With the ever-increasing interconnectedness of the world, the adoption of IoT (Internet of Things) is soaring. Smart homes to industrial automation, billions of devices are continuously exchanging data, thus building an ever-growing digital ecosystem. Though these devices enhance efficiency, they bring with them new security challenges, particularly in Identity and Access Management (IAM).
IoT devices work independently and exchange enormous amounts of data without human intervention. This raises a very pertinent question:
How can we protect billions of these identities from accessing any systems and data except those that have been authorized?
Traditional IAM models were based on humans. But IoT has posed a challenge which is altogether new. In the IoT space, machines, sensors, and applications need to authenticate, authorize, and be managed in the lifecycle just as their human users are.
The in-depth article looks at the following:
✅The IAM challenges with IoT
✅What is the danger if IAM for IoT devices is overlooked?
✅Best Practices on IAM in IoT implementation
✅Case study with a real world: how IAM has protected an international IoT infrastructure
🔥 Key Challenges in IoT IAM
Where in conventional IT environments, IAM secures human users accessing applications, IoT IAM has an entirely different problem to solve; they need to manage billions of non-human identities. For now, here are the biggest challenges organizations face:
1. Device Proliferation & Identity Management
📌Challenge: With billions of IoT devices going into a global network, impossible for humans to manage and authenticate them; IAM needs to scale exponentially to match it.
A smart factory has thousands of IoT sensors controlling industrial automation. Without a robust IAM system, rogue devices can be added and gain unauthorized access to critical manufacturing controls.
💡Solution: IAM must employ automated identity provisioning and certificate-based authentication to manage device identities securely.
2. Lack of Standardization & Fragmented IoT Ecosystems
📌Challenge: In an IT environment, IAM follows standard protocols (LDAP, OAuth, SAML), whereas IoT devices communicate using several proprietary protocols like MQTT, CoAP, REST APIs. That makes centralized IAM enforcement hard due to lack of uniformity.
A connected car integrates navigation, cloud services, and third-party apps-each using different methods of authentication. Without federated IAM, the management of smooth authentication across the services is really challenging.
💡Solution: Organizations should implement interoperable IAM frameworks capable of using federated identity models in bringing together various IoT authentication protocols.
3. IoT Device Lifecycle Management
📌Challenge: Unlike employees IoT devices are used for many years without any change of role or transfer to a new organization. They need to be onboarded, actively used, and securely retired to prevent breaches.
A corporate office had an old security camera still on the network. Hackers used it as an entry point to inject malware.
💡Solution: IAM should ensure that the provisioning and decommissioning workflows are tightly coupled in a manner that all the decommissioned devices lose their network access immediately.
4. Weak Authentication & Lack of Access Control
📌Challenge: Most IoT devices remain static with weak default passwords that can be easily compromised through brute-force attacks. More of them have privileges more than needed, making it highly vulnerable to security vulnerabilities.
An attacker breached a smart thermostat within a corporate building and leveraged the unused network permissions to pivot his way into even more privileged systems.
💡Solution: Deploys strong authentication methods, for example, certificate-based authentication or MFA for IoT, and deploys RBAC, so that devices gain no more than they actually need to access.
5. Threat & Real-Time Monitoring
📌Challenge: IoT devices are smart working devices that do not exhibit predictable human like behavior thereby becoming hard to decide any malware attack. And since without real-time monitoring, any IoT device infected may bypass the system without coming into one’s notice.
A Botnet attack compromised an IoT security camera that uploaded massive data to unknown servers. And this breach remained undetected at the right time because IAM in Real Time does not make any monitoring.
💡Solution: Use AI-driven IAM monitoring for the detection of anomalous behavior of IoT devices along with blocking unauthorized activity immediately.
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🚨Potential Risks of Having Weak IAM Policies in IoT
Absence of strong IAM policies for IoT may result in disastrous data breaches, operations shutdown, and compliance infringement. An organization is vulnerable to very severe cyber threats if IAM controls are not implemented. Some include:
1. Significant Attack Surface & Unrestricted Access
An uncontrolled device without IAM controls can connect to an enterprise network, providing an easy entry point for attackers.
In the year 2016 Mirai botnet attacked thousands of insecure IoT devices which comprise of security cameras and routers; it crippled Twitter, Netflix, and PayPal, amongst other main websites through DDoS. These devices lacked robust authentications and using default credentials. This allowed malicious actors to achieve access control for these devices
💡IAM Solution: Certificate-based identities should be enforced and implemented to allow strong authentication mechanisms to prevent unauthorized devices from joining the network.
