IAM vs PAM – Understanding the Key Differences Between Identity and Access Management (IAM) and Privileged Access Management (PAM)

90% of organizations have reported an identity-related incident within the last 12 months, a 6% increase from last year.  IDSA 2023 Trends in Security and Identity Report

The significance of identity in today’s cybersecurity landscape cannot be overstated. Just as personal documents like passports or driver's licenses establish our identity in society, digital systems rely on unique identifiers to distinguish one user from another. 

These identifiers—whether a name, a set of permissions, or a digital fingerprint—create a profile that defines who a user is and what they are allowed to do within a system.

With over 7.7 billion people on Earth, imagine the chaos if everyone had the same identity—both in the physical world and within digital systems. Picture a scenario where Bob, who works in Human Resources, has the same access privileges as Alice, who needs to access the company’s customer database daily. 

Without distinct identities and access controls, how could you determine if Bob’s access is appropriate or secure?

This lack of differentiation can lead to unauthorized access and security breaches, making it nearly impossible to ensure that only the right people have the right access at the right time. 

To prevent such vulnerabilities, each user must have a unique identity within the system, paired with controls that govern what they can and cannot do. This is where Identity and Access Management (IAM) and Privileged Access Management (PAM) come into play—two critical components in keeping digital environments safe from these threats.

Keep reading to learn the key differences between IAM and PAM and why your company needs both for comprehensive security management.

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What is Identity and Access Management (IAM)?

As organizations scale and adopt new technologies, managing who can access what becomes increasingly complex. Identity and Access Management (IAM) addresses this challenge by providing a comprehensive system to manage digital identities and control user access. 

With IAM, organizations can assign, monitor, and adjust access rights as needed, ensuring that each user has the appropriate level of access while protecting against unauthorized entry.

IAM systems allow organizations to manage and control who has access to devices, applications, networks, and data. 

These users can be customers, employees, contractors, or even applications themselves. Regardless of the type of user, the core principle of IAM is that each must have a unique digital identity that is carefully maintained and monitored throughout its lifecycle—from creation to deactivation.

A digital identity typically includes a username, password, and associated access permissions. IAM systems are designed to handle these identities securely, ensuring that access rights are granted or revoked based on the user’s role, behavior, and the needs of the organization.

As IT environments become more intricate, the necessity of IAM in cybersecurity is increasingly evident. As cloud adoption, Bring Your Own Device (BYOD) policies, and the Internet of Things (IoT) increase, managing identities across various platforms becomes increasingly challenging. 

In fact, 74% of security leaders have reported that their identity environments have become more complex over the past two years, primarily due to these evolving technologies.

One of IAM's most common deployment models is Identity as a Service (IDaaS), where a third-party provider manages the authentication infrastructure. This approach allows organizations to leverage advanced IAM capabilities without the need to build and maintain these systems internally.

Regardless of the deployment model, every IAM system includes these key features:

• Account Management: Activating and deactivating accounts as needed
• User Information Storage: Securely storing user details in databases
• Access Control: Granting and revoking access rights based on role, behavior, or other factors

The consequences of not having an effective IAM system can be severe. Identity-related breaches are becoming more common, with 79% of organizations reporting an increase in identity attacks in the past year (CyberEdge Group 2023 Cyberthreat Defense Report).

Moreover, the cost of a data breach involving compromised credentials averages $4.5 million (IBM's 2023 Cost of a Data Breach Report), making IAM an essential component of any cybersecurity strategy.

Keep reading: Explore how Cloud IAM works, why it’s important, and how it helps cybersecurity teams

What is Privileged Access Management (PAM)?

While Identity and Access Management (IAM) governs access for all users within an organization, Privileged Access Management (PAM) focuses on securing accounts with the most sensitive and powerful access rights. 

These privileged accounts, often held by administrators and IT staff, require elevated permissions to perform critical tasks, such as configuring systems, managing security settings, or accessing sensitive data.

PAM is designed to enforce strict controls over who can access privileged accounts, what they can do with those accounts, and how their actions are monitored. 

Given that 74% of breaches involve access to a privileged account (Forrester), implementing PAM is crucial for reducing the risks associated with these high-level permissions.

A PAM system typically includes several key components:

• Credential Management: Secures and manages the passwords and keys associated with privileged accounts, often using a secure vault that limits access to authorized users
• Session Management: Monitors and records privileged sessions to track actions taken during those sessions, providing visibility and auditability for compliance purposes
• Access Control: Enforces the principle of least privilege by ensuring users only have the access they need to perform their jobs, and nothing more
• Monitoring and Alerts: Continuously monitors privileged access activities, generating alerts for any suspicious or unauthorized behavior

The value of PAM becomes evident given the substantial risks tied to privileged access. A single compromised privileged account can lead to severe consequences, such as unauthorized data access, system disruptions, or full-scale breaches. 

In fact, organizations that experience a breach involving privileged accounts can face an average cost of $5.03 million, according to the 2023 Ponemon Institute’s Cost of a Privileged Access Breach report.

