CIAM: The Key to Differentiated Customer Experiences

Today’s digital giants have set new customer experience (CX) standards, and in doing so, they’ve raised customer expectations across the board. For example:

• Salesforce found that 73% of customers expect companies to understand their unique needs. (Salesforce, 2022)
• McKinsey found that 65% of B2B buyers would switch vendors based on the omni-channel experience. (McKinsey, 2024)
• Okta’s Customer Identity Trends Report 2023 revealed that nearly 60% of consumers would be more likely to spend money when services offered “a simple, secure, and frictionless login process,” with the much-coveted younger demographic especially favoring such convenient experiences. (Okta, 2023)

Organizations across industries are looking for ways to improve the CX that they deliver, and those at the leading edge are recognizing that a modern customer identity capability is essential for achieving this goal.

Customer Identity’s Foundational Role in CX

Customer identity, also known as Customer Identity and Access Management (CIAM), integrates across an organization’s wider technology stack to establish a single, authoritative record of each customer’s identity.

To do so, an effective CIAM implementation fulfills four foundational identity functions:

• User registration to create the behind-the-scenes record associated with each user
• Proper authentication to establish with confidence that the users logging into accounts are who they say they are, using one or more factors to do so
• Effective authorization to provide users with the appropriate level of access to resources, applications, etc.
• Comprehensive identity management to enable customers and administrators to make updates and changes to users’ data and access

While these functions may seem straightforward or basic, they provide the essential building blocks for your organization to deliver the modern customer experiences your customers have come to expect.

Identity flows are fundamental parts of the customer journey

Identity flows are key parts of the customer journey. For example, most organizations with an online presence include the following customer interactions:

• Signing up for your service / registering an account with your organization
• Logging in to their existing account
• Providing you with consent to collect and use their data
• Updating their information and preferences
• Completing a transaction
• Resetting their password

But it isn’t enough simply to implement these flows — it’s critical that you do so in a manner that contributes to (or at least doesn’t detract from) the overall customer experience. Practically speaking, this means crafting streamlined and responsive customer journeys free of unnecessary friction.

Fighting friction with customer identity

In the digital world, we can consider friction to be anything that slows down or unnecessarily complicates a user’s interactions with your service.

While some amount of friction during customer interactions is required (e.g., to provide security controls) and perhaps even welcomed (e.g., to establish trust), unnecessary friction should be minimized or eliminated altogether. To drive home this point, consider that:

• According to research published by UserPilot, 74% of potential enterprise customers will switch to other solutions if the onboarding process is complicated. (UserPilot, 2022)
• A study from the Beryl Institute showed that 87% of healthcare patients consider their experience as important as the actual treatment outcomes. (Beryl Institute, 2021)
• And in retail, a Baymard study found that 22% of U.S. consumers abandoned an online cart because of too long, overly complicated checkout processes. (Baymard, 2025)

Compounding the problem, by causing abandonment or by inadvertently driving anonymized interactions (e.g., guest check out), friction undermines your efforts to gather the data needed to build accurate customer profiles — ultimately impairing strategic decisions and negatively impacting acquisition, retention, and overall revenues.

Fortunately, customer identity helps minimize friction in your digital channels and SaaS applications through secure passwordless authentication, progressive profiling for seamless data capture, and optimized backend processing. These measures streamline user interactions, enhancing convenience.

However, providing speedy and convenient experiences only scratches the surface of how CIAM creates positive customer experiences.

Let’s now take a deeper look…

Beyond the Basics: 5 Ways CIAM Creates Great Customer Experiences

Simply put, to deliver a customer experience that meets the expectations of today’s users, you need a modern CIAM solution. That’s because customer identity either drives or significantly contributes to many of the (often interrelated) factors that shape a user’s overall experience, including:

1. Personalization
2. Cross-channel consistency and continuity
3. Customer Loyalty
4. Privacy and consent management
5. Fraud prevention and security

1. Personalization

As a customer, there’s perhaps no better feeling than dealing with a provider who ‘gets’ you, as an individual, and who uses their familiarity with you to craft an experience that feels tailored.