2. Data Breaches & Unauthorised Device Communication
IoT devices collect an enormous amount of sensitive data. Such devices if compromised may have both financially and reputational consequences.
In 2019 a smart home camera company was hacked by hackers exploiting weak IAM policies. Hackers accessed thousands of home security cameras and private video feeds.
💡IAM Solution:
✔️ Implement Zero Trust IAM principles to continuously authenticate device behavior
✔️ Role-based access control restricts the data access to only authorized devices and users
3. Privilege Escalation & Insider Threat
IoT environments with weak IAM governance often over-provision access, thus making way for attackers and malicious insiders to easily escalate privileges and compromise systems.
Hackers accessed patients’ records of a medical center through an unauthorized IoT-connected medical device that incidentally was an MRI scanner. Hackers took advantage of poor access controls for lateral movement across the network.
💡IAM Solution:
✔️ Make use of JIT access controls, with only temporary, least privilege access to the IoT device
✔️ Continuously scan for access to the IoT device to give timely detection of privilege abuse.
4. Orphaned & Abandoned Devices Becoming Attack Vectors
IoT devices often outlive their original purpose; however, their access credentials are not de-provisioned. They thus remain an open door for cyber-criminals.
Non-functional, orphaned IoT thermostats formed part of the legacy smart building system and still lingered on the corporate network. Malware injection started through the orphaned devices, continued to critical building systems, and began to have an impact on HVAC controls and security controls.
💡IAM Solution:
✔️ Implement automated de-provisioning to ensure that retired devices are permanently removed from the network
✔️Apply device lifecycle policies. This will ensure their credentials are revoked when the IoT devices hit end-of-life.
5. Non-Compliance Issues & Legal Sanctions
Poor IAM policies lead to non-compliance with industry standards, making the organization liable for heavy penalties and legal charges.
Regulatory Considerations:
🔴 GDPR & CCPA: Organizations processing personal data through IoT devices must secure identities and prevent unauthorized access.
🔴 NIST IoT Cybersecurity Standards: Government agencies and enterprises must enforce IAM-based access control to avoid security risks.
🔴 HIPAA Compliance for IoT in Healthcare: Unauthorized access to medical IoT devices can result in severe patient data breaches and legal action.
💡IAM Solution:
✔️ Use audit-ready IAM tools to track and document every device interaction for compliance reporting.
✔️ Deploy policy-based IAM enforcement to ensure that only compliant devices access regulated data.
🔑 Best Practices for Implementing IAM in IoT
1. Implement Device Identity Management
Each IoT device should have a unique cryptographic identity, such as the login credentials for users. The exploitation of unauthorized devices can be prevented through digital certificates or blockchain-based IDs.
Certificate-based authentication was used in the implementation by a smart city for its connected traffic lights, surveillance cameras, and environmental sensors. This guaranteed only that city-authorized devices could communicate with the control systems as no rogue devices could inject false data into the network.
Suggested Image: Diagram on device identity assignment through digital certificates.
2. Use a Zero Trust Model for IoT
“Never trust, always verify.” Continuously authenticate each IoT device before granting them access to the corporate networks. Implement risk-based access controls based on the behavior, location, and security posture of the device.
A global logistics company implemented Zero Trust principles on its entire fleet of GPS-tracked delivery vehicles. Devices seeking to access the company’s tracking system were continuously verified using location-based authentication. Any unauthorized device trying to access from an unusual location was blocked automatically.
Suggested Image: Architecture of IoT under Zero Trust, showing real-time authentication of the devices.
3. Automate Provisioning & Decommissioning
Use IAM automation to dynamically onboard new IoT devices and revoke access when devices reach end-of-life. This prevents orphaned devices from becoming security risks.
A healthcare provider automated the identity lifecycle for connected medical equipment like heart monitors and infusion pumps. IAM automation denied the device access as soon as the equipment reached its retirement, making the malicious actor not in a position to take advantage of outdated devices.
Suggested Image: IoT device lifecycle management—onboard, in active use, secure decommissioning.
4. Strong Authentication and Encryption
Instead of relying on weak default passwords, IoT authentication should use:
✔️Mutual authentication: both ends authenticate each other.
✔️End to end encryption is used to block interception of confidential data.
