From outsourced development teams to Contractors, Consultants, and even AI, third-party identities are everywhere. With increasing regulatory oversight and escalating cyber risk, the methods by which financial institutions manage these identities must take a higher priority than they sometimes do.
The Complex World of Third-Party Identities in the Finance Industry
The financial industry engages with at least three to four distinct types of third-party users including:
- Contractors and Consultants (short- or long-term)
- Vendor Personnel (support or operational roles)
- Outsourced Offshore Teams
- Non-Human Identities (bots, automation agents)
Each comes with different onboarding processes, access needs, and compliance requirements. Unfortunately, this complexity often results in:
- No single source of truth for third-party identities
- Inconsistent profile attributes across systems
- Non-uniform onboarding, access changes, and offboarding
- Siloed ownership between HR, procurement, and IT
This lack of uniformity increases the attack surface and introduces identity blind spots which traditional access control mechanisms struggle to cover effectively. Organisations are constantly following standard processes in terms of lifecycle management; onboarding, employee termination, internal migration, and more, but without one standard, uniform process, it becomes increasingly difficult for identity access controls to be uniformly applicable for these users.
Third-Party Identities and Identity Governance and Administration (IGA)
By enabling a structured, repeatable process for managing identity lifecycles, IGA tools help organisations to:
- Standardise onboarding, verification, and offboarding of third-party users
- Enforce consistent capture of identity attributes (e.g., security clearances, DBS check statuses)
- Maintain auditability and compliance with regulatory frameworks
- Align non-employee identity treatment with internal employee standards
Inside organisations which face high regulatory burdens such as banks, this approach isn’t just preferred, it’s essential. Uniformity becomes not only a compliance requirement but a safeguard for sensitive data, especially data such as the personal information collected during background checks.
Privileged Access Management (PAM) and Third-Party Identities
While IGA forms the foundation, Privileged Access Management (PAM) also serves as a critical security guardrail, especially when third-party users require elevated access. In terms of elevated access, PAM, like most other things in life, has evolved quickly. It’s no longer just about traditional IT administration; it has adapted quickly to modern technology advancements and now includes:
- Social media and business tool integrations (X/Twitter, LinkedIn)
- Financial transactions
- Cloud infrastructure and DevOps environments (Cloud Service Provider admin consoles, Kubernetes clusters, CI/CD pipelines)
- AI/ML platforms and data analytics tools (machine learning model repositories, data lake access, business intelligence dashboards)
With this expansion of potential threat vectors, we need to incorporate further security measures. This is where Just in Time (JIT) access can be utilised to protect our privileged data.
The Just in Time principle ensures that access automatically expires at a pre-decided time and date of your choosing, for example during onboarding of a temporary employee whose employment you both agree will terminate on a certain date. This reduces the exposure window as a third party will only have access for as long as you decide they need it and no longer. JIT also allows you to vault fewer accounts, resulting in a quicker return on your investment and fast risk reduction.
What Do You Need to Do Next?
As third-party ecosystems grow more complex, the need for structured identity governance is non-negotiable. IGA provides the visibility, consistency, and control to manage third-party identities at scale, while PAM ensures that access, when it’s granted, is secure, monitored, and conditional.
If you’re a CISO, Risk Officer, IAM program leader, or you play another related role in the financial sector, now is the time to ask:
- Do we have a unified, auditable approach to managing third-party identities?
- Are our privileged access controls accounting for modern risk factors like device posture?
- Are our third-party vendors sharing the risk and responsibility?
At CyberIAM, we help organisations answer these questions every day.
Our fully trained and highly skilled experts are ready to serve you, hitting the ground running, helping you to build a more secure, compliant, and resilient identity security strategy, keeping your business safe and mitigating the risks associated with third-party identities.
Let’s start a conversation about how we can help you take back control of your third-party identity landscape, securely and at scale.
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