Customer Identity & Access Management Market Overview: Key Stats & Trends For 2025

Customer Identity and Access Management (CIAM) refers to the set of technologies and practices used by organizations to manage and secure how external users access digital services. These external users can include customers, partners, or subscribers. 

Unlike traditional Identity and Access Management (IAM), which focuses on internal users, CIAM solutions deliver secure, seamless, and personalized experiences for external users at scale. To provide a secure, seamless, and personalized user experience, while still maintaining compliance with data privacy regulations, CIAM brings together:

• User authentication
• Single sign-on
• Consent management
• Profile management 

We have assessed several reports to identify the most valuable insights and statistics relating to CIAM. This article will delve into the current CIAM market, benefits, trends, and predictions.

General Market Statistics

The CIAM market is experiencing significant growth, driven by rising cyber threats, regulatory pressures, and the demand for enhanced customer experiences. In 2025, the global CIAM market is valued at approximately $21.5 billion USD, with projections estimating it will reach $57.2 billion by 2033, reflecting a compound annual growth rate (CAGR) of 13%. This robust growth underscores CIAM’s pivotal role in enabling secure and scalable identity management for external users.

Market Drivers

Several factors are fueling the CIAM market’s expansion:

• Increases in Cyberattacks: The growing frequency and sophistication of identity-related attacks, such as credential stuffing and phishing, are driving demand for CIAM solutions with advanced security features.
• Stricter Regulatory Compliance: Regulations like GDPR, CCPA, and AML/KYC mandates require organizations to implement robust identity verification and data protection measures, boosting CIAM adoption.
• Demand for Improved Customer Experience: Consumers expect seamless, frictionless interactions, such as SSO and personalized profiles, which CIAM solutions deliver without compromising security.
• AI Integration: The incorporation of artificial intelligence (AI) into CIAM platforms enables advanced functionalities, such as behavioral biometrics, fraud detection, and adaptive authentication.

Deployment Models

In 2025, the on-premises segment dominates the CIAM market, capturing a 62% market share. This preference reflects the need for control and customization in highly regulated industries and organizations with complex IT environments. However, cloud-based CIAM solutions are gaining traction due to their scalability, cost-efficiency, and alignment with digital transformation initiatives, particularly among SMEs and cloud-native businesses.

Industry Segmentation

The Banking, Financial Services, and Insurance (BFSI) sector holds the largest market share, driven by its stringent regulatory requirements (e.g., AML, KYC, PSD2) and the need to secure high-value customer data. The healthcare sector is projected to experience the highest growth rate, fueled by the digitization of patient portals, telemedicine adoption, and compliance with regulations like HIPAA. Other industries, such as retail and media, are also significant adopters, leveraging CIAM to enhance customer engagement and protect e-commerce platforms.

State of CIAM

The KuppingerCole Leadership Compass report for CIAM provides valuable insights into the evolving CIAM market, highlighting key trends and capabilities:

• Identity Verification (IDV): 65% of CIAM solutions now offer IDV connectors, enabling integration with third-party identity verification services. This trend reflects the growing need for robust customer onboarding and compliance with KYC/AML regulations.
• Fraud Prevention: CIAM platforms are increasingly incorporating fraud prevention functions or connectors to Fraud Reduction Intelligence Platforms (FRIP), enhancing their ability to detect and mitigate identity fraud in real-time.
• Identity Governance and Administration (IGA): Customers are demanding IGA and identity lifecycle management capabilities within CIAM systems, allowing organizations to manage user identities throughout their lifecycle, from registration to deactivation.
• Passkey Adoption: The use of FIDO-based passkeys is gaining traction due to their security and convenience, offering a passwordless authentication alternative that reduces friction and enhances user experience.

Identity Security Threat Landscape

The CyberArk Identity Security Threat Landscape 2024 Report provides critical insights into the impact of cyberattacks on identity security, based on a global survey:

• Post-Breach Investments: When asked which identity-related technologies organizations invested in after a breach, 22% of respondents cited CIAM, reflecting its role in strengthening customer-facing security post-incident.
• Vulnerable IAM Infrastructure: 21% of respondents identified vulnerable IAM infrastructure as one of the top two factors likely to cause an identity-related attack, just behind digital transformation initiatives (22%). This highlights the need for CIAM solutions that address vulnerabilities in customer identity systems.

