Why CIAM is Costing Companies $3.92 Million on Average


Customer identity and access management lets your company manage and capture customer ID and profile data. It lets you control how your customers access applications and services.

A good CIAM solution will offer a variety of features, including:

  • Self-service account management
  • Preface and consent management
  • Single sign-on
  • Multifactor authentication
  • Access management
  • Data access governance
  • Directory services

An exceptional CIAM solution will do all the above while offering your customers a seamless experience. It is versatile and can be used with all communication channels your customers use to engage with your brand. It is scalable and performs successfully at scale. You want your CIAM solution to make accessing digital applications a seamless yet secure experience for your customers.

In 2021, companies are expected to invest tens of billions of dollars to implement CIAM. Why are businesses devoting so much money to this technology? That is the $3.92 million question.

Why Is CIAM Costing Businesses $3.92 million?

If the number $3.92 million is not familiar to you, it should be. This is how much it is estimated that companies spent in 2019 to cover a data breach. This is a 1.5 percent increase from 2018.

According to Fundera, a small business that has no employees has an average revenue of $46,978. The average small business owner makes around $71,000 a year. The vast majority of small business owners make less than $100,000 a year in income. This means that for most small businesses, the $3.92 million needed to recover from a data breach is unattainable.

For all businesses, be them large enterprises or one-man operations, that deal with customer data, understanding why data breaches happen is key to truly appreciating the value of CIAM. Verizon did its 2020 Data Breach Investigation Report. This report revealed that there are six common ways that organizations become victims of data breaches. Here’s the breakdown.

  • Four percent of data breaches are from physical interactions. This is where someone steals a laptop, paperwork, a phone, or a device to get access to information. This would also include card skimming.
  • Eight percent of data breaches come from unauthorized use. This is where a staff member uses data inappropriately. This has to do more with privilege abuse. Employees may maliciously or innocently mishandle data.
  • 17 percent of data breaches are caused by malware. This includes key loggers, RAM scraping, and malware that attacks point-of-sale systems.
  • 22 percent of data breaches are caused by social engineering. This includes phishing scams and financial pretexting.
  • 22 percent of data breaches are caused by human error. This isn’t necessarily malicious. It could simply be sending an email to the wrong person or attaching a file to the wrong email. The biggest cause of human error was leaving a database containing sensitive information online without proper security.
  • 45 percent of data breaches were caused by criminal hacking. This included using stolen credentials. Criminal hacking doesn’t require tech knowledge. Once a criminal has a computer’s login credentials, they can do several nefarious things with the information they extract.

Regardless of if your business is in the four percent with breaches from a physical interaction or the 45 percent with attacks by a criminal, the cost of repairing the damage caused by a data breach is still on average the same $3.92 million.

CIAM solutions offer centralized identity management. It guarantees that your customer’s data stays secure while creating a cohesive customer experience across all of your communication channels.

CIAM serves as a virtual gate. It keeps customer data safe while making it easy for customers to access websites. CIAM solutions offer the best of authorization, authentication, user preference, login experiences, and user data for all of your applications and services.

Why is CIAM costing businesses $3.92 million? Because they don’t have it. Organizations that interact with customer data online, that are not using CIAM, are setting themselves up to be a victim. And the cost for many businesses is a lot more than they bargained for.

The Features of CIAM That Make It So Powerful

As 2021 begins, businesses are starting their third full year of GDPR enforcement coupled with the California Consumer Privacy Act. There is a wholesome fear within the business community of finding themselves on the wrong side of these regulations. The fines alone can be enough to break a small organization financially.

Cybercriminals are also in their third year of operating in the shadow of these regulations. They have doubled their efforts and made use of state-of-the-art technologies to seriously compromise the security of their victims.

CIAM allows your organization to give customers two things they want when they interact with you. Namely, a stellar user experience and protection from breaches, fraud, and privacy violations.

1. Security

CIAM can give your organization powerful security features that extend authentication to the data layer. This minimizes your risk of a breach and the subsequent loss of customer trust, reputation, and revenue.

2. Unified Profiles

By providing unified profiles, CIAM gives your customers the same protection and ease of access regardless of the device or service used to engage with your brand. Customers have the same protection if they are using a mobile device, partner application, or the Internet of things.

3. Enforce Compliance

You can show your commitment to security to your customers with CIAM. Your customers can control who sees their data and how their data is used. You build trust by proving that you are a good steward of your customer’s data. With CIAM, you can enforce compliance with privacy regulations, like GDPR.

4. Performance and Scalability

As the amount of data you collect about your customers increases, CIAM offers consistent performance and scalability. You can address challenges connected to customer identity while delivering frictionless access to customer-facing apps and services. CIAM works seamlessly even during peak usage times. It grows with you as your customer base grows.


CIAM will require a financial investment on your part. The return on your investment will be seen as your customers trust you more and find greater joy in interacting with your brand.
CIAM can help you gain and keep customers. It makes the registration process frictionless. CIAM sets the stage for increased interaction, loyalty, and spending thanks to strong authentication. It gives you the peace of mind that comes from knowing that privacy regulations, like GDPR and CCPA, are being followed.

At every stage of the customer journey, you know that their data is being protected. Their credit card information, personally identifiable information, and usernames are kept safe. CIAM gives you the competitive edge and protection that your competition lacks if they are not using this valuable technology.