ID Document Verification

What is Identity as a Service ?

January 20, 2023
Woman with her face covered by a tablet. Identity as a Service has grown a lot recently and the main technology is biometric verification
Table of Content

Identity-as-a-Services (IDaaS) provides identity and access management (IAM) capabilities to organizations. It offers a convenient and scalable solution for managing user identities, authentication, and authorization in a digital environment.

IDaaS is important because it helps organizations streamline their identity management processes, enhance security, and adapt to the dynamic nature of modern digital environments. 

What is Identity-as-a-Service?

Identity-as-a-Service (IDaaS), is a cloud-based digital identity and access management solution that provides businesses with centralized platforms for authentication, authorization, and secure management of user identities. By leveraging cloud computing and adaptive authentication, IDaaS speeds up identity management, streamlines user access to digital assets, improves security, and ensures compliance with prevalent regulations.

Businesses can outsource specialized digital identity verification services to identity-as-a-service providers to focus better on core business operations.

Why is Identity-as-a-Service Important?

In an increasingly digital world, businesses must ensure user security, streamline identity management, and improve overall operational efficiency. Cloud IDaaS provides a centralized, scalable, and cost-efficient solution that delivers better digital identity management, authentication, and compliance to evolving regulatory requirements. Being automated, cloud identity-as-a-service allows businesses to reduce manual reviews, minimize possibilities of human errors or biases, and create a more secure access process. Further, outsourcing the function to identity-as-a-service-providers enables businesses to effectively manage digital identities, and reduce the risk of unauthorized access or data breaches.

There are several benefits of IDaaS. These include:

  • Improved Security: Advanced security features, such as multi-factor authentication, single sign-on, and adaptive access controls, reduce the risk of unauthorized access and data breaches.
  • Simplified Identity Management: Centralized identity management streamlines the complete access process: creating, updating, and revoking user access, thereby making it more efficient and cost-effective.
  • Scalability and Flexibility: Identity access management as a service solutions are scalable, enabling organizations to accommodate changes arising due to business growth. They are flexible and can adapt to different applications and services across diverse environments.
  • Rapid Deployment: Being cloud-based, identity as a service enables swift deployment of identity management services, without the need to set up an extensive infrastructure.
  • Integration: With its ability to integrate seamlessly with various third-party applications and services, identity access management as a service facilitates a cohesive user experience across different platforms.
  • Cost Efficiency: Leveraging the expertise of identity as a service providers, organizations can reduce technical debt and eliminate the labor and maintenance costs of on-premise infrastructure.
  • User Experience: By enabling users to access multiple applications with single sign-on capabilities, identity and access management as a service reduces friction and helps enhance user experience.
  • Compliance: With features like audit trails, reporting and policy enforcement, cloud identity as a service helps organizations adhere to industry standards and compliance requirements.
  • Updates: Identity as a service providers regularly update their capabilities to address emerging security threats, allowing organizations to benefit from the latest advancements in digital identity verification.

Challenges Associated with Identity-as-a-Service

Identity-as-a-service comes with its own set of challenges. One of the biggest challenges is the potential compromise of security, when entrusting sensitive identity data to identity as a service providers. If the security measures implemented by the identity as a service provider are weak, it can expose the organization to the risks of unauthorized access and data breaches.

Integration with existing systems can pose another challenge. Seamless integration between cloud identity as a service solutions and on-premises applications may require substantial effort and resources. Further, limited customization options may hinder an organization’s capabilities to tweak the solution according to its unique identity management needs. Such dependence on identity as a service providers can expose the organization to potential operational disruptions and subpar security.

Some of the other challenges that organizations may face with identity and access management as a service may include user adoption, compliance with data privacy regulations, and managing the entire digital identity lifecycle.

Steps to Follow for implementing Identity-as-a-Service

Cloud-based IDaaS enables businesses to centrally manage each and every user identity, authenticate, and control access to sensitive resources. Reputed identity-as a-service-providers offer granular visibility into a user’s identity, regardless of the location or device used. This empowers businesses with better access control and monitoring user activity to improve overall security.

While implementing identity as a service, businesses must consider following the steps enlisted below:

