When Digital Identities Fail: The Consequences of IAM Outages

It has happened to almost everyone who works or engages in business online: you go to log in to a website or critical resource, and you suddenly find that your login attempt fails. Something has happened to the system and prevented thousands of employees and customers from using their digital identities. These types of outages are a dangerous new threat to business operations and reputations, with often-devastating consequences.

Let’s learn more about IAM outages and how you can mitigate the damage to your business.

IAM Outages: What Are They and How Do They Happen?

All over the world, companies, corporate entities, and even governments are preparing for a new era of cybersecurity by using identity and access management (IAM) tools such as biometric verification and multi-factor authentication. However, even though IAM is rapidly becoming more sophisticated, vulnerabilities continue to plague identity systems as criminals recognise the linchpin nature of IAM environments to major businesses.

One of the most pressing dangers in modern identity and access management is the possibility of a system outage involving the unexpected failure or loss of functionality of IAM systems. An IAM outage prevents a company’s employees, customers, and partners from accessing critical systems via their verified digital credentials. This naturally prevents employees’ ability to work or customers’ ability to make transactions.

IAM outages can happen for a variety of reasons. One of the most common, and dangerous, is a cyberattack, in which malicious actors attempt to breach or disable identity services to disrupt business or mine sensitive data. However, IAM outages can also be caused by negligent administration or updating of IAM services, and various forms of human error.

What Happens When IAM Outages Occur?

Businesses that experience disruptions of IAM services can expect the following, depending on the length and severity of the outage:

Productivity Loss

IAM outages often cause a decrease in employee productivity. When employees are incapable of accessing work-related systems or resources due to an outage, they cannot effectively do their jobs. The longer a period of identity downtime lasts, the larger the backlog of work becomes, and even once the outage is fixed, productivity may remain slower due to the overwhelming amount of catch-up work that needs to be done. This can cause major disruptions across various departments, including manufacturing, sales, content creation, marketing, and more.

Revenue Losses

Loss of productivity and operations disruption work together during an outage to lead to revenue loss. The financial consequences of an outage can be massive, with some experts suggesting that IAM outages can cost major companies anywhere from $300,000 to $1 million per hour of downtime. For smaller businesses, equivalent costs can be catastrophic or even deadly to the entire company. Revenue losses do not only come from reduced productivity, as well—they can also come from frustrated customers, who may abandon business with a company altogether due to annoyances with outages and even fears of fraud resulting from improper identity verification.

Legal and Remediation Costs

A final major consequence of IAM outages is the possibility of legal and remediation expenses. Companies that experience an outage as a result of a cyberattack may be subject to lawsuits by customers, employees, or even the government resulting from the potential exposure of personal data, which may involve violations of prominent regulations like GDPR and HIPAA. Furthermore, companies often have to pay more money for IT support in order to fix the problems causing an IAM outage. All of this adds to the expense of downtime and can cause a crucial decline in a business’ reputation for security and safety.

What Can You Do to Mitigate the Damage of IAM Outages?

IAM outages are frightening, but there are ways you can minimise the damage affecting your business. Here are a few tips to get you started:

Protect Your IAM

The heart of strong identity security is investment in IAM, or identity and access management. Many companies make use of various third-party IAM services to secure their employee and customer identities, including popular cloud-based services such as Microsoft Entra ID and Okta. However, few companies that employ these critical IAM systems have tools in place to protect their resilience. Investing in IAM resilience platforms specifically built to help with backup and recovery practices or failover solutions in the event of a disaster can be the difference between a brief disruption and a devastating, extended outage.

Promote Best Practices in Identity Management

While IAM can take much of the burden of security off administrators and business owners, it cannot replace core best practices. When it comes to identity management, business owners and IT admins need to be vigilant and consistently monitor their IAM for issues and potential threats. That includes frequent security audits, keeping up with updates, and refusing to permit negligence or lapses in identity security. Businesses should also update their identity security playbook to account for new threats posed by AI, investing in multi-factor authentication (MFA), privileged access, and other security measures.

Final Thoughts

IAM outages are a threat to any business, but there are things you can do to stop them. By keeping track of your IAM and investing in powerful tools like MightyID, and utilising best-practice processes, you can minimise the damage of outages and keep your users safe. Invest in your IAM system and start yourself on the path to securing your business.