The Evolution of Identity and Access Management (IAM) in Financial Services: From Legacy Systems to Modern Authentication

This paper examines the evolution of Identity and Access Management (IAM) systems in financial services, focusing on the transition from legacy architectures to modern authentication frameworks. Through a detailed analysis of ETRADE's transformation as a primary case study, the article explores the challenges and solutions in implementing contemporary authentication methods, including OAuth 2.0, OpenID Connect, and Multi-Factor Authentication. The study investigates the impact of emerging technologies such as AI-driven authentication, blockchain-based identity solutions, and passwordless authentication on security effectiveness and user experience. By analyzing implementation strategies, security-usability trade-offs, and regulatory compliance requirements, this article provides insights into successful IAM modernization approaches while highlighting future trends in financial services authentication.