure security and information privacy and to control access to various account details or services.

That’s the IAM part.

IAM (which is Identity and Access Management, in case you forgot) is the basic component of any CIAM solution. It’s the drummer and the bass laying down the beat while the lead guitarist and singer (the C) bring the melody and lyrics that fans fall in love with.

Navigating compliance requirements

Technology regulations are no more static – or predictable – than technology itself. The EU continues to refine and clarify GDPR in ways that may affect your business. And the world’s governments have set their sights on the implications of AI for data privacy, synthetic identities, deepfakes, and more.

As all this takes shape, brands need solutions that can adapt to ensure ongoing compliance – everywhere your customers are located.

One of the huge benefits of engaging a modern CIAM provider (versus, say, building one yourself) is that they do this for you.

Advanced CIAM vendors stay ahead of rules like GDPR – the General Data Protection Regulation in the European Union, or CCPA – the California Consumer Privacy Act, which is essentially California’s version of GDPR.

The pillars of CIAM functionality

If you’ve made it this far, you are clearly interested in CIAM, so we’re going to get a bit more into the technical details and areas that underpin CIAM functionality.

Authentication

For customers, login is basically synonymous with access. From the brand’s perspective though, it’s really about authenticating the user.

Like a bouncer checking membership cards at a private club, when you sign in a CIAM product authenticates the user to make sure the person really is who they say they are. It lets you keep imposters and fraudsters out, while simultaneously making it easy for your target audience to get in.

A modern CIAM solution enables multiple authentication protocols. The most commonly known is multi-factor authentication or MFA, in which a person receives a code via text or email to verify their identity.

Adaptive authentication is another process that works at a broader level and considers a variety of factors – such as an IP address – before granting access. One great thing about adaptive authentication is that it provides substantial security while also making it much easier for the customer than MFA.

Authorization

It’s easy to confuse authentication and authorization, but despite sounding alike they are quite different.

Authorization is tied to the access management portion of CIAM and it’s kind of like a building key card. Some key cards will open any door. Others only open one or a specific set of doors, based on your access level.

This type of control can be vital for brands, and your CIAM system should come with it built in.

User management

This is the backend of the CIAM system that manages your customer data. User management tools let you see how customers engage with your offerings and tailor their customer journey to match.

The more fully-featured CIAM services have processes embedded to simplify user management so you don’t have to dig through all the customer data manually.

Application interoperability

Some programs and systems seem to work well together, while others are like cats and dogs. Until someone builds the one solution to rule them all, your brand needs a suite of enterprise tools to manage marketing and other data. And you need a CIAM solution that can integrate with those systems.

Federation and open standards

Think of identity federation standards and open standards as distant cousins. They do the same thing – authenticate users by comparing information with other systems – but they do it differently.

SAML (Security Assertion Markup Language) is the oldest identity federation protocol still in use. It’s basic, but it works.

Newer open standards like OAuth (short for Open Authorization) and OpenID Connect, can do the same thing better. They are typically easier to use and more secure.

A good CIAM solution can manage federated and open standard exchanges.

Metrics & analytics

How well is your CIAM system working? Unless you establish and track some meaningful metrics, you’ll have a hard time answering questions from IT, Legal, or Marketing.

The best CIAM solutions integrate metrics and analytics to help measure ROI by tracking things like:

• Average time to provision new users
• Free trials that convert
• Abandoned registrations

(For a leg up here, we created a CIAM Metrics Mind Map with simple equations and tactical measures to better understand your customer journeys.)

See what CIAM can do for you

Don’t wait to take your customer experience to the next level.

Modern CIAM is as much about driving customer engagement and creating a smooth customer experience as it is ensuring the security and safety of your customers’ personal information. It’s a tool that can make or break a sale or customer relationship. You don’t want to get it wrong.

Connect with us today to see how we can help enhance your customer journeys and convert more sales.

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