Understanding Core Concepts of Identity and Access Management (IAM)


In today's rapidly evolving digital landscape, the need to safeguard sensitive information and control access to critical resources is more crucial than ever. Identity and Access Management (IAM) plays a pivotal role in achieving this goal, serving as the cornerstone of cybersecurity strategies for organizations, especially financial institutions. In this article, we'll delve into the intricacies of IAM, exploring its definition, components, benefits, and the role it plays in enhancing overall security. We will also explore the challenges and considerations of deploying an IAM tool, and, maybe most importantly, we’ll provide key criteria you should consider when selecting an IAM tool that is fit for your institution. 

Defining Identity and Access Management (IAM)

At its core, Identity and Access Management (IAM) is a framework of policies, processes, and technologies that ensures the right individuals have the right access to the right systems at the right time (i.e., the least privilege concept). IAM software is designed to manage digital identities, enforce the least privilege concept through role-based access control policies (RBAC), and provide proper governance and audit trails for any and all changes to access, users, and policies in your organization.

Key Components of IAM


The initial step in any IAM program involves uniquely labeling individuals within a system, typically through the use of usernames, email addresses, employee IDs, or another unique identifier. This unique identifier is critical to providing the ability for any IAM tool to automate the setup of each account, maintain appropriate access through entitlements or roles, as well governing the access for each unique user in an organization.


IAM systems provide a robust administrative interface to manage user accounts, assign roles, and configure access policies (i.e., define role-based access policies, or RBAC). This responsibility is typically entrusted to IT administrators or application/system owners.

User Lifecycle Management

IAM streamlines processes related to user onboarding, offboarding, and change management. This facilitates efficient management of access privileges and minimizes the risk of errors during employee transitions. Access is managed in near real-time either through APIs directly connected to the target system or by using a workflow engine to provide system administrators the information they need to properly setup and maintain accounts in each system.

Policy Enforcement

IAM systems are designed to enforce policies that govern access rights based on roles, responsibilities, and permissions. This ensures that individuals only access resources essential for their tasks: an IAM system enforces the least privileged concept.


Modern day IAM solutions often incorporate governance and auditing capabilities to ensure access policies are properly enforced along with an audit trail. This ensures compliance with regulatory requirements.

Benefits of Implementing an IAM tool

Enhanced Security

An IAM tool significantly reinforces an organization's security posture by enforcing the least privilege concept–ensuring only those that should have access to systems and data have access, and only the appropriate access–no more, and no less. 

Regulatory Compliance

Many industries are subject to stringent regulatory requirements concerning data protection and governance. An IAM tool assists organizations in compliance efforts by enforcing access controls and providing audit trails for a variety of regulatory frameworks and guidance.

Improved Operational Efficiency

An IAM tool simplifies user onboarding, offboarding, and change management processes, facilitating efficient management of user access requests. Automated the provisioning and deprovisioning of user accounts and their associated entitlements, significantly reduces the risk of human error.

Cost Savings

While there is an initial investment in implementing an IAM tool, the long-term benefits include cost savings related to reduced security incidents, streamlined operations, minimized manual efforts in managing access controls, reduced audit and examination findings, and streamlined compliance.

Role of IAM in Cybersecurity

An IAM tool plays a crucial role in any comprehensive cybersecurity strategy. It goes beyond traditional perimeter defense measures, focusing on protecting organizations from insider threats, unauthorized access, and potential data breaches. By managing identities and controlling access, IAM acts as a proactive defense mechanism against evolving cyber threats.

Challenges and Considerations in IAM Implementation

Despite its benefits, implementing an IAM tool poses challenges that organizations must navigate. Key considerations include:

User Adoption

Resistance to change and unfamiliarity with new systems can hinder user adoption. Effective communication and training are essential for a smooth transition. Organizations must consider the impact to administrators of applications, users of the IAM system, and any internal governing bodies such as internal audit or compliance.

Integration with Existing Systems

IAM solutions must seamlessly integrate with existing IT infrastructure and applications. Incompatibility issues can lead to disruptions during implementation. IAM systems are designed to work in near real-time through APIs. When APIs are not available, organizations need to consider alternative methods to meet their requirements. A workflow engine to route access requests along with the ability to ingest system information through an application security report are alternatives methods to orchestrate identity functionality when APIs are not available.


IAM solutions must be scalable to accommodate the growing number of users, devices, and applications as organizations evolve.

