Why are digital identities needed? Name the five purposes.

Authentication and authorisation, personalisation, trust, security and compliance: digital identities let a system attribute actions to a subject, tailor services, prevent fraud, secure communication and meet legal requirements.

Each purpose is a different stakeholder's reason for wanting identities:

1. Authentication and authorisation: unambiguous assignment of subjects makes access control possible in the first place.
2. Personalisation: content, services and permissions can be tailored to the person and their needs.
3. Trust: identities help prevent fraud, identity theft and unauthorised access; parties can rely on who they are dealing with.
4. Security: secure communication, data exchange and transactions require knowing the counterpart.
5. Compliance: laws and regulations, for example on data protection or mandatory identity checks (know your customer), demand verified identities.

Only the first is strictly about access control; the other four explain why businesses invest in IAM far beyond the login screen.

Go deeper:

• Know your customer (Wikipedia) — the compliance side: why banks must verify identities by law.