What is CIAM: Benefits, security features, build vs buy decision in 2024

Every detail counts when a brand can make things easier for their customers and provide an experience that makes those customers feel as though both their time and data are respected. Today, technologies that help manage your customer’s identity and access are a must-have for delivering seamless CX.

Keep in mind, data privacy is only increasing in popularity and importance for consumers – and their willingness to give you their data begins with your customer experience.

After all, 43% of U.S. consumers say they wouldn’t give companies permission to collect their personal data. The one caveat? They will (88% of them at least) give you their data if they trust your brand.

With such high customer expectations and so much on the line, there’s one technology brands have at their disposal to ensure customer data security, convenience, and empower internal employees: CIAM.

What does CIAM stand for?

CIAM stands for customer identity and access management.

CIAM: What is CIAM – customer identity and access management?

Customer identity and access management (CIAM) solutions help provide a unified customer login experience while reducing the risk of a data breach.

CIAM systems work with a brand’s front-end architecture and tech stack (website, checkout, etc.) to collect customer information from a variety of sources and store it in a centralized location.

CIAM is particularly important and relevant to brands not only for its front-end customer login experience and backend employee 360-degree visibility of a customer profile, but also because of the secure management of that customer identity. 

CIAM solutions typically offer a host of features, including:

1. Customer registration
2. Self-service account management
3. SSO (single sign-on)
4. MFA (multi-factor authentication
5. Preference and consent management
6. Access management
7. Directory services
8. Governance of data access

The best CIAM solutions ensure a secure, seamless customer experience at extreme scale and performance, no matter which channels (web, mobile, etc.) customers use to engage with a brand.

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IAM vs. CIAM

Identity and access management (IAM) systems are similar to CIAM systems, but it’s important to know the difference.

IAMs manage and protect identities of individuals (including authentication and access), within an organization. IAM is used when employees join, leave or change roles within a company and need updates to their user account privileges and access. 

CIAM systems manage and protect identities of individuals (including authentication and access), that are external to an organization. For example, when a customer registers for an account, makes changes to that account (manually or through tracked actions taken on a website), or asks to be removed from a company’s list.

CIAM is used for both B2B and B2C organizations, where the “C” in CIAM can be a business itself rather than an individual customer.

Core functions of a customer identity and access management (CIAM) solution

Customer identity and access management software creates a single cloud platform that enables brands to do three things:

1. Capture and manage customer identities to remove friction at registration and log-in
2. Build robust customer profiles based on first-party, permission-based data
3. Orchestrate and govern customer profiles in near real-time to other customer engagement solutions to deliver personalized experiences

These capabilities became more critical during the global pandemic, which forced brands to go digital in a hurry.

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Essential features of a CIAM solution

Companies need identity and access management solution for several groups of end users: customer, partners, employees, suppliers, and service providers to list a few. Each group requires its own security policy, authentication, and user experience (UX).

If you’re in the market for a CIAM solution or software, look for the following foundational features:

• Scalability
• Single sign-on (SSO)
• Multi-factor authentication (MFA)
• Centralized user management

Scalability

Unlike IAM management features in supplier management or workforce management solutions, which deal with lower volume of users, CIAM is purpose-built to scale to millions of users. Companies should consider customer identity and access management software that securely handles peak volumes of customers and spikes in traffic during holidays. Your CIAM solution must serve your users at scale and dynamically without causing friction in the UX.

Single sign-on (SSO)

Single sign-on (SSO) is an authentication method that enables individual users to securely authenticate multiple applications or websites by using just one set of credentials.

Google’s G Suite is a common example, where logging into your Gmail automatically logs you into YouTube, G-Drive, and other Google products. Another popular SSO use case is social sign-in or social sign-on, which uses information from social networking sites to facilitate logins on third-party applications and platforms. The process is designed to simplify the registration and sign-in experiences, providing a convenient alternative to account creation.

Multi-factor authentication (MFA)

Multi-factor authentication is an authentication method that uses two or more factors to identify the user in addition to username and password. It’s a layered approach to securing data and applications to prevent unauthorized user access and decreases the likelihood of a successful cyber-attack.

Multi-factor authentication method is typically categorized in one of three ways:

• Something you know – a user created PIN or answer to a security question
• Something you have – OTP (one-time password) sent to your mobile or email; a software-based authentication token like Google Authenticator
• Something you are – biometrics like face, fingerprint, retinal scan, etc.

