Federated Identity

Identity is the foundation of that security today. Yet managing digital identity across multiple systems and domains is complex, especially as users interact with an increasing number of platforms across different organizations.

This is where federated identity comes in. It’s a concept designed to simplify and secure identity management in a connected world.

What is federated identity?

Federated identity is a method that allows users to access multiple systems or services using a single digital identity, which is authenticated by a trusted identity provider. Rather than creating separate credentials for every application, users can log in once with a federated identity and gain access across a network of participating domains.

This model is built on trust relationships between organizations. One entity (the identity provider) manages authentication, while other entities (the service providers) rely on that verification to grant access.

How federated identity works

At a high level, federated identity works by decoupling the authentication process from the applications users want to access. Here’s how it typically plays out:

First, a user attempts to access a service provider’s application. Instead of being prompted to create a new account or log in locally, they are redirected to an identity provider they already trust (like their employer or a third-party authentication platform).

Once authenticated, the identity provider sends a secure assertion to the service provider, verifying the user’s identity and potentially including information about their roles or permissions. The service provider then grants access without ever needing to store or manage the user’s credentials.

This architecture is commonly implemented using standards like SAML (Security Assertion Markup Language), OpenID Connect, and OAuth.

Benefits of federated identity

Before diving into the advantages, it’s worth recognizing the broader shift it supports: federated identity enables a more connected, secure, and user-centric digital experience across organizational boundaries.

Some of the key benefits include:

• Improved user experience: Users no longer need to remember multiple passwords or go through repeated login processes.
• Reduced administrative overhead: Organizations don’t need to manage as many user accounts, which reduces IT burden.
• Enhanced security posture: Centralized authentication can support stronger, more consistent security policies like multi-factor authentication.
• Better collaboration: Businesses can enable external partners, contractors, or customers to access services without compromising internal security.

These benefits are particularly valuable in environments where organizations need to maintain access control across many applications, users, and business units.

Use cases for federated identity

Federated identity is already embedded in many everyday experiences, especially in enterprise and consumer ecosystems. Common use cases include:

• Enterprise workforce access: Employees use a single corporate login to access tools like Google Workspace, Salesforce, and Zoom.
• Higher education: Students and faculty authenticate through a central university system to access external research databases or learning platforms.
• Government services: Citizens use one digital ID to interact with multiple government departments.
• Healthcare collaboration: Clinicians across different health systems access patient data through a shared identity framework.

These examples illustrate how federated identity can reduce barriers to access and streamline collaboration without compromising security.

Challenges and considerations

While federated identity offers clear advantages, it’s not without complexity. Organizations must carefully evaluate how to implement and govern federated identity in a way that aligns with their security, compliance, and user experience goals.

Key considerations include:

• Establishing and maintaining trust relationships between identity and service providers
• Navigating privacy and data-sharing regulations
• Ensuring interoperability across standards and protocols
• Managing identity lifecycle and access entitlements across federated domains

A thoughtful strategy and strong governance framework are essential to make federated identity work at scale.

Federated identity in 2025 and beyond

As organizations adopt more cloud services, embrace hybrid work, and integrate with broader digital ecosystems, federated identity is becoming a foundational element of modern identity strategy.

It represents more than just a technical solution. It reflects a shift toward user-centric, decentralized identity models where access is no longer defined by isolated systems but by trusted relationships across domains.

In a world where collaboration is increasingly without boundaries, federated identity provides the trust fabric needed to support secure, efficient access at scale.

Learn more about the evolution of identity and access management in the 7 A’s of IAM blog post.