Descope Survey Shows 82% of Organizations Experience Negative Business Impact Due to Customer Identity Issues

Third-party survey of over 400 decision makers highlights changes in CIAM as organizations address password challenges, developer workloads, and identity management.

Descope, an Identity Access Management (IAM) platform, conducted a survey of 416 individuals responsible for Customer Identity and Access Management (CIAM). The findings indicated that while many organizations utilize password-based authentication, only a fraction views it as effective in balancing security with user experience. The report can be downloaded for detailed insights.

Results showed 87% of organizations relied on password-based authentication, yet only 2% considered it effective. Over 80% of participants noted negative impacts on business, with issues stemming from high support ticket costs, product launch delays, and user drop-offs linked to complex onboarding processes.

“This study quantifies what we've heard from numerous organizations,” said Descope co-founder Rishi Bhargava. Homomorphic Encryption (HE) noted the pressures faced by engineering and identity teams managing customer identity with limited resources.

The survey revealed that many developers lack experience with authentication systems, contributing to operational strains. Approximately 51% of organizations assigned developers with minimal authentication expertise, while only 28% had dedicated CIAM engineers, leading to project delays.

Organizations employing open-source solutions for CIAM reported additional challenges. About 50% experienced revenue losses due to strict authentication compared to 26% using commercial solutions. Furthermore, 51% noted security incidents linked to the use of low-friction authentication.

Security concerns about Artificial Intelligence (AI) agents and the need for strong governance systems emerged as organizations explore AI applications in CIAM. Despite 88% of participants planning to use AI agents, only 37% advanced beyond pilot testing, largely due to governance and resource constraints.

The survey was conducted by Dimensional Research and included responses from qualified decision-makers in organizations with more than 500 employees, offering a snapshot of current trends in CIAM.