Centralized user management

A unified view of customers can be a significant competitive advantage. CIAM solutions help achieve this through a centralized, data-rich customer profile that act as the single source of truth. Centralized user management eliminates data silos and duplicate data; everything to know about a user is in single place from where admins can quickly grant and revoke permissions.

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The benefits of CIAM

The top benefits of CIAM surround three key areas:

1. Transparency
2. Documentation
3. Compliance

In an era of increasing data rights and regulations like GDPR and CCPA, businesses need to be clear about when, why, and how they are collecting a customer’s information, and maintain documentation of when and where that data was collected.

CIAM is crucial to helping organizations manage data and profiles: 

• Maintains proof of how, when, where, and why you collect and process customer data
• Provides transparency into how you collect and use customers’ personal data
• Addresses the toughest requirements of consumer data privacy regulations
• Implements a holistic solution for managing customer profiles, preferences, and consent
• Stores versioned consent records for up to seven years in our audit-ready vault
• Ensures that consent and preferences are consistently enforced through centralized and simplified data governance and orchestration
• Reduces costs and IT complexity by managing digital identities, consent, authentication, and authorization from a single platform
• Protects against business and regulatory risks by defending sensitive data and intellectual property with dynamic access control 

CIAM gives customers the power of preference management. Customers can easily login, see what data has been collected, and edit and manage which nurture streams they are a part of, update their data (new emails perhaps, a new phone number or address, etc.), and control their own experience with your organization.

In this way, a CIAM helps customers feel more like partners to your brand, which helps build loyalty and trust.

Here are key ways a CIAM boosts trust and loyalty:

• By using customizable, preconfigured workflows to capture customers’ consent and preferences at each permission-based touchpoint
• By empowering customers to manage their own experiences through customizable, self-service preference centers
• By onboarding customers quickly with intuitive user registration

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As a CIAM reduces security risk and increases customer control of their own data, the system is saving internal teams from additional manual work.

Even better, the CIAM is building a unified customer profile that marketing, sales, and customer experience can use throughout a customer’s sales cycle and journey. 

• For marketing, the team can aggregate the data to determine customer personas to market toward and gain new prospects. 
• For sales, the team can easily get a clear picture of who their prospect is, compare them to similar profiles in the account, and personalize their pitch to build the best relationship and secure the best sale. 
• For CX, the team can quickly see and understand a customer’s full journey and all touchpoints with the company, helping the customer easily access information they need based on past interactions. 

Data protection is a business requirement

Your customers expect your technology solutions to work – all the time. Technology has advanced, as has customer expectations for that technology and how a company uses it to provide a superior customer experience.

And data security for customers is no longer an afterthought. Customers have wised up to how data is collected, and want more say and control over their personal information anywhere they can get it.

Giving them easy access to their data, showing them where and how you collected it, and ensuring their data is safe with you builds a strong relationship on a foundation of trust.

A CIAM system is the technology you use to do it, but the desire to treat your customers as friends, looking out for their best interests, is your ultimate why behind implementing the technology in the first place.

As Microsoft completely removes passwords from consumer accounts, the benefits of customer identity and access management (CIAM) are in the spotlight. The news shows how brands are prioritizing registration, login, and authentication as they seek to elevate customer experience and security.

How can CIAM address both critical issues? To get the answer, it’s important to understand what it does, where it came from, and where it’s going.

What does CIAM software do?

A CIAM solution is often equated to a brand’s digital front door. It enables customers to create an identity with an organization and then identify themselves across digital properties to consume products or services.

Creating an identity typically involves online account registration. With CIAM software, brands can quickly and effortlessly build registration screensets that render natively across different devices (web, mobile app, in-store kiosks, and more).

The software stores the first-party, permission-based data it collects in profiles, which brands can build and enrich over time. It also integrates with engagement systems and orchestrates data between them. This bi-directional flow means both engagements and profiles are kept up to date.

When customers return to a brand’s digital property, the software logs them in and authenticates them based on their credentials. A username/password combination is the most common method, but social login, biometric, and passwordless authentication are options.

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CIAM evolution reveals CX benefits

In the early 2010s, most brands worked with identity access management vendors to build their customer registration, login, and authentication experiences.

