Building stronger identity security: Enhance your authentication strategy with Alloy

Identity security is bigger than authentication alone

Financial institutions have invested heavily in Customer Identity and Access Management (CIAM) platforms. These systems are excellent at what they were built to do: authenticate users and manage access. Across the industry, “identity verification” and “authentication” are sometimes used interchangeably, making it challenging for financial institutions to assess whether their CIAM setup effectively addresses all layers of identity risk.

That distinction matters. As fraud grows more sophisticated, attacks rarely announce themselves with a single red flag, such as a suspicious login. Instead, fraudsters often operate through a series of seemingly unconnected events: an account opened with stolen credentials, followed by gradual changes to contact details, then a sudden fund transfer. By the time these patterns become clear, the damage is already done. 

Modern identity security requires a layered approach that works across the customer lifecycle. At account opening, when no credentials yet exist, identity verification is essential as part of the National Institute of Standards and Technology (NIST)-defined identity proofing. During login, authentication keeps access secure. For account updates or linking external accounts, re-verification through step-up and risk-based authentication closes gaps that fraudsters often exploit. Together, CIAM and Alloy cover traditional access and protect high-risk transactions, creating a more resilient identity security framework that adapts as fraud tactics evolve.

Verification and authentication explained

When financial institutions talk about protecting their existing customers, they leverage authentication tools — making sure the person logging in is who they say they are. But identity management in financial services is broader than that. It requires a multi-layered, risk based approach that is continuous throughout the client lifecycle. Each layer plays a different role in keeping accounts safe.

Verification

Verification is about establishing whether a person’s identity is legitimate in the first place. It’s a probabilistic process that weighs signals across multiple data points to assess identity trustworthiness, rather than relying on a single yes-or-no check.

Verification happens at onboarding, before credentials exist, but it doesn’t stop there. It can also be triggered during high-risk moments across the customer lifecycle, such as when sensitive actions are taken or when key personal information changes. For example, device risk signals are commonly used during account opening to help determine whether an applicant is likely legitimate.

It’s important to note that identity verification should be continuous. When a customer updates personally identifiable information like a phone number, address, or email, verifying the new information helps ensure those changes weren’t made by a fraudster attempting to take over the account. This continuous approach closes gaps that static, one-time checks often leave behind.

Authentication

Once a customer has been verified, authentication confirms that the same person is returning when they log in. Unlike verification, authentication is a deterministic process, meaning it relies on binary yes/no decisions. It doesn’t weigh a wide range of outputs to determine the outcome — it simply determines whether or not the credentials match.

To authenticate, a user might log in with a password and then enter a one-time code sent to their phone. If both inputs are correct, the user is authenticated.

Credential creation also falls under authentication. It occurs after verification and involves establishing the credentials that will be used to recognize the customer in the future. This is where usernames, passwords, passkeys, biometrics, and MFA methods are created and bound to a verified identity. These credentials become the specific factors a CIAM platform evaluates during future authentication events.

Here’s a quick way to think about verification vs. authentication: verification establishes trust while authentication proves presence.

CIAMs excel at credential management and authentication

CIAM platforms’ core capabilities are to manage the mechanics of logging in, verifying credentials, and setting permissions for what a user can and cannot do once inside a system. 

They handle credential storage, multi-factor authentication (MFA), and session management across devices and applications, making sure the person coming back is the same person who was verified at onboarding.

CIAMs are especially effective in scenarios like:

• Creating credentials during online or digital banking enrollment
• Enforcing entitlements and permissions once a user is authenticated
• Maintaining sessions across multiple applications without requiring users to repeatedly re-authenticate

But layers of protection should be added around access management

CIAMs are really good at answering a specific question: "With the given form of authentication (username/password, passkey, biometric, OTP), do we have reasonable certainty that this person is who they say they are?"

While these platforms can confirm whether the person logging in matches the credentials on file, there is an opportunity to assess the risk level of customers throughout the entire lifecycle. CIAMs will see that the credentials are correct. From there, you’ll want to layer in tech to help you consider the other telltale signs of fraud — like changes in contact information, new external accounts being linked, payments through unfamiliar channels, or unusual login behaviors. 

That’s where Alloy comes in. 

This division of responsibilities creates a stronger architecture when Alloy and CIAM work together.

Here are a few common scenarios where risk-based authentication drives the step-up to make all the difference.

• Changes in personally identifiable information (PII): A customer updates their address or phone number, which could signal an account takeover in progress.
• Adding a new source of external funds: Linking an unfamiliar bank account or payment method may indicate unauthorized access.
• Initiating a payment through a new channel: A wire transfer requested through the call center could be a red flag when the customer typically uses the app.
• Unusual login location, behavior, or device: Access patterns that deviate from the norm often precede fraudulent activity.