Reasons to Consider CIAM

CIAM offers compelling benefits for organizations seeking to secure customer identities while delivering exceptional user experiences. Key reasons for adoption include:

• Regulatory Fines: In the first half of 2024, global financial regulators issued approximately 80 fines totaling $263.3 million for breaches of AML, KYC, and other regulations. CIAM solutions with robust IDV and consent management capabilities help organizations avoid such penalties.
• Customer Onboarding Challenges: 86% of financial institutions cited poor data management and siloed processes as key reasons for client abandonment during onboarding, with 77% pointing to poor customer experience and delayed onboarding. CIAM streamlines onboarding with SSO, profile management, and automated verification, reducing abandonment rates.
• Identity Fraud Losses: A 2025 study from Javelin found that US-based consumers lost $27.2 billion in 2024 due to identity fraud, a 19% increase from the previous year. CIAM’s fraud prevention and authentication features help mitigate these risks.
• Password Fatigue: A Ping Identity survey of over 8,000 customers revealed that 89% have complaints about managing passwords, and 97% are concerned about personal data exposure online. CIAM solutions with passwordless authentication and data protection features address these concerns.
• AI-Related Security Concerns: 89% of organizations expressed concerns about the impact of AI on their identity security, highlighting the need for CIAM platforms with AI-driven security measures, such as behavioral analysis and anomaly detection.

Trends in Passwordless Authentication

Passwordless authentication is a key trend in CIAM, driven by consumer demand for convenience and security. Key statistics and insights include:

• Authentication Methods: In a 2024 survey of 2,000 respondents, nearly 60% reported using usernames and passwords for personal account authentication, while 34% used mobile SMS-based authentication and just under 25% used password managers. These figures highlight the persistence of traditional methods but also the growing adoption of alternatives.
• Passkey Benefits: According to the FIDO Alliance, passkey authentication results in sign-ins that are up to 75% faster and 20% more successful than passwords. This efficiency enhances user experience and reduces login failures.
• Passkey Awareness: Passkey awareness has risen from 39% in 2022 to 57% in 2024, reflecting growing consumer familiarity with passwordless technologies.
• Abandonment Due to Passwords: 42% of respondents reported abandoning an online purchase at least once in the last month due to forgotten passwords, with the figure rising to 50% for those aged 25-34 compared to 17% for those over 65. Additionally, 56% of consumers gave up accessing a service online due to password issues, with an average frequency of twice a month. This rises to 66% for those under 35 versus 34% for those over 55.

Future Outlook

Looking ahead to 2025 and beyond, the CIAM market is expected to evolve in several key ways:

• Widespread Passkey Adoption: Passkeys and other passwordless authentication methods will become standard in CIAM, driven by consumer demand for convenience and security.
• AI-Driven Security: AI and machine learning will enhance CIAM capabilities, enabling real-time fraud detection, adaptive authentication, and personalized user experiences.
• Cloud-Native CIAM: The shift to cloud-based CIAM will accelerate, offering scalability and flexibility for organizations embracing digital transformation.
• Regulatory Compliance: Increasing global regulations (e.g., GDPR, CCPA, DORA) will drive CIAM adoption, particularly in BFSI and healthcare, as organizations prioritize data protection and compliance.
• SME Accessibility: Affordable, cloud-based CIAM solutions will democratize access, enabling SMEs to implement robust identity management without significant upfront costs.
• Integration with Ecosystems: CIAM platforms will integrate more seamlessly with customer relationship management (CRM), marketing, and analytics systems, enhancing personalization and operational efficiency.

Learn More About CIAM

For organizations seeking to explore CIAM further, Expert Insights offers valuable resources:

• The Top Customer Identity and Access Management (CIAM) Solutions
• Customer Identity and Access Management (CIAM) Buyers’ Guide