Balancing Security and Usability

Striking the right balance between robust security measures and user convenience is crucial. Overly complex processes can lead to user frustration and potential security vulnerabilities.

Continuous Monitoring and Updates

IAM requires ongoing monitoring, updates, and adjustments to adapt to organizational changes, policy changes, and changes to the underlying systems that are being managed.

Selecting an IAM Tool

Selecting the right Identity and Access Management (IAM) software vendor is a critical decision for organizations aiming to enhance security, streamline user management, and ensure regulatory compliance. There are a range of IAM solutions available in the market today. These solutions range from enterprise grade, highly customizable solutions that will cost north of $100,000/year to solutions that are designed for specific vertical industries (e.g., higher education, finance, etc.) that are priced well under $100,000 per year. Pricing aside, we offer some key considerations to keep in mind when evaluating IAM software vendors to ensure your unique requirements are met.

Ease of Use

IAM software is enterprise class software which requires an appropriate level of technical expertise. Defining your use cases, by audience, and assessing the vendor’s UI/UX for each audience type is critical. Vendors may have intuitive interfaces for the basic user interface, but their administrative interface may be complex. Aligning your technical acumen with the UI/UX of the IAM vendor is key to the long time success of your IAM program.

Application Compatibility

IAM solutions are often designed to be connected to each application through an API that manages user access rights. Reviewing the list of interfaces from the IAM vendor and the availability of user access and entitlement APIs from your applications themselves might be the most critical evaluation you embark on. If there is no way to manage your systems through an API or database, or if the IAM vendor has not yet integrated with your systems, you may need to evaluate alternative ways to implement your IAM program (i.e., using workflow or other semi-automated processes).


It is important to understand what workflow tooling your institution needs and align this with the capabilities of an IAM vendor. Many IAM solutions offer workflow for the compliance and audit capabilities of their software. Other IAM solutions offer workflows to automate the onboarding, offboarding, and change management of user access controls when the target application does not support API connectivity. If you are looking for one central IAM solution to govern all system access, workflow tools are a must have.

Self-Service Features

IAM solutions offer a variety of self-service features. Password reset and user registration are key features for all users. If you plan to provide the ability for every user in your organization to request their own access, then a self-service UI/UX with a shopping cart is a feature that should be considered. Lastly, organizations should consider the technical acumen of the administrators of the IAM software and the required skills to set up, configure, and maintain the IAM software as a whole. Some IAM software require scripting skills or even the ability to write code in Java to implement certain features within the solution. Other IAM vendors offer a friendly UI/UX to configure systems and associated RBAC policies, lowering the technical barrier to entry.

Industry Niche

Each industry has its own business requirements and regulations. Selecting an IAM vendor with expertise in the vertical industry your organization resides in may accelerate the adoption of your IAM program while also providing key compliance knowledge that other vendors may not possess.

Cloud or On-Prem

Historically IAM solutions were deployed on-prem, but many IAM vendors offer equivalent (or near equivalent) SaaS offerings. If the IAM vendor offers both on-prem and SaaS, make sure to evaluate the features in each solution, as they often differ. For on-prem solutions, consider the resource requirements, scalability, security, and cost to administer. For SaaS offerings, resources, scalability, administration, and security are handled by the vendor. Proper due diligence is a must for either solution, but especially for SaaS offerings. Consider vendors with SOC or other appropriate compliance certifications for your industry.

Total Cost of Ownership (TCO)

In many cases, the long term TCO of an IAM system outweighs the risks of not implementing one, however, each organization should evaluate the costs and potential return on investment (ROI) to ensure the benefits outweigh the cost. Licensing costs, administration costs related to on-prem versus SaaS installations, self-service features, upskilling of administrators to support the software, and potential time saved with the implementation of an IAM solution are all key factors in developing an appropriate TCO and ROI.

Provision meets the needs of financial institutions

Here at Provision IAM, we developed an IAM solution specifically for community-sized banks and credit unions. Our solution is designed with an easy to use, self-service interface for the configuration of API and non-API applications and the setup of your institution’s RBAC policies–no scripting or development experience required! Our workflow engine not only works for attestation campaigns of user access rights and policies, but it works with any non-API application to ensure administrators have the information they need to set up each user appropriately. As frequently as daily, the workflow engine will validate that your institution’s access policies (and exceptions) are properly configured in each and every application. With a wide variety of reports and audit trail, we also provide all of the information your auditors and examiners need when reviewing your internal controls for application access.

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