An industrial automation company implemented mutual authentication between factory sensors and cloud-based analytics platforms. This prevented “man-in-the-middle” attacks, where cybercriminals could intercept and manipulate factory control commands.
Recommended Image: Encryption of the communication between the IoT devices and cloud services.
5. Continuous Monitoring & AI-Based Anomaly Detection
AI-driven IAM can detect anomalous device activity, such as a sensor suddenly sending large amounts of data outside normal behavior, and block unauthorized access in real time.
A financial services company deployed AI-driven IAM to monitor connected ATMs. When an ATM started making unusual high-value withdrawals, IAM detected the anomaly, flagged it for investigation, and temporarily suspended transactions before fraudsters could drain accounts.
Case Study: How a Global Automotive Manufacturer Secured Its IoT Ecosystem with IAM
The Challenge: A multinational automobile firm experienced the fleet of its connected vehicles increase across the world, bringing along the threat of increased cyberattacks. The company’s IoT-enabled cars were connected to cloud services, navigation service providers, and third-party applications. But there were risks and challenges in:
- Unauthorized Access Risks:
Hackers remotely tried to access some car models with weak authentication protocols and access vehicle control systems.
- Lack of Device Identity Management:
Millions of vehicles relied on static credentials for access to navigation, software updates, and diagnostic tools, all of which became vulnerable to credential leaks.
- Difficult Lifecycle Management:
When a car changed ownership, the previous owner’s credentials were still active, leading to potential privacy violations.
- Data Integrity Issues:
Without end-to-end encryption, some data from in-vehicle communication were intercepted and altered by attackers.
The Solution: IAM-Driven Internet of Things Security
Step 1: Device Identity with Digital Certificates
The company replaced the static credentials by assigning a unique digital certificate for every vehicle. The company authenticated all certificates before giving the car any access to the online services. In that way, only authenticated vehicles could interact with the company servers.
Step 2: Zero Trust Security Model for Connected Vehicles
Instead of trusting any car by default, the company implemented a Zero Trust model, where every vehicle’s requests were analyzed based on:
- Location behaviour (e.g., if a car suddenly attempted access from a flagged country, authentication failed).
- Device behaviour (e.g., if a car requested multiple software updates in an hour, IAM flagged it as potential tampering).
Step 3: Auto-Onboarding & Ownership Transfer
- For every sale of a car, IAM auto-deactivated the original owner’s access credentials, and issued one to the new buyer ensuring both privacy and security.
- The system automatically deactivated access for vehicles that reached the end of their service life.
Step 4: AI-Based Anomaly Detection for Fraud Prevention
- The company used AI-driven IAM analytics to monitor connected car activity.
- If a vehicle started sending excessive data to unknown servers, IAM flagged it for investigation.
- If an attacker tried remotely unlocking a car using stolen credentials, multi-factor authentication (MFA) was triggered as an additional security layer.
Step 5: Car-to-Cloud Communication through End-to-End Encryption
- TLS 1.3 encryption was implemented for all vehicle-to-cloud communications, ensuring that car diagnostics, navigation data, and software updates were tamper-proof.
The Results:
- 60% Reduction in unauthorized attempts at access
By implementing IAM-based Authentication, hackers could no longer gain access to the vehicle systems using weak credentials.
- Compliance with Global Cybersecurity standards
The solution adhered to ISO 21434 Automotive Cybersecurity and GDPR standards for the protection of user data
- Hassle-free ownership transfer without any access from previous owners
The automated IAM system ensured that owners’ data remained private, preventing unauthorized access from previous owners.
- Cost savings along with Efficiency gain
Automated IAM workflows reduced manual security interventions by 40%, cutting costs on fraud investigations and cybersecurity breaches.
Final Thoughts: Ignoring IAM in IoT is a Disaster Waiting to Happen
The implications of not having strict IAM policies for IoT are as follows:
⚠️ Financial losses due to data breaches and ransomware attacks
⚠️ Operation downtime because of IoT device compromise
⚠️ Leaked consumer or enterprise data lead to reputational damages
⚠️ Legal liability because of a breach of regulatory specifications
IAM has turned out to be a business imperative rather than merely an IT responsibility. With firm identity management strategies deployed, the organization can strengthen its IoT ecosystem further against cyber threats and outsmart evolving risks.
💬 How is your organization securing IoT identities? Let’s discuss in the comments!
