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Is CIAM or IAM Right for Your Business?

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Today’s digitally-driven business landscape has made it increasingly critical to implement reliable identity access management (IAM) solutions to ensure business operations are secure. But as organizations’ tech stacks grow, it also becomes more complex to safeguard user access to systems and protect sensitive data. In 2023 alone, there was more than a tenfold increase in attempted password attacks compared to the previous year. 

There is also a delicate balance organizations face between building a strong protective barrier against cybercriminals without making access too difficult for their customers and external end users. For this reason, a growing number of organizations are turning their attention to dedicated customer identity access management (CIAM) solutions, which have both similarities and differences to conventional IAM systems.

This guide breaks down the functions of IAM and CIAM, explains their differences, and will help you determine the right security solution for your business.

What is CIAM?

CIAM solutions are built to handle authentication, identity management, and access control for your organization’s external identities, which means users accessing your systems outside of your business. These could include customers, free end users, contractors, suppliers, and partners.

At the foundation, CIAM safeguards who has access to sensitive information and verifies identities against stored credentials. Each different user will have varying authorization levels.

End users of your systems and apps initially interact with CIAM through the signup process and later on when their identity is confirmed during login. Some CIAM processes include collecting names, phone numbers, emails, and any relevant information, storing that data in a secure system, governing authentication procedures for users (e.g., MFA and biometrics), checking login attempts against stored credentials, and deciding which data different users have access to.

Some CIAM platforms are managed on-premises, but these solutions can be more vulnerable to security challenges and data breaches. Most CIAM solutions are run through Identity-as-a-Service (IDaaS) platforms, which are cloud-based service models revolutionizing the way businesses approach identity and access management.

Also read: Who owns customer identity?

What is IAM?

IAM is an internal-facing identity management solution that functions similarly to CIAM, but it is targeted to users within your organization and serves to improve internal operational efficiency. Implementing IAM solutions helps the IT department both increase security across the organization as well as reduce support costs. Its primary use is to grant employees access to the data that is necessary for them to succeed in their roles and only specific sensitive data is accessible by certain individuals.

IAM allows you to centrally manage permissions based on who is signed in (authentication) and who has permissions for use (authorization) within certain systems. IAM solutions are also built to handle complex access privileges in order to meet a variety of authorization levels, especially within larger organizations.

IAM systems are similar to CIAM in that they use particular sign-in systems for verification like single sign-on (only requires one sign-on for multiple apps) and 2FA. IAM systems can also be deployed on-premises, but like CIAM, cloud-based IDaaS subscription models offer a higher level of security and data protection.

CIAM vs. IAM: The differences

While quite similar in many ways, CIAM and IAM have their distinct differences, which includes their intended target audience, where the user experience focus is, security and privacy concerns, scalability requirements, and integration needs.

Target audience

The primary target audience of a CIAM is external customers, partners, suppliers, etc. Essentially, anyone who needs to access your systems that are not part of the internal organization interacts with your CIAM system. IAM, on the other hand, targets your internal employees and anyone who is part of the organization, including contractors and other internal stakeholders.

Note that these use cases tend to be fuzzy and depend on the organization. Sometimes stakeholders like contractors interact with both IAM and CIAM systems depending on the app they are trying to access.

User experience focus

A major goal of using CIAM solutions on the user experience side is ensuring customer satisfaction. 60% of US-based external users said they gave up accessing an app in the last month because they forgot their password. If the user experience is too difficult, clunky, or buggy, users will drop off and customer satisfaction will plummet.

With IAM, the focus is on employee productivity, as well as lessening the cost and time spent by the IT department for support. IAM solutions typically prioritize security over functionality with not much emphasis on user experience or intuitiveness.

Security and privacy concerns

CIAM solutions are intended to protect external data privacy and address privacy and compliance with a broad array of regulations such as GDPR, CCPA, etc. If you have thousands of users accessing your systems and apps, it’s up to your organization to protect that data from potential breaches and cyberattacks. Otherwise you will be liable for your users’ sensitive information being compromised. CIAM protects customer information and manages consent in a way that builds trust and complies with legal requirements.