A prerequisite of such personalization is the single, authoritative customer record that captures all of a user’s relevant information.

But building that record isn’t nearly as straightforward as one might expect. For example:

• Organizations often have many customer entry points and a number of channels
• An individual customer might have provided different contact information to different channels, and their information may change over time; they may also have multiple accounts, perhaps due to losing their login information
• Mergers and acquisitions can lead to significant overlap between customer databases

An effective CIAM implementation creates a single source of truth for customer identity that unifies multiple customer entry points, plus front- and back-end systems. It also provides new options for gathering the zero-party data (ZPD) and first-party data (FPD) that are becoming critical for building accurate customer profiles. Through integration with customer data software like Customer Relationship Management (CRM) systems and Customer Data Platforms (CDPs), as well as analytics tools, customer identity contributes to a richer understanding of your customers — including their preferences, behaviors, and where they may be encountering friction when accessing your services — surfacing and informing opportunities for personalized outreach and continuous improvement.

This unified, accurate, and complete view of customer identity enables seamless identity orchestration, which is required to drive the personalization — special offers, customized interfaces, preferred flows, etc. — that contributes to a positive overall customer experience.

2. Omni-channel consistency and continuity

Two things brands that are serious about customer experience do very well are maintaining consistency (e.g., of look and feel, of behavior) and continuity (e.g., of actions, state, flows, etc.) across their many channels. Implicit within both of these is personalization.

By managing omni-channel identity flows and orchestrating identity through two-way integrations, CIAM goes beyond simply making login experiences familiar across channels. It enables organizations to deliver seamless, consistent, and continuous omni-channel experiences, helping users quickly and conveniently achieve their goals.

3. Customer loyalty

Loyalty programs that reward repeat customers and provide incentives for customers to share ZPD and FPD with your organization (to feed the virtuous cycle of personalized rewards) are proven ways to foster long-term relationships. Naturally, CIAM’s ability to link a user’s activity, again, regardless of channel, with their loyalty program membership is essential to such initiatives.

However, the most successful brands recognize that earning loyalty takes more than rewards and other incentives. For example, the factors we’ve examined already — personalization and omni-channel consistency and continuity — are also significant contributors.

However, perhaps the most important factor is trust. In the privacy-conscious age (and in a world in which the availability of third-party cookies is no longer a sure thing), establishing trust and acquiring consent are prerequisites for creating loyalty, as well as for complying with regulations.

4. Privacy and consent management

Users take their privacy seriously. In fact, Okta’s Customer Identity Trends Report 2023 revealed that about 80% of all consumers considered control over their data to be important. (Okta, 2023)

So, how do you build the trust of customers so that they feel comfortable providing their data in the first place? By showing that you’re deserving of their trust.

Customers will only share data and opt in to marketing programs if they feel confident that their data is safe and being used in the way they’ve agreed to, and that sharing it will benefit them in some way — say, by providing more personalized and convenient interactions, regardless of the channel they are using to engage with your brand.

This means that brands that want to build long-term customer loyalty should:

• Be transparent about what data is needed and how it’s used to power a private, secure, and convenient experience
• Capture the customer’s clear, informed consent whenever required to collect and use their data only for that purpose
• Provide customers with tools to manage their preferences

CIAM is the foundation for all of these things.

For example, CIAM helps you automate consent management by simplifying how consent is requested, stored, and updated across all of your channels. In addition, ensure that your CDP or CRM system only contains data that customers have consented to share for marketing/personalization purposes. This level of clarity and control also helps you easily respond to consumers’ inquiries or proactively communicate policies or policy updates regarding what data you store for them.

Contributing to compliance

Because of identity’s essential role in securely connecting users to the technology and resources they need, and its proximity to sensitive data, identity as a domain is governed by an increasing — and increasingly complex — array of data privacy (e.g., HIPAA in healthcare, GLBA in finance, GDPR in the EU, LGPD in Brazil, CCPA/CRPA in California, etc.) and open data sharing regulations and standards (e.g., PSD2, UK Open Banking, the Dodd-Frank Act Section 1033, FDX).