Alloy helps financial institutions catch these risks by providing access to comprehensive third-party data, LLM models, and actionable AI tools to dramatically improve effectiveness. By unifying signals from hundreds of data solutions into a single view, Alloy gives teams a clearer picture of identity risk. We power risk-based authentication by feeding richer identity context back into the CIAM workflow, ensuring access decisions are informed by more than just credentials.

When elevated risk is detected, Alloy can perform the step-up from its expansive list of solution providers and send the final decision to the CIAM. 

Alloy enables adaptive controls so institutions can tighten or loosen requirements depending on the situation, balancing security with customer experience. This flexibility is key — not just to stay ahead of evolving fraud patterns, but also to curate dynamic, personalized experiences.  It empowers the line of businesses to proactively manage fraud risk while balancing the customer experience.

Alloy adds operational flexibility

With Alloy in your tech stack, financial institutions can also:

• Force session expiration when risk is detected. If Alloy flags suspicious activity, it will notify to end the CIAM session immediately to prevent further access.
• Trigger dynamic step-up authentication. Rather than rely on static multi-factor rules, Alloy lets organizations tailor step-up requirements to the risk level of each event using risk-based authentication. A routine login from a known device might not require extra steps, while a wire transfer following a contact detail change might prompt additional verification.
• Orchestrate a wide range of data solutions. Alloy integrates with a variety of data solutions — from biometric checks to device intelligence providers — and consolidates those signals into a single risk decision. This gives teams a holistic view of identity risk without having to manage individual integrations. 
• Swap or add verification vendors without heavy lifting. Alloy’s SDK allows institutions to change or expand their verification toolkit without rebuilding their authentication infrastructure. That flexibility makes it easier to adopt new technologies and adapt to shifting fraud patterns. In addition to preventing vendor lock-in, this keeps things running smoothly, dynamically adapting verification workflows in the event that a data source is temporarily unavailable. 
• Collect data across the customer journey. Alloy enables your institution to build a comprehensive data repository that links every customer transaction through their banking journeys.  This offers incredible power to build customized LLM models or leverage actionable AI tools to spot fraudulent activity based on your customers' activity.

Together, these capabilities give financial organizations the agility to respond to evolving risks without overburdening their customers or engineering teams. CIAM platforms continue to manage credentials, while Alloy ensures those sessions are grounded in strong, adaptable verification.

A complementary approach: Build with Alloy

Implementing the Alloy platform for risk-based authentication is about combining strengths to cover the entire spectrum of identity security. The benefits of this complementary approach include:

• Specialized expertise: Each platform evolves in its own lane. CIAMs strengthen credential management, while Alloy advances risk-based authentication and fraud detection through data orchestration. We provide access to an expansive list of solution partners for step-up, automatically engaging the moment it’s needed.
• Stronger risk management: Layering risk-based authentication with login authentication reduces blind spots and prevents single points of failure.
• Comprehensive coverage: Customers are protected across the entire lifecycle, from account creation to post-origination transactions.
• Flexibility and resilience: Alloy makes it easy to add or swap a variety of third-party data vendors, update decision logic, or adapt authentication requirements as fraud tactics change — all in real time.

By building with Alloy, financial institutions can extend the value of their CIAM investment. Instead of relying on one system to cover everything, they gain a purpose-built combination, working together to create seamless experiences that don’t compromise on security.

How to integrate Alloy with a CIAM

Integrating Alloy alongside your CIAM platform is designed to be straightforward. With Alloy's SDK, financial institutions can integrate once and gain the ongoing flexibility they need to adapt endlessly without rebuilding their authentication infrastructure.

That means:

• Seamless connectivity: Institutions can connect Alloy to their existing CIAM workflows without a heavy engineering lift.
• Multi-vendor management: New data providers or verification tools can be added through Alloy’s dashboard, reducing reliance on one vendor and avoiding lock-in.
• Risk-based triggers: When Alloy detects elevated risk, it can trigger step-up authentication tailored to the risk or notify the access management platform to end the session.

This setup allows teams to scale their identity security strategy without slowing down product development or overloading engineering resources.

Alloy works with CIAM systems to strengthen identity and fraud risk prevention

Alloy complements your CIAM platform by strengthening authentication decisions with identity verification and risk intelligence, ensuring access is evaluated in the context of the full customer journey.

Including Alloy as part of your authentication strategy allows you to create a layered identity security architecture that is more flexible, more adaptive, and more resilient.

As fraud tactics grow more sophisticated and regulatory requirements become stricter, this layered approach is no longer optional. Institutions that combine a CIAM with Alloy are better positioned to protect customers, respond quickly to emerging risks, and support safe growth.

After all, the future of identity security is about choosing the right combination of solutions to create secure, seamless experiences that customers can trust. And doing so future-proofs your defenses as threats, technologies, and expectations continue to evolve.