  • Objectives: Clearly define purpose for implementing identity and access management as a service. Identify specific requirements, such as the scope of identity management, security needs, integration with existing systems, and compliance requirements.
  • Risk Assessment: Conduct a comprehensive risk assessment. Identify possible security risks and compliance challenges. Assess the sensitivity of the data involved and the impact that a security breach may have on the organization.
  • Identity-as-a-Service Providers: Evaluate several identity as a service providers to choose the one that can help achieve the defined objectives. Assess them for security features, customization options, scalability, integration capabilities, and compliance with regulatory requirements.
  • Integration: Create a detailed integration plan for smooth integration of the cloud identity as a service solution with existing tech stack and IT infrastructure.
  • Security Measures: Implement robust measures, such as multi-factor authentication, encryption, secure APIs, and adaptive access controls, for enhanced security.
  • Monitoring and Audit: Track user activities, detect anomalies, and ensure compliance using continuous monitoring and auditing. Conduct regular reviews of access controls, permissions, and security configurations to identify and address potential vulnerabilities.
  • Scalability: Ensure the incumbent identity as a service providers can scale the solution according to business growth and accommodate a larger number of users, applications, and evolving security needs.
  • Backup and Disaster Recovery: Establish backup and disaster recovery procedures to protect against data loss and ensure business continuity.
  • Optimization: Assess the identity access management as a service solution for performance, effectiveness, and user satisfaction. Use feedback and insights to optimize configurations, address any issues, and adapt to the evolving technology or business requirements.

Identity-as-a-Service in Action

Businesses across industries use identity as a service to address the growing challenges in identity management, improve security, and deliver a seamless user experience. 

Some of the notable use cases and industries where cloud identity as a service is seen in action are:

  • Identity Management: Manage customer identities and access (Customer Identity and Access Management, CIAM) to digital services, websites, and applications, through features such as social login, consent management, and self-service registration. Manage employee identities (Workforce Identity Management), using single sign-on (SSO) and multi-factor authentication (MFA), to facilitate more secure access to corporate resources, applications, and data, as well as for user provisioning and streamlining onboarding processes.
  • Provisioning: Automatically provision, adjust, or revoke role-based access from the active directory, when an individual joins, changes roles, or leaves the organization.
  • Financial Services: Enhance security of financial transactions, online banking, investment platforms, and financial management applications, using multi-factor authentication, adaptive access controls, and continuous monitoring.
  • Retail and eCommerce: Authenticate customers, manage orders, and deliver personalized shopping experiences. Enable secure online transactions and protect personal and financial information of users.
  • Manufacturing and Supply Chain: Manage vendor identities and secure supply chain collaboration. Ensure only authorized personnel have access to production systems and critical manufacturing and supply chain information.
  • Media and Entertainment: Manage access to content distribution platforms, collaboration tools, and digital assets. Protect intellectual property and ensure proper content distribution rights.
  • Healthcare: Ensure secure access to patient records, medical applications, and collaborative tools for healthcare professionals, through robust authentication and access controls.
  • Government and Public Services: Maintain confidentiality and integrity of sensitive citizen information by managing citizen identities accessing online services, tax filing, and government portals.
  • Internet of Things (IoT): Maintain the integrity of IoT data and the IoT ecosystems. Manage identities to prevent unauthorized access to devices, applications, and users interacting with IoT platforms.

How Identity-as-a-Service Drives Revenue

The several benefits of IDaaS, including improved overall user experience, streamlined operations, and targeted marketing and sales strategies, help businesses enhance revenue. 

Some of the ways in which good identity as a service drives revenue are listed below:

  • Improved User Onboarding: Accelerates the onboarding process, enabling customers to quickly access services and products, contributing to higher customer satisfaction and loyalty.
  • Reduced Friction: Optimizes identity verification processes for smoother and more trustworthy online transactions, reducing abandonment rates and increasing conversions.
  • Superior Customer Experience: Reduces friction and delivers a more secure user experience, encouraging repeat business.
  • Fraud and Chargeback Mitigation: Reduces the risk of fraudulent activities and chargebacks, safeguarding revenue streams.
  • Personalization: Helps collect and analyze customer data to facilitate personalized services and targeted marketing efforts, leading to increased sales.
  • Compliance and Trust: Helps adhere to data protection regulations to build customer trust and demonstrate a commitment to privacy and security, fostering long-term customer relationships and positively impacting revenue.
  • Cross-Selling and Up-Selling: Provides customer insights to facilitate targeted cross-selling and up-selling of additional products and services.
  • Expansion and Market Reach: Facilitates secure and compliant expansion into new markets, contributing to revenue growth.
  • Operational Efficiency: Streamlines identity management processes for improved operational efficiency, reduced costs associated with manual onboarding, support, and maintenance, thereby impacting the bottom line, positively.


With cloud-based solutions, identity-as-a-service providers enable businesses to enhance security, simplify identity and access management, and automatically scale identity and access management according to the changing requirements. To address the evolving business needs, digital identity verification solutions may embrace features such as decentralized models, advanced authentication methods, and AI integration, in future.

That said, challenges such as security vulnerabilities, integration complexities, and customization limitations present obstruction to its deployment. Therefore, businesses must craft appropriate risk mitigation strategies that help maximize the benefits of identity as a service, deliver user-centric experiences, and drive revenue generation, while ensuring regulatory compliance.

A leading fintech savesaround us$ 4M with Caf's automated id document verification solution

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"What is Identity as a Service ?"