Value Proposition

Enables the separation of roles between the identity provider who manages the digital identities and the service provider who provides the IT service. This setup allows identities managed in one information security domain to be recognized in another, thus allowing entities to collaborate between organizations and work across IT systems.

• Efficiency gains through streamlined identity lifecycle management - Allows collaboration between organizations by allowing the entities whose identities are managed by one organization to use IT services provided by another, thus streamlining the management of their identities throughout their lifecycle.

• Efficiency gains and enhanced user experience through single sign-on - In a federated system, identities are recognized across a wider range of IT systems which reduces the authentication burden.

• Enhanced privacy - The information related to persons whose identities are onboarded via federation may be reduced.

• Enhanced security - The management of the lifecycle of identities in another organization is difficult to manage, leading to orphan accounts and other similar issues.

Challenges

• Liabilities - Stemming from service unavailability (e.g. authentication service failure) or security incidents (e.g. unauthorized users).

• Two-sided market yielding dominant platforms - FIM is a two-sided market (IdP vs SP). This exhibits cross-side network effects and naturally leads to dominant platforms (https://open-measure.atlassian.net/wiki/spaces/BIB/pages/1542848876, p. 2).

• Network effect + competition may undermine reliability and security - If IdPs are in competition to get to the market first to benefit from network effects by attracting users, ease of use will be given higher priority than reliability or security which may bring down quality requirements (https://open-measure.atlassian.net/wiki/spaces/BIB/pages/1542848876).

• Assuring trust - Through identity proofing and authentication.

• Data privacy and data sharing - FIM actors collect valuable data related to their entities (e.g. IdP collects identity attributes and SP collects transactional data). Who collects, safeguards, and shares what data with whom constitute both a data privacy legal liability and an economic tussle (https://open-measure.atlassian.net/wiki/spaces/BIB/pages/1542848876).

• Mutual benefits - FIM brings together multiple actors (entities, IdPs, SPs, and an identity management platform). All actors need to yield benefits to have an incentive to participate in the federation ().

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