How are IAM and PAM applied in practice?

IAM centralizes authentication and authorization, granting each user only the permissions they need under least privilege. PAM holds privileged credentials in a vault, enforces their controlled use and records administration sessions for audit and incident response.

What does DORA require in this regard?

DORA requires sound access and identity controls within ICT risk management, with particular attention to access carrying elevated privileges. IAM and PAM are the usual means to implement least privilege and demonstrate the traceability of privileged access.

Glossary · Cybersecurity · Identity and access

IAM / PAM: identities and privileged access

Q: What is the difference between IAM and PAM?

IAM (Identity and Access Management) governs the identities and access of all users: authentication, authorization and least privilege. PAM (Privileged Access Management) is a specific layer for privileged accounts, with reinforced controls such as credential vaulting and session recording.

IAM (Identity and Access Management) governs who each user is and what they can access: authentication, authorization and least privilege. PAM (Privileged Access Management) is the specific discipline for privileged accounts —administrators and access with elevated permissions—, where weak control concentrates the greatest risk.

What each discipline covers

IAM — manages the lifecycle of identities, authentication and authorization for all users against the systems.
PAM — reinforces control over privileged accounts, the ones with the greatest capacity to cause harm if compromised.
Least privilege — each identity receives only the permissions it needs, avoiding the unnecessary accumulation of rights.
Credential vaulting and session recording — privileged credentials are held in a vault and sessions are recorded for audit and incident response.

Why it matters in regulated banking

The abuse of privileged accounts ranks among the most serious causes of incidents at financial institutions. DORA requires robust access and identity controls within ICT risk management, and NIS2 reinforces that requirement across essential sectors. An IAM layer based on least privilege, complemented by PAM with credential vaulting and session recording, provides the control and traceability the supervisor expects: it limits access, records it and makes it possible to reconstruct what each privileged identity did.

How Vermont Solutions helps

Identity and privilege control

We support financial institutions in designing their identity and access controls, with least privilege and PAM over privileged accounts, aligned with DORA.

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Fuentes

NIST — identity and access management

Last updated: 2026-06-21. Editorial content by Vermont Solutions, citable with attribution.