Among other things, these regulations typically require you to:

• Implement effective safeguards to protect credentials, Personally Identifiable Information (PII), Protected Health Information (PHI), and other personal and sensitive data highly valued by cybercriminals
• Put users in control of their own data — how it’s used, by whom, for what — through mechanisms that allow them to share data across digital touchpoints, to provide consent for use, and to take their data with them if they choose to end a relationship with a service provider
• Interoperate within the open data economy — an emerging web of industry (e.g., healthcare, finance) and identity (e.g., social login) ecosystems that will enable vast new consumer value and efficiencies while also preserving data privacy and security.

Through a combination of attributes and capabilities — including centralized management, built-in interoperability, user-friendly identity management features, cutting-edge security measures, and appropriate data management and residency practices — Customer identity can help address the compliance burden, dramatically reducing the costs associated with meeting the many needs of regulations, frameworks, and standards (Forbes, 2025).

5. Fraud prevention and security

In today’s threat environment, Identity is Security.

For instance, Okta’s The State of Secure Identity Report 2023 (Okta, 2023) highlights common threats such as signup fraud, credential stuffing, and multifactor authentication (MFA) bypass—challenges faced by nearly every organization with an Internet-facing login box or API.

At the same time, AI agents are increasingly being used to enhance customer experiences. For example, virtual assistants can streamline customer support by resolving common inquiries, AI-powered recommendation engines personalize user experiences, and automated financial advisors provide real-time investment insights. However, as AI agents access sensitive data and perform critical tasks on behalf of users, organizations must manage the risks of unauthorized access, outdated permissions, and weak authorization controls.

These attacks, both human and non-human, have major consequences for the organizations being targeted, who incur costs to investigate and remediate abuse and who face severe regulatory penalties and reputational damage should a data breach occur. For example, IBM’s 2024 Cost of a Data Breach report (IBM, 2024) highlights the average cost of a breach across various industries, with costs reaching millions of dollars in sectors ranging from healthcare (with an average breach cost of $9.77M USD).

A robust CIAM implementation creates strong safeguards — before, at, and after login — that aren’t part of your wider security stack, including:

• Host, platform, and application-layer defenses to detect and respond to malicious entities such as bad bots before they can even access the login box or API
• Login-layer defenses that prevent fraudulent signups and account takeovers
• Post-login defenses to secure sessions and authorization controls to manage access (e.g., viewing sensitive information, conducting transactions, updating account info, changing security settings) after a user has authenticated
• Observability tools that allow you to identify potential attacks, quickly respond to them in real time, share information with security operations tools (e.g., SIEM, SOAR, XDR), and optimize your security posture
• Strong encryption, modern hashing algorithms, API security, robust data management, and system access procedures — and much more behind-the-scenes infrastructure

Crucially, a modern CIAM platform can implement these safeguards without introducing unnecessary or overly burdensome friction for users. Plus, an extensible CIAM platform can also provide the ability to:

• Engage an identity proofing solution to verify a user’s real-world identity
• Integrate with fraud management solutions to reduce exposure to banking and credit card fraud

Beyond protecting human identities, modern CIAM solutions can also create safeguards for AI agents by providing authentication and authorization frameworks to verify AI identities and their permissions.

Wrapping Up

To meet revenue objectives and stay relevant in the digital-first world, organizations of all sizes in virtually all industries need to enable great customer experiences.

At the same time, they also need to comply with strict regulations governing data privacy, customer control, and interoperability — a task made all the more challenging when a company operates in multiple jurisdictions.

Existing at the intersection of customer experience, security, privacy, and analytics — and providing essential tools needed to manage customer identity through the entire lifecycle — CIAM provides an answer.

You can read more about how a modern customer identity infrastructure can support seamless and secure growth in Why Customer Identity?

And if you’d like to learn more about other important CIAM topics, please consider these additional resources:

• Customer Identity and the extensibility imperative
• Why Auth0?