IAM solutions center more around internal data protection, safeguarding your organization from compromising sensitive data that could put your company and employees at risk. While the same data regulations come into play with IAM as well, the stakeholders being protected differ.

Scalability requirements

Both CIAM and IAM prioritize the ability to scale. On the CIAM front, the focus is on supporting consumer scale, which often involves managing millions of identities and handling peak loads during high-traffic periods without sacrificing the quality of service. Scalability is crucial for maintaining a positive user experience and accommodating business growth.

IAM solutions still prioritize enterprise scalability but at a slower pace and smaller scope compared to consumer-facing solutions. IAM usually manages employee and contractor identities, including onboarding and offboarding processes, across various locations and departments.

Integration needs

CIAM requires seamless integration with a wide range of customer-facing applications, from e-commerce platforms and bot protection to CRM systems and localization suites. Identity data can thus be used to drive business outcomes, like personalized marketing campaigns and tailored customer experiences, while bringing capabilities of all business and security tools to bear in the user journey.

On the other hand, IAM generally integrates with enterprise systems such as HR databases, email servers, and network infrastructure to automate the provisioning process and ensure consistent application of security policies.


CIAM (Customer IAM)

IAM (Identity & Access Management)

Target Audience

External users (customers, partners, citizens)

Internal users (employees, contractors)

User Experience Focus

Customer satisfaction and engagement

Employee productivity and efficiency

Security and Privacy Concerns

Protecting customer information, managing consent, compliance with external regulations (GDPR, CCPA)

Protecting internal data, enforcing access policies, and monitoring for security threats

Scalability Requirements

Must support consumer scale with potentially millions of identities, handle high traffic volumes

Designed for enterprise scale, managing thousands to tens of thousands of identities, within organizational boundaries

Integration Needs

Customer-facing applications and services (bot protection, CRM, localization)

Enterprise systems (HR databases, email servers, network infrastructure)

Is CIAM or IAM right for you?

To determine whether CIAM or IAM solutions are the right call for your business, you first need to evaluate your organizational needs and goals. Do your priorities lean further towards fostering a seamless consumer experience and the ability to safely and securely scale your customer base, or are you more inclined to ensure the scalability of your enterprise internally and protect your sensitive company data? The answer may be a combination of both.

Another important factor to consider is whether you are currently able to meet security and compliance requirements. Your organization may prioritize one or both of these options, but specific regulations and laws also need to be abided by.

Lastly, assess your organization’s integration and scalability needs. As mentioned, integration and scalability apply to both CIAM and IAM solutions. It’s up to you and your organization to decide how your CIAM and IAM needs may change or expand within the next year, five years, or even ten years.

In essence, CIAM is right for you if:

  • You have a significant external user base

  • You prioritize user experience

  • You need to comply with consumer privacy regulations

IAM is right for you if:

  • Your priority user base is internal

  • Productivity and efficiency are your top priorities

In some cases, organizations might need a hybrid solution that has elements of both CIAM and IAM, or they may need dedicated solutions for both these aspects. This is particularly true for organizations that operate large consumer-facing applications but also maintain significant internal IT infrastructure for their workforce. For example, while banks need robust CIAM, they also require IAM.

Drag-and-drop CIAM with Descope

Whether prioritizing internal efficiencies and security with IAM or aiming to enhance customer engagement and satisfaction through CIAM, selecting the right solution requires a strategic approach tailored to your organization’s unique needs. 

For those looking to refine their external user interaction and security, Descope offers a comprehensive CIAM solution that simplifies the complexity of user authentication, onboarding, and data protection. 

With Descope's no / low code CIAM platform, organizations can not only streamline the user experience across customer-facing applications but also strengthen their defenses against bots, credential stuffing, and password-based attacks. Our visual workflows help hundreds of organizations implement CIAM quickly as well as adapt to changing user needs without modifying the codebase.

Fig: Drag-and-drop magic links with Descope
Fig: Drag-and-drop CIAM with Descope

Sign up for a Free Forever Descope account to get started on your CIAM journey! Have questions about our platform or an active enterprise project? Book time with our team.