Identity Provider: What Is It And Why Should You Invest In One?

Identity management integration is an essential part of today's consumer-driven world. Identity providers allow consumers to sign in to your website or online store using one convenient login, making it easier than ever for them to access your site.

Identity Provider: What Is It And Why Should You Invest In One?

In the physical world, you’re required to show a government-issued ID to verify your identity. This might be a passport or a driving license, that verifies your name, address, and other details. However, these IDs aren't efficient on the internet. Digital Ids are what is required of end-users instead.

So, what better way to create individual IDs than onboarding an Identity Provider for your business?

What is an Identity Provider (IdP)?

An Identity Provider is a third-party company responsible for creating, maintaining and managing digital Ids for a business. The provider also provides authentication services so that only the correct user can gain access to any account or data.

For example, you may often see “Sign up with X” options on websites that link to other accounts like Instagram. In this case, the website will first connect to Instagram’s server to verify the information you provide before granting access to your account. The website, therefore, acts as an identity provider.

How do IdPs Work?

The working mechanism of an identity provider is simple. When you sign up or apply to get a digital ID, you have to provide unique information. This can be your username, password, answer to a security question, captcha, etc. Once you have provided this unique information, you will receive a digital Id that proves your identity.

Without getting the right information, you will not be issued the Id. It is also worth noting that identity providers don’t store the username and password of their users. Instead, they verify the information you type in to issue a token (also known as digital Id).

5 Business Problems an Identity Provider can Solve

Identity providers can solve various problems for your business. Here is a summary of the five most common problems.

1. Unreliability of passwords

More than 53% of internet users rely on memory to remember passwords. 51% of internet users use the same password for personal and professional accounts because they cannot remember the passwords. Also, people choose unwise ways like spreadsheets to save their passwords which can easily be hacked. IdP lowers this burden on the user.

2. Increasing efficiency

Most businesses provide accounts that can be used on multiple devices. It can be difficult for your IT department to manage all these details efficiently. With an IdP, these crucial parts are maintained by the provider instead of burdening your employees.

3. Simplifies account creation

Your businesses and their website can easily be accessed from all over the world. However, creating accounts for several thousand visitors per day is inefficient and time-consuming. An IdP simplifies the process for an end-user to use your service without creating any accounts.

4. Simplifies problem-solving

As a person in charge, you will need to solve all problems that arise. However, without knowing who caused the issue, it is impossible to solve. With an IdP, you can access who made which changes and restore the lost or changed work.

5. You can connect all accounts

Your consumer may often choose to log in using different accounts. For example, they may choose Google on the first try, then Facebook, then something else. Keeping track of all these interconnections and identities for the same person can be challenging. An IdP provides access using only one account, providing you with a clear picture of the user linked to the account.

The Security Benefits of Using an Identity Provider

Identity providers can also make a significant difference in security for your business. Different methods can be used to increase the security benefits of an identity provider:

  • Strong KYC policy: You can implement a comprehensive KYC policy to ensure the credentials of each consumer remain unique. This will ensure strong authentication that can be used to verify a user’s identity in various steps (MFA).
  • Multi-factor authentication: Presenting multi-factor authentication for all end-users and employees will increase the security of your accounts and ensure no third party can gain access. While this method takes a few extra seconds, it can easily be used to identify any hackers.
  • SSO: Many businesses choose to include a Single Sign-on (SSO) feature instead of MFA; there can be various advantages. It allows end-users to use your services without logging in again and again.

How to Integrate an Identity Provider with a CIAM Solution?

Identity providers use CIAM to connect the end-users existing accounts to the business’s services. CIAM solutions also come with features that can enhance the process of authentication. This is generally done by implementing unique authentication protocols. Two well-known authentication protocols are:

  • OpenID provider: OpenID provider is an authentication protocol that uses an ‘identifier’ like a URL to verify the user’s identity. This end-user has previously registered an OpenID which they have to enter to verify their credentials.
  • SAML identity provider: The SAML identity provider allows IdPs to transfer authentication details to your business’s server and verify the identity of the end-user. This identity provider works on SAML authentication principles.

Most servers generally accept these and can make identity verification simple for your business and the consumer.

How LoginRadius Introduces Consumer-Centric Capabilities that Drive ROI?

LoginRadius has an auto-scalable infrastructure for IdPs that can seamlessly integrate new accounts as your businesses grow. It allows your businesses to simplify the process of signing up new users and discarding new accounts without compromising on the security of your data. This will further reduce the time and money required to manage passwords and increase your ROI.

LoginRadius’ cloud-based identity provider can be used for all web, gaming consoles, and mobile applications. Cloud storage automatically increases the threshold according to your business requirements.


Choosing and integrating the right identity provider can have long-term benefits for your business. Not only does it simplify the login process for the user, but it also allows you to keep track of your consumer’s accounts, data, and passwords without hiring extra staff.

Originally published at LoginRadius

What’s an Identity Provider And Why Should You Invest In it?
Integrating an Identity Provider with your business application can simplify user authentication. Also find out how investing in an IdP increases your business security.