Enterprise digital identity is at the heart of organizational security. Staff, contractors, suppliers, freelancers, and temporary workers need secure ways to access the applications, files, and data they use for work. To ensure this access is appropriate and secure, an organization uses specialized solutions and policies. Identity and access management (IAM) and privileged access management (PAM) are two solutions to manage, maintain, and secure organizational identities.

What is IAM?

Identity and access management (IAM) is a set of policies, processes, and technologies to manage user access to apps, data, devices, and other IT resources. Modern IAM systems are designed to cover many use cases, including workplace, consumer, and citizen identity and access management. IAM centers on two core concepts:

Authentication

When accessing a resource, a user must be able to prove they have the right to access it. Typical methods of providing such proof — i.e., authentication — include passwords, authenticator codes, and biometrics. Sometimes, authentication methods are combined to create two-factor or multi-factor authentication (2FA or MFA).

Authorization

Authorization enforces access privileges, once a user is successfully authenticated. It may depend on the user’s identity attributes, such as their role within the organization (like HR or system administrator, for example).

What is PAM?

Privileged access management (PAM) is based on processes and tools that control and govern privileged users' access to sensitive IT resources. PAM is used to enforce the principle of least privilege (PoLP), a concept used to ensure that users have access only on a need-to-know basis. Privileged users typically have access to sensitive areas of a network, such as databases, development platforms, and finance systems. As such, PAM policies typically reflect a user's role in an organization. For example, a marketing manager would likely have a different level of access privilege than someone in HR. Using a PAM solution balances employee usability with data security.

Why are IAM and PAM important for organizational security?

Research from IBM X-Force shows that 71% of data breaches involve stolen login credentials. The increased use of fragmented identities across disparate SaaS apps and hybrid cloud networks has created a broad attack surface. Cybercriminals use techniques like phishing to steal identity credentials to access your IT network. Once inside a network, attackers can cause severe harm, including data theft and ransomware attacks. But external attackers aren’t the only security risks. Insider threats, too — both malicious and accidental — are often identity-centric.

IAM ensures that sensitive data and resource access are managed, with the assignment of appropriate authentication and authorization.. PAM ensures that the permissions of privileged users align with least privilege access controls. The combination of access management and the assignment of appropriate and least privileges improves the security posture of an organization.

Key differences between IAM and PAM

IAM and PAM are used together, but the scope of IAM is broader. Where IAM applies to an organization's general (non-privileged) user base, PAM focuses on privileged users, like system admins. IAM ensures that your users, including remote workers, have access to the right IT resources when needed. IAM also enforces appropriate authentication methods, like 2FA.

PAM identifies privileged accounts, assigns least privilege permissions, and monitors and audits them. Privileged users typically have elevated access rights. For example, an administrator may have full admin access to a database — giving them elevated rights to sensitive data, and making them prime targets for cybercriminals. PAM ensures that these users have the correct access privileges under the right conditions. PAM monitors and audits session activities to detect unusual behavior that could be a potential cyber-attack or data leak.

Core differences between IAM and PAM

Scope

IAM: Entire organization, including third-parties

PAM: Privileged users, like administrators

User model

IAM: Implements and manages user access across the company network, including remote workers. Typically integrated with directory services like active directory (AD) or lightweight directory access protocol (LDAP)

PAM: Monitors privileged access to sensitive areas of the network. Enforces the principle of least privilege access

Functionality

IAM: Identifies users attempting to access IT resources. Enforces authentication and authorization of users based on policies

PAM: Monitors and audits, in real time, privileged users’ access to sensitive apps and systems

Risk management

IAM: Prevents unauthorized access to network resources. Enforces MFA as required

PAM: Enforces principle of least privilege to prevent sensitive data exposure. Enforces just-in-time (JiT) access (limited, on an as-needed basis)

Challenges and best practices for implementing IAM and PAM solutions

IAM and PAM are rolled out in a sequential process, starting with IAM implementation. IAM can be complex to install and configure. Installation requires planning and mapping users to access levels. The plan must ensure that all employees and use cases are covered.

Integrating an IAM system with an existing infrastructure can add complexity to the installation. If you are running a legacy system, like an older database, you may have to perform customizations for integration.

Once your IAM is deployed, it’s time to configure and deploy PAM. The PAM layer of your identity management suite provides a more granular level of control over privileged users. Greater restrictions on permissions may cause employees to resist, so any privilege changes must be acknowledged and communicated.

When deploying an IAM and PAM solution, balancing usability and security is always a challenge. While overly restrictive permissions may be more secure, they can also prevent someone from doing their job. So it’s important to strike the right balance. Single-sign-on (SSO), handled by an IAM system, can help alleviate the burden of security on the user — by maintaining login across multiple apps during a session.

Often, the hardest challenge for IAM and SSO is the dependency on your SaaS vendors. It’s not a given that a SaaS vendor will provide SSO capabilities by default. The lack of built-in support for SSO is known as an "SSO tax.” This is when SaaS vendors charge more for access to SSO features. Sign-in with Google is often the best alternative, as it's available in most plans.

Hybrid working has brought new challenges to identity and access management. However, IAM and PAM can be used separately or together to secure hybrid worker access. For example, IAM can be used to enforce the use of MFA by remote workers.. PAM can be used to reduce permissions for certain workers under certain hybrid working conditions. Its real-time monitoring provides a mechanism to modify permissions if work conditions change.

How can organizations use both IAM and PAM effectively?

A unified identity platform is recommended to cover all identity use cases. Some modern identity governance and administration (IGA) solutions, like AccessOwl, provide functionality that simplifies, enhances, and consolidates many of the functions in IAM and PAM. A modern IGA service addresses some of the gaps in capability or more complex actions needed to make IAM and PAM effective. . For example, IGA simplifies the provisioning and deprovisioning of users. Modern IGA solutions also extend visibility into shadow IT apps,  ensuring secure access across the entire IT resource environment.

The automation provided by modern IGA is another core part of effective identity management. IGA automates access request approval processes, creating a workflow that accommodates multiple decision-makers and users. This streamlined workflow improves the user experience and maintains a robust security vs. usability balance.

Compliance with regulatory requirements related to IAM and PAM

Identity management is now a recognized core principle of cybersecurity. A robust approach to identity management follows the principles of least privilege, which is a central requirement of many regulations and standards, including SOC 2, ISO 27001, NIST CSF, HIPAA, HITRUST, PCI-DSS, and SOX controls. 

Emerging trends in IAM and PAM

Trends in identity management for non-privileged and privileged users include the following: 

Biometrics: Authentication is a thorny subject, as it’s the user-facing part of identity management. However, with advances in biometric authentication — such as facial biometrics, anti-deep fake technology, and liveness testing — it’s making inroads in the workplace.

Modern IGA: The modernization and automation of access decisions have created new-era IGA systems. These centralized services handle the provisioning and deprovisioning of moving and departing employees, seamlessly managing privileges. New-era IGA also provides deep visibility across the entire company environment, including remote workers and shadow IT apps.

Passkeys: The FIDO Alliance has developed a mechanism, based on public key cryptography, that replaces passwords. Passkeys are based on the WebAuthn standard. They offer a passwordless way to login to an app or website, mitigating the risk of phishing. The passkey is associated with a user account. When a user attempts to authenticate to access a service, a browser or operating system will handle the request, choosing the right passkey. Typically, a biometric — like a fingerprint — or a PIN is used to open a mobile device to authenticate the request.

Unification of identity management: The convergence of PAM, IAM, and IGA is providing a more unified experience of deployment, integration, and maintenance. User management for both non-privileged and privileged users is streamlined. Visibility is improved, and compliance is simplified.