In an era where enterprises rely on multiple applications, third-party services, and multiple domains, managing user authentication and user access across platforms can be challenging. This is where a federated identity manager comes into play. By centralizing authentication and authorization across organizations and applications, federated identity solutions provide secure authentication, enhanced security, and seamless access to resources.
This guide explores how federated identity management (FIM) works, its key protocols like Security Assertion Markup Language (SAML) and OpenID Connect, and why businesses adopt it for strategic initiatives in security and user convenience.
What Is a Federated Identity Manager?
A federated identity manager is software or a service that enables organizations to manage federated identity solutions across multiple domains and multiple platforms. It acts as the central hub between:
Identity providers (IdPs), which authenticate users and store credentials
Service providers (SPs), which request authentication and grant access to applications and resources
The federated identity manager ensures a consistent authentication process, helping multiple organizations manage trust and provide seamless access to applications and websites.
For a practical look at IAM tools, see Identity and Access Management Guide.
Understanding Federated Identity Management
Federated identity management allows a user to use a single set of login credentials to access multiple applications, websites, and systems across different organizations.
Benefits include:
Improved user convenience (no need for multiple accounts)
Centralized and secure access
Integration with identity management systems like Active Directory
Protection of user privacy through minimal disclosure of data
Federated Identity Management FIM: The Basics
Federated identity management (FIM) is a framework of identity management systems and authentication protocols that allows a user’s identity information to be shared across federated domains.
Key components of FIM include:
Security Assertion Markup Language (SAML) – an XML-based protocol for exchanging authentication and authorization data (NIST overview)
OpenID Connect (OIDC) – a modern protocol built on OAuth 2.0 using access tokens (OpenID Foundation)
Single Sign-On (SSO) – enables users to log in once and access multiple services
The Role of an Identity Provider
An identity provider (IdP) manages user authentication and issues security assertions to service providers. It:
Stores and manages user credentials
Authenticates users when they attempt to log in
Issues access tokens or security assertions to validate identity
Integrates with multi factor authentication for secure access
What Is Federated Identity?
A federated identity is a digital identity shared across multiple systems, applications, or even multiple organizations. For example:
A user logs in with their corporate credentials to access a partner organization’s web application
A single sign-on (SSO) portal grants access to multiple websites and third-party applications
See how this complements passwordless authentication in Passwordless Authentication Benefits for Businesses.
Federated Authentication
Federated authentication is the process by which a service provider trusts an identity provider to authenticate a user. Instead of directly managing the user’s login credentials, the SP relies on a security assertion from the IdP.
Steps include:
The application requests federated authentication
The IdP verifies the user’s credentials
The IdP returns a security assertion or access token
The SP validates the assertion and grants limited access
Access Management in Federated Identity Systems
Access management defines policies for how users access resources. With federated identity management:
Administrators can grant limited access based on user roles
Applications across domains can be managed centrally
Access control policies ensure sensitive data is protected
User logs track authentication events across services
For additional insights, see the Cybersecurity Guide to Digital Protection.
Enhanced Security with Federated Identity
Federated identity systems provide enhanced security compared to isolated platforms:
Multi factor authentication (MFA) strengthens the authentication process (CISA MFA guidance)
Minimal disclosure ensures only necessary identity attributes are shared
Private identifiers protect user privacy
Identity data remains controlled by the IdP
How Does Federated Identity Work?
The process of federated identity in practice:
A user attempts to log in to a service provider’s application
The application redirects the request to the identity provider
The IdP authenticates the user with credentials and possibly MFA
The IdP issues a security assertion or access token
The SP validates the assertion and grants seamless access
How Does Federated Identity Management Work?
Federated identity management work is built on trust frameworks between organizations:
Federated domains trust the IdP to authenticate users correctly
Protocols like SAML and OIDC define how authorization data is exchanged
The federated identity manager coordinates these interactions
Identity systems remain synchronized across multiple platforms
Access Control in Federated Systems
Access control ensures that granting access aligns with organizational policies:
Role-based access control (RBAC)
Attribute-based access control (ABAC)
Enforcement of compliance standards
Detailed user logs for audits and investigations
Federated Access Across Domains
Federated access allows users to:
Use one identity to access resources across multiple organizations
Securely reach third-party applications and multiple services
Avoid managing multiple accounts or passwords
Work seamlessly across different security domains
Identity Management in a Federated World
Identity management underpins federated systems:
Active Directory integrates with external IdPs
Password management becomes centralized
Authentication is streamlined for user convenience
Access management policies are consistent across environments
For deeper insights, see Gartner’s Market Guide for Identity Governance and Administration (subscription required).
Authentication Protocols: SAML and OpenID Connect
Two major authentication protocols power federated identity solutions:
SAML: XML-based, widely used in enterprise SSO (NIST SAML reference)
OpenID Connect: JSON-based, built on OAuth 2.0 for modern web and mobile apps (OpenID Foundation)
Single Sign On: Convenience Meets Security
Single sign-on (SSO) is the most visible feature of federated identity management. With SSO, users:
Log in once to gain access to multiple applications
Reduce password fatigue
Experience convenience without sacrificing security
Protecting User Privacy with Federated Identity
Privacy is built into federated identity systems:
Minimal disclosure shares only essential data
Private identifiers protect personally identifiable information
Directed identity allows users to control what data is shared
Strategic Initiatives Driving Federated Identity
Organizations adopt FIM for initiatives such as:
Cloud migration projects
Multi-platform integration
Compliance with privacy regulations
Enhanced user experience
Why Federated Identity Matters
Federated identity helps enterprises:
Simplify user authentication
Protect sensitive data
Collaborate securely with multiple organizations
Provide secure access across platforms and domains
Conclusion
A federated identity manager is central to modern identity management systems, enabling federated authentication across multiple domains and organizations. By adopting federated identity management (FIM) with SAML and OpenID Connect, businesses can deliver secure authentication, seamless access, and consistent access management—while protecting user privacy and ensuring enhanced security.
FAQ: Federated Identity Management
What is federated identity management?
A system that allows users to authenticate once and access multiple applications and services across organizations.
How does a federated identity manager help?
It centralizes authentication, connects identity providers and service providers, and enforces access control policies.
Which protocols are used?
SAML and OpenID Connect are the most common.
How does federated authentication work?
The IdP authenticates the user, issues a token or assertion, and the SP grants access.
Why is federated identity important for users?
It enables single sign-on, reducing password fatigue and improving convenience.
How does it protect sensitive data?
Through MFA, minimal disclosure, private identifiers, and secure protocols.