This is Part 2 of our “Identity and Access Management” blog series. Here is Part 1, where we introduced the concept of IAM in detail. Following this, in Part 3, we will discuss the components of IAM in detail.
In this Part 2, let’s closely look at the benefits and risks of IAM for organizations. In today’s organizations, IAM has become a crucial component due to digital and electronic access to tools and resources. As a rule of nature, almost everything that has advantages also has disadvantages, no matter how minor. So, kindly read through and share on your social handles.
5 Key Benefits of IAM
Identity and Access Management (IAM) manages user identities, company resources, and the allocation of access and authority in the digital system to ensure that the right user handles the right data or resource. IAM offers several important benefits:
1. Security of data and identity
A digital workspace with remote working roles has increased the risk of data breaches in the 21st-century work environment. Previously, all company’s data, tools, and resources used to be managed in a private building. Company computers access files stored on local databases using local networks. However, in 2023, with remote opportunities, employees access the company’s files from personal computers or cafes. This increases the risk of identity theft and data breaches at the company. There has never been a more important time to build a sophisticated IAM system, making security its most important benefit.
2. It supports collaboration and productivity
IAM allows companies to collaborate easily with other companies, guests, and contributors. This results in more productivity and seamless operation in the workplace. Activities that used to consume a lot of time through physical processes of filling and submission can now be completed quickly. By empowering other parties, such as contributors or guests, tasks can be finished within a few minutes. IAM provides limited access to these types of profiles (i.e., contributors and guests). Permission is given to these accounts to accelerate the achievement of work goals. However, resources of higher authority are secured and kept inaccessible to guests or profiles that do not require access.
3. IAM helps with compliance
Compliance becomes easier through IAM as access is only granted to specific individuals. Meanwhile, others are limited from accessing sensitive data. Compliance is not just about the acquisition of new technologies and tools but also how those technologies can be properly utilized for the right purpose. With IAM, there is segregation of duties (SoD) and the principle of least privileged (PoLP) where needed. This approach actively maintains the sensitivity of data and prevents fraud or identity theft.
4. Improves user experience
Organizations that use several systems or have a growing catalog of applications will need to input usernames/emails and passwords multiple times. However, with IAM, a single login using single sign-on (SSO) can access all necessary resources. This saves time and reduces stress, resulting in an increase of productivity and a more seamless user experience.
5. Reduces workload for the IT department due to the centralized control point
IT administrators can automate and manage all user profiles from one single interface. This central control point streamlines the workload that results from the manual one-on-one management of each user account. This central control interface increases productivity and enables the IT team to implement more protective security features.
Risks associated with IAM
Identity and Access Management has numerous benefits, including those described above. However, these benefits do not eliminate the dangers associated with implementing an IAM system within an organization. Some of these risks relate to human errors, which can significantly impact businesses. Some of the risks to be aware of are the following:
1. Defining roles and responsibilities incorrectly
The human resources department and other business leaders in the organization must collaborate to carefully structure the access given to each role. To do this, each role’s responsibilities must be written out. Clearly defining and documenting responsibilities will inform which permissions to assign to a role. Without this clarity, there’s a risk of granting excessive access to the wrong individual. It is important to remember that IAM is about the right person getting the right access for the right reasons at the right time.
2. Lack of user awareness
Unless educated, users may not know the risks associated with their accounts. Understanding that a hacker can gain system access through their errors will influence individuals’ conscientiousness in adhering to security best practices. These practices include using strong passwords, enabling multi-factor authentication, avoiding unverified links (phishing scams), and reporting suspicious activities. Another crucial aspect is the immediate reporting of compromised accounts.
3. Insider threat and abuse of access
Collusion is one of the easiest ways for corruption or attacks to thrive. The IAM system is vulnerable to such a weakness because an employee with access can decide to abuse it and work with external agents to leak sensitive information. This could compromise the organization’s security architecture, thereby posing an insider threat to the entire system.
4. Complexity in implementation
IAM systems can be challenging to set up and maintain since they necessitate experience and professional understanding in areas like security, access restrictions, data, and identity management. As a result, there may be a greater possibility of errors and wrong configurations resulting in security risks and data breaches.
5. Delayed Implementation
Setting up a sophisticated IAM system will require upgrades, multiple deployments, and re-configurations. If the IT team doesn’t create a well-defined roadmap for step-by-step implementations, they might miss or delay many updates. This could also cause a complete deviation from the organization’s IAM objectives.
6. Integration issues
IAM is a framework of many components that plug together to make a functioning system. These different components can have different ecosystems supporting their functionality. While this is not much of an issue, it can introduce compatibility issues that can open up loopholes for security vulnerabilities.
7. Single point of failure (SPoF)
If the system is not well designed or implemented, the IAM system can be the downfall of an organization. A Single Point of Failure (SPoF) could assist a hacker in gaining access to the system. This could lead to account compromise and the breach of both sensitive and non-sensitive data.
8. Compliance challenges
Regulations protecting users’ data are becoming increasingly sophisticated, which makes compliance even more challenging. Additionally, the associated penalties for non-compliance are severe. Understanding this should enhance the care taken in designing and implementing IAM systems. A single data breach mistake could result in fines amounting to millions of dollars.
9. In-frequent audit
Understanding the risks described above necessitates frequent system audits. Regular audits can identify loopholes from prior integrations and configurations. Human errors, whether from IT administrators or general users, are immediately detectable. Maintaining current IAM practices and security policies is equally important and can be quickly identified for corrections during audits.
IAM is not a choice but a necessity for organizations — a requirement that must be met. Its advantages outweigh its disadvantages, i.e., the risks. More importantly, if the IT team appropriately manages these risks, there will only be positive news to share. Setting up an IAM system indeed requires significant investment and human power. However, it’s undeniable that the benefits and financial rewards of this investment are substantial. Firstly, the company significantly improves its chances of avoiding fines because a well-maintained IAM system protects the organization from non-compliance issues. Not to mention, it creates a fluid working atmosphere and enables faster delivery of services/tasks by employees, leading to increased revenue. Therefore, building and maintaining a robust IAM system is indeed a worthwhile investment.
As a blockchain technology company creating solutions in the identity management ecosystem, we know the impact and importance of IAM in an organization. More reason Identity.com doesn’t take a back seat in contributing to this future via identity management systems and protocols. We also belong to the World Wide Web Consortium (W3C), the standards body for the World Wide Web.
The work of Identity.com as a future-oriented company is helping many businesses by giving their customers a hassle-free identity verification process. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable gateway passes. Please get in touch or see our FAQs page for more information about how we can help you with identity verification and general KYC processes.