As organizations adopt cloud services, the need for robust PAM becomes even more important. Cloud environments often involve complex, dynamic infrastructures where privileged access can be easily overlooked or mismanaged. 

Effective PAM solutions ensure that privileged access is tightly controlled, regardless of where the resources reside.

PAM is an essential component of any comprehensive cybersecurity strategy. By securing privileged accounts, organizations can significantly reduce the risk of a breach and protect their most critical assets from insider threats, external attacks, and human error.

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What is the Difference Between IAM and PAM?

At a high level, Identity and Access Management (IAM) and Privileged Access Management (PAM) both focus on managing access to organizational resources, but they serve different purposes and address different needs.

IAM systems are designed to manage digital identities, ensuring that individuals have appropriate access to resources based on their roles. They handle routine access control, allowing administrators to grant or revoke access as needed. 

In contrast, PAM solutions focus specifically on securing and managing privileged accounts with elevated permissions that can access critical systems and sensitive data.

The primary distinction lies in their scope and functionality:

• Identity and Access Management (IAM) systems manage digital identities and access rights for everyday users, handling routine permissions and ensuring that access to resources aligns with each user’s role and responsibilities within the organization.
• Privileged Access Management (PAM) systems go a step further by managing, securing, and monitoring privileged credentials. They protect critical data and systems from misuse by privileged users. 

PAM includes features that IAM does not, such as:

• Password Vaulting: Securely managing and protecting critical credentials through advanced session monitoring.
• Usage Limiting: Controlling account usage with specific time restrictions or approval requirements.
• Auto-Discovery: Identifying privileged credentials that may exist within the system without administrative knowledge.
• Visibility: Providing detailed insights into access requests, approvals, and actions taken during privileged sessions.
• Auditing: Recording and analyzing access activities to ensure compliance and detect anomalies.

While IAM systems are essential for managing general access and enforcing policies, PAM solutions provide the additional layer of security needed for high-risk environments. PAM ensures that actions taken by privileged users are closely monitored and controlled, preventing unauthorized modifications or misuse of critical information.

PAM is an integral part of a broader IAM strategy. Both IAM and PAM systems complement each other and, when used together, enhance overall security by managing both routine and privileged access. 

IAM handles the administrative aspects of user management, while PAM focuses on safeguarding and auditing privileged access.

In summary, IAM and PAM are not mutually exclusive but are highly complementary. Implementing both provides a comprehensive approach to identity and access security, ensuring that all access points—routine or privileged—are managed effectively and securely.

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Why Your Company Needs Both IAM and PAM

IAM and PAM are designed to address different aspects of access control, and together, they provide comprehensive coverage for identity security.

To achieve this robust security, organizations should approach identity management in two distinct but complementary phases:

• The first step involves implementing Identity and Access Management (IAM), which focuses on defining and managing system identities, including creating, modifying, and deleting user accounts. 
• The second phase involves deploying Privileged Access Management (PAM), which controls and monitors the use of privileged credentials, adding an extra layer of security for high-risk accounts.

Integrating IAM and PAM is essential for maximizing their effectiveness. When used independently, these solutions may fall short in addressing all access issues. 

For example, while IAM systems manage digital identities and their associated permissions, PAM solutions improve security and compliance by specifically protecting critical data and controlling privileged access.

Furthermore, organizations that treat IAM as a comprehensive set of products rather than isolated solutions will see significant benefits. By 2026, IAM leaders who adopt this approach are projected to improve their capabilities and increase business value from IAM initiatives by 25% (Gartner). 

This integrated approach ensures that all aspects of identity and access management are addressed, from routine user permissions to the secure handling of privileged accounts.

In summary, both IAM and PAM are crucial for a secure IT environment. Implementing them together provides a complete solution that not only manages access efficiently but also ensures that high-risk privileged accounts are protected and monitored. 

This combined approach is key to achieving effective security and compliance in today's complex digital landscape.

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Conclusion

Identity and Access Management (IAM) and Privileged Access Management (PAM) each play a vital role in protecting your organization, but their true power lies in their integration. 

IAM ensures that all users have appropriate access based on their roles, while PAM adds a crucial layer of security by managing and monitoring privileged accounts with elevated permissions.

By combining IAM and PAM, you create a comprehensive security strategy that not only addresses routine access control but also safeguards your most sensitive data and systems. 

With IAM leaders projected to play increasingly strategic roles and PAM solutions critical in managing high-risk access, integrating these systems is more than just a best practice—it's a necessity for robust, adaptive security in a complex digital environment. 

Ensure your organization is prepared by implementing both IAM and PAM, and stay ahead in the fight against identity-related threats and breaches.

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Take Action Now

See how you can complement your IAM strategy and elevate your cybersecurity with our essential eBook, Privileged Access Management 101. 

Explore the significance of PAM, best practices for implementation, and how senhasegura’s leading platform enhances security. Don’t wait! Learn from real-world success stories and see how PAM can transform your cybersecurity approach.

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