According to Delinea’s 2025 report, 78% of organizations plan to increase their Identity and Access Management (IAM) budgets in 2025. Identity security is no longer a secondary concern in cybersecurity strategies—it has become their backbone. In a hyper-connected world, where hybrid and multi-cloud environments are the norm, human, machine, and now AI agent identities represent the primary attack surface. Hackers no longer break down walls—they simply walk through the front door.

The truth is, the days of securing only the network perimeter are over. Identity is the new perimeter. With the rise of cloud computing, open APIs, and hybrid workforces, what matters is no longer where a connection originates, but who is accessing what. Identity has become the gravitational center of modern cybersecurity and the most exploited attack vector.

Faced with the growing inefficacy of passwords, the explosion of non-human identities, and increasingly sophisticated credential attacks, companies must radically rethink their approach.

Traditional authentication methods (OTP, SMS, email) are showing their limits. Modern techniques—phishing-resistant multi-factor authentication and machine identity protection—are now essential. Organizations are turning to hardened factors such as FIDO2 security keys, encrypted biometric recognition, and protocols like Okta FastPass or Windows Hello.

Identity Security Challenges

While traditional pillars such as IAM, Identity Governance and Administration (IGA), and Privileged Access Management (PAM) remain critical, they were not built to address today’s identity-centric threats.

One of the major challenges is identity sprawl: the proliferation and fragmentation of accounts across heterogeneous environments (multiple clouds, legacy systems, SaaS apps). Users often hold multiple accounts, and machine identities (service accounts, API keys…) are frequently overlooked.

Another dilemma is balancing security with user experience. Too much friction hinders productivity. Too little control, and risk explodes. Organizations need sophisticated tools and well-defined policies to strike the right balance.

Identity security tools often operate in silos and are not designed to handle today’s scale of identity proliferation:

• IAM verifies login events but not the appropriateness of access rights.

• IGA conducts periodic reviews but lacks real-time detection of privilege escalation.

• PAM protects privileged human credentials but often ignores non-human identities (APIs, cloud workloads).

The hybrid explosion—on-prem, multi-cloud, SaaS—amplifies these weaknesses. Attackers exploit dormant accounts, excessive privileges, and misconfigurations to move laterally undetected.

Identity Security Trends for 2025

Identity security is undergoing a major shift. Legacy models such as static authentication, reliance on a single identity provider (IdP), or perimeter-based defenses no longer hold against today’s complexity and threats.

Multi-IdP strategies are becoming the norm

Organizations are moving away from relying on a single IdP. They now combine Azure AD, Okta, Google Workspace, and others to distribute risk and meet diverse needs. This approach improves flexibility and security, especially in post-merger environments where multiple identity systems must coexist. Without proper orchestration, these hybrid configurations become critical weak points.

Backup IdPs are no longer optional. Companies must test failover mechanisms regularly to ensure uninterrupted access in case of outage or compromise.

CAEP is on the rise

The Continuous Access Evaluation Protocol (CAEP) dynamically adjusts access permissions based on real-time risk. A user logging in from an unusual location or an untrusted device may be immediately restricted, without waiting for a new session. CAEP enables dynamic access control, aligned with Zero Trust strategies. Google and Microsoft actively support its adoption via the OpenID Foundation.

Identity Fabric is becoming essential

In a distributed ecosystem, Identity Fabric federates multiple identity sources under unified security policies. This enables centralized access monitoring, drift detection, and faster incident response—key pillars of resilience in complex environments.

The Rise of ITDR

Coined by Gartner in 2022, Identity Threat Detection and Response (ITDR) applies EDR principles to identities. These tools detect and respond to identity-based attacks such as credential stuffing or MFA fatigue in real time.

As SaaS environments grow, ITDR is gaining traction. These solutions correlate suspicious activity (lateral movement, privilege escalation, anomalous machine identity use) around the targeted identity and assign dynamic risk scores to guide incident response.

The Emergence of IASM

Identity Attack Surface Management (IASM) adapts traditional ASM (focused on networks and endpoints) to identity. IASM continuously maps and analyzes identities, highlighting access risks and potential attack paths.

By integrating with IAM, IGA, and PAM, IASM bridges the visibility gap left by legacy tools.