The Banking, Financial Services, Insurance (BFSI) sector is one of the most highly regulated in the world, and yet the temptation is always there to put profits above security. But what if security boosted profits?
We are seeing a mindset shift among buyers regarding counting the cost of Customer Identity and Access Management (CIAM). According to the Thales 2025 BFSI Insights Survey, Identity and Access in Banking, Financial Services, and Insurance: The Change Imperative, 42% of all survey respondents now view CIAM as a profit center rather than a source of monetary loss.
This underscores a growing trend of factoring identity security into the bottom line. While phishing and stolen credentials remain the most prominent attack vectors, companies are becoming aware that identity-based threats can introduce significant financial loss.
It also acknowledges the need to cater to the customer journey and create a custom CIAM process. This process should help customers arrive at their resources safely, with plenty of goodwill left for the company involved.
When a company is in the BFSI sector, moving customers safely and profitably through internal processes is more than a perk, it’s a business imperative.
Today’s Customers Value Data Privacy
The average customer profile is different today than what it was ten or fifteen years ago. Then, the public was aware of digital and internet-based dangers but arguably not overconcerned. Cyber awareness levels were relatively low, and the onus for protecting sensitive information was largely on lawmakers and corporations.
Now, consumers have taken data privacy matters into their own hands, calling for increased regulation – and it has come. While this only makes lawmakers and corporations even more accountable for data privacy, it also underscores the fact that the public has become its own data privacy watchdog.
Another industry research on consumer digital trust points out that 86% of customers expect some level of data privacy rights from the companies they interact with online if they are to entrust their personal and sensitive data. This is an indication that people have become more savvy about their digital (and human) rights; last year, the number of consumers who accessed their right of Data Subject Access Requests (DSAR) increased to 36% (up from 24% in 2022). This is a level of cyber awareness and security concern unique to today’s buyers and one that factors heavily into their buying choices.
They Also Want Seamless Speed and Service
Yet, convenience is always part of the consumer conversation. Gartner notes that “a pleasant online experience can increase customer satisfaction and conversions,” and it seems customers would agree.
More than one in ten American consumers cite “lack of speed” as a common cause of frustration with companies’ processes, and as many as 80% of consumers overall are willing to pay more to get a better UX.
Today’s buyers understand the value of their data and their position in the marketplace. They feel, and rightfully so, that they have the upper hand when it comes to digital options and that they can expect not only secure but seamless user experiences from the companies they do business with.
These two – security and UX – are combined in Customer Identity and Access Management.
CIAM Boosts Acquisition, Retention, and Profits
According to the Thales report, 42% of organizations today view Customer Identity and Access Management as a profit center, with a landslide 86% connecting it to greater customer acquisition and 84% tying it to increased customer retention. The fact that so many participants see CIAM as an investment that delivers a value greater than its cost underscores the importance of getting it right, especially in highly competitive sectors like BFSI.
When done right, a CIAM solution shows BFSI customers, in particular, that the institution they trust to handle their money also values their security. It shows them that your institution values their time. And it makes the secure sign-on process a relatively uneventful experience, so participants can save their mental resources for engaging with financial decisions – not resetting another password.
Making CIAM a Competitive Component
Customer identities are projected to soar by over 73% in the coming year, according to the Thales report, so there has never been a better time to “get it right.”
What lowers the value of CIAM in organizations’ eyes? Although 90% perceive the solution as “critical,” nearly a third (32%) label it a cost center, seeing it as a drain on resources. This could be the result of inefficiencies in current IAM technologies, outdated access management processes, or underutilized capabilities. For these customers, boosting current output with automation and aligning CIAM with business goals could be the key to bringing this tool out of the red.
Additionally, 25% stated it was cost-neutral, revealing the opportunity for more modernized CIAM solutions that have current use cases and customer needs in mind. For example, CIAM solutions that employ Risk-Based Authentication (RBA) only add additional layers of security when needed. That way, if a customer wanted to access a banking app, they could do so on a single login screen unless there was something unusual about their sign-in. These signs of fraud – a different location, device, or time of day – would trigger additional defenses like MFA or biometrics.
Three out of four (75%) surveyed stated that legacy identity technology was impeding innovation, and 70% reported struggling to reduce CIAM complexity. To turn CIAM from a consumer liability to a consumer profit tool, companies need to realize what BFSI consumers value and give them the journey – and security – they want.
The Key to CIAM? Think Like a BFSI Consumer
According to FICO research, 88% of customers consider UX just as important as product offerings in the banking sector. This might be because account fatigue has already set in; in the UK, adults have an average of 21 logins dedicated to financial and insurance services. The message is clear; they can do business anywhere, but which organization will prioritize the seamless user experience they prioritize? Asking “who will do it securely” is already a given.
As financial firms move away from seeing cybersecurity as solely for defense, they can become more attuned to its other, more business-centric benefits. Getting CIAM right means investing in a solution that delivers modern and secure digital experiences, unburdens BFSI customers, and drives growth.