But IAM vendors specialized in identifying employees and giving them access to resources. They couldn’t improve customer experience, operate on the necessary scale, or provide reliable system performance.

Disruptive start-ups seized the opportunity. They created SaaS CIAM solutions that met security and performance requirements. Equally as important, they addressed the need for better CX.

Businesses quickly realized the potential of this welcoming, yet secure, digital front-door strategy.

1. Seamless experiences – Create frictionless, secure registration and log-in flows across channels and devices.

2. Build customer trust – Deliver transparency and control customers demand through CIAM’s easy integration with enterprise consent and preference management solutions. Collect consent and communications preferences directly from consumers, manage these choices as terms and business needs change, and track all of this data in an audit-ready vault.

3. Improve acquisition rates – Design great experiences that are tailored to specific digital channels. For example, brands can turn anonymous visitors into known users by offering a newsletter sign-up requiring only a name and email.

4. Boost checkout rates – Quickly design, deploy, and test a variety of checkout experiences to identify the most optimal workflow.

5. Better personalization – CIAM profiles build as customers share more data in exchange for offers, content, and deals. With this progressive profile, you can orchestrate updated customer interests to analytics and engagement systems. This increases your ability to deliver relevant, timely, and personalized CX to strengthen brand loyalty.

6. Stronger loyalty – Creating a seamless experience across touchpoints using passwordless authentication removes friction and strengthens customer retention.

8. Faster time to value – With one centralized CIAM solution, a company can reuse existing screensets and workflows for multiple use cases, speeding time to value with product launches.
9. Customer insights – Helps set a foundation that companies can use to future-proof their business.

Security benefits of CIAM

Account takeover attacks (ATO) are a major threat to consumers and brands around the globe. Sophisticated CIAM solutions  offer rule-based and AI/ML-based approaches to address the ATO threat.

In a rule-based approach, IT teams can define a suspicious event, such as multiple log-in attempts or a change in country. If a suspicious user triggers a defined event, risk-based authentication flows activate. This forces the user through additional identification steps before being granted access.

Due to the huge amounts of data involved and state-of-the-art algorithms available, AI/ML is a promising technology to fight ATO attacks. In this approach, AI/ML models provide a risk score for every authentication request. The score defines a relevant authentication flow and helps balance security with user experience.

In addition, CIAM helps IT teams constantly monitor authentication activity, identify suspicious trends that require special attention, and take steps to improve the company’s security posture.

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Trends driving CIAM adoption

CIAM is well positioned to help brands grow for four key reasons.

1. The skyrocketing value of first-party customer data. With Google preparing to end third-party cookies in Chrome, customer acquisition based on digital advertising faces increased uncertainty. Many brands are pivoting their engagement strategies to focus on customer retention. This requires them to prioritize permission-based, first-party customer data, which is a strong suit of CIAM.
2. Frictionless experiences. The move toward passworldless authentication will continue. Advanced CIAM solutions know how to offer the right authentication based on risk and customer preference, whether it’s biometric, push notification, an email magic link, or other method. This helps boost conversion rates while reducing security concerns that come with passwords.
3. Global scalability. Brands can’t risk losing customers because of a fragmented experience across regions. With CIAM, they can ensure seamless and secure account access no matter where customers are.
4. The rise of omnichannel. After COVID, customers expect seamless experiences, no matter if purchases are made in-store or online. And they expect relevant product recommendations. A brand’s ability to deliver hinges on its understanding of who customers are at each touchpoint and its ability to move customer data to relevant engagement systems in real time. With CIAM, brands can achieve both goals.

According to Aberdeen Strategy and Research, integrating CIAM into the digital customer experience has a cumulative impact that results in higher total revenue and higher lifetime value per customer.

CIAM solution: Should you build, adapt, or buy?

Businesses looking for a CIAM solution typically face three choices:

1. Build a homegrown system
2. Adapt current identity access management (IAM) capabilities
3. Partner with a CIAM vendor

How do you know which option is right for your brand? Let’s take a closer look at each.

The homegrown CIAM solution

Brands use the DIY approach to maximize security and control, but there are downsides.

First, it requires a lot of resources for the initial setup. Then, integrating new technologies requires additional custom coding and pricy connectors. The burden of ongoing maintenance and compliance rests solely on the IT organization, adding ongoing costs.

