Nate Szytel | CEO, Next Reason
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Nate Szytel | CEO, Next Reason
More About This Author >
I’ll never forget the time I spent an hour trying to reset my bank password. After recovery emails and chatbots, the solution was a customer rep who verbalized a new password over the phone. Really? After all those hoops—supposedly for my protection—the journey ended with a bouncer waving me through.
The problem wasn’t just bad UX. It was the outdated idea of customer identity as a static, one-size-fits-all gate—a rigid password or PIN standing between customers and what they want. Businesses know that friction matters: 67% of users say they’d switch services for a better login. But security matters too: a data breach costs $5M on average in churn, reputational damage, and downtime.
The Paradox: Security and UX at Once
So, if a business hasn’t prioritized a seamless customer login experience, they have a price to pay with adoption, loyalty and trust. But, if they haven't invested in security via fraud prevention, always verify, step-up auth, they are bound to become a news headline. Is this new reality a kind of paradox where businesses need to deliver security and user experience at the same time? And is it only humans who need the access to begin with?
Stating it this way makes the answer obvious, customer identity needs to change.
The answer? Treat identity as a fluid, intelligent form—a shape-shifting concierge rather than a fixed gate. This “concierge” watches for cues: Is this a user or an AI agent? Is the device familiar? Is the time and location normal? What service is being accessed, and how sensitive is the data? It processes hundreds of signals in a fraction of a second to build a real-time risk profile.
When risk is low, identity becomes invisible—zero-UI authentication. When risk is higher, the form changes: a biometric scan, a passkey, or a push notification. Identity adapts to the moment, device, and agent.
Practical Steps for Your CIAM Roadmap
1. Move beyond the checkbox.
Stop treating authentication as a compliance task. Make it a continuous, intelligent risk assessment that adapts to each interaction. The goal: the right decision at the right time, balancing friction, trust, and speed.
2. Instrument every step.
AI adapts only if it has rich, meaningful data. Capture contextual signals not just at login, but during registration, password resets, and high-risk transactions. Without this telemetry, AI is flying blind.
3. Measure what matters.
Surface-level metrics like “successful logins” don’t tell you if identity is helping or hurting the business. Instead, track:
- Conversion rates by step: Pinpoint drop-offs—email verification, MFA setup, payment validation—and remove friction that kills revenue.
- Friction vs. retention: Correlate repeated MFA prompts and resets with churn.
- Security impact per flow: Compare fraud prevention with conversion costs to fine-tune both.
- Satisfaction in context: Use NPS or CES tied to identity events to see how trust impacts loyalty.
When you measure the right things, identity shifts from IT expense to revenue driver.
Simple Case Study: Turning Registration Drop-Offs into Revenue
A global retail brand saw 38% of new users abandon registration when prompted for MFA. Our analysis showed customers didn’t understand why it was needed for low-value transactions. We decided to make MFA optional for low-risk sign-ups and keep it mandatory for high-risk ones. Result: 23% more completed registrations and an 8% lift in first-purchase revenue—without more fraud.
The Future: Agent-Friendly Identity
Early on, I saw first-hand that the real value of implementing CIAM was fairly unknown–it was just too soon to tell. Now in 2025, the data is clear that removing friction and enhancing security is essential for unlocking growth. And now, there’s a new dimension—AI agents acting for us:
- A smart fridge ordering groceries.
- A bank AI rebalancing a portfolio.
- A booking agent securing flights and hotels.
Clear examples where login isn’t just friction, it’s a barrier to commerce.
The bank in my story couldn’t shape-shift—it handed me the same key it gives everyone and frustrated me along the way. Tomorrow’s winners will hand customers and their agents, a form-fitting, intelligent key that changes shape in real time. When the doors are always moving, only shape-shifting identity can keep them open.