The result is an inflexible system, which can mean missing out on the latest customer acquisition techniques.

While today’s CIAM hot topics include social log-in, password-less authentication, and biometric registrations, the next set of innovation is just around the corner. Under the homegrown approach, keeping up with this constant evolution is difficult and costly.

In addition, a DIY system leaves companies more beholden to the original, in-house developers, who may take their knowledge with them when they leave the organization.

The IAM adaptation strategy

Some companies adapt an existing IAM capability to unify their data, or they deploy an off-the-shelf IAM solution to do the job. This cuts labor costs and performs better than a homegrown system.

However, it still falls behind the optimal level businesses need today to acquire and nurture consumers across their channels. Here are some reasons why.

Customer engagement. To deliver personalized engagements that exceed customer expectations, brands need a solution for managing customer data in a centralized and secure way. They also need to ensure the data’s availability for use in real time across engagement systems. Legacy IAM systems can’t handle this kind of CIAM functionality without major customization.

Scale. A data-driven CX strategy requires managing exponentially more data as time goes by than IAM systems are designed to handle. This includes ensuring availability and performance during massive spikes in traffic.

Data structure. To optimize omnichannel CX initiatives, brands need to activate a wide variety of customer data from multiple sources. However, IAM solutions rely primarily on highly structured, hierarchical databases and repositories.

Integrations. To connect a legacy IAM system with today’s cloud-based tech stacks, each technology would require custom coding and expensive connectors that then must be maintained. This increases costs and slows time to market.

Security. Standards like SAML, using OpenID Connect, and OAuth secures high volume API transactions on both client and server sides. These standards aren’t always supported natively by legacy IAM solutions.

Privacy and compliance. Exposure to regulatory risk has never been higher. GDPR sets fines as high as 20 million euros or up to 4% of a company’s total turnover revenue of the preceding fiscal year, whichever is higher. China’s 2021 Personal Information Protection Law (PIPL) levies fines that are up to 5% of a company’s annual revenue. Most IAM systems don’t offer the consent and preference data management capabilities to address these regulations effectively.

Teaming up with a CIAM solution specialist

Businesses also can opt to hand off CIAM functionality to a provider who specializes in managing customer identities. Best-of-breed cloud-based CIAM solutions are built with a focus on user experience, scalability, flexible implementation, and API- based security.

Partnering with a CIAM provider reduces labor, licensing, and maintenance costs, while accelerating time-to-market. This approach also provides flexibility for adjusting to new market trends and technologies, and the agility to address changing compliance requirements and reduce security risks.

Real-world examples of CIAM at work

In order to grow its business globally, FranklinCovey – a time management and executive training company – had to provide a one-of-a-kind experience while meeting customer demands.

That required a deep understanding of its customers, which in turn required acquisition of customer data.

With multiple platforms available for clients to access customized content for professional development, the Salt Lake City-based company focused on finding a solution to satisfy data protection regulations and keep its users’ personal data secure.

https://youtu.be/QO7k8ixNOsQ

Teaming with SAP, FranklinCovey raised its renewal rates by more than 30% year over year. It was able to adhere to global and regional data regulations as well as the varied privacy laws across multiple market units, including Australia, China, Indonesia, and the US. It also delivered more seamless customer engagements by offering single sign-on functionality across multiple platforms.

Moreover, the company got to market faster with a solid framework for ensuring consistent delivery across all its digital properties.

Another company, Maxim Integrated, wanted a platform that could offer real-time, relevant customer insights. With tens of thousands of transactions each day, the semiconductor company was outgrowing its legacy systems. At the same time, it didn’t know its customers as well as it needed to offer the most appropriate products and maximize selling opportunities.

With a cloud-based CIAM, Maxim Integrated boosted its e-commerce platform and achieved almost 10 times more revenue generation.

It also now has a 360-degree view of all the aspects of a customer lifecycle and journey, helping provide and orchestrate data and analytics from a single source.

https://www.youtube.com/watch?v=UID1_6R7nbA&feature=youtu.be

It’s time to up your CIAM game

Cloud-based CIAM solutions are much less expensive to implement for large enterprises than DIY solutions and get you to market in a fraction of the time.

Add the factor of outcome – a better performing, more scalable, flexible, and secure system – and it’s easy to see why enterprises are turning to specialized CIAM providers.