Bare Metal Cyber

You are listening to the audio edition of a Wednesday “Headline” feature from Bare Metal Cyber Magazine, developed by Bare Metal Cyber. This piece is for the leaders who have to sign off on risk and transformation, look at identity dashboards that do not agree with each other, and still answer a simple question from the board: can we trust the identities in this system enough to move faster, not slower, over the next few years.

Picture a late-night call with your Chief Information Security Officer (C I S O), your Chief Information Officer (C I O), and a couple of business leaders. A major cloud initiative or an Artificial Intelligence (A I) rollout is on the line. You have workforce directories, Human Resources (H R) data, cloud identity consoles, and application admin panels all trying to describe who has access to what. None of them quite match. Someone asks whether a particular group of administrators still needs the level of access they have. The silence on that question is not about technology; it is about trust in the underlying identity story. That moment is often where identity bankruptcy becomes visible.

Identity bankruptcy is not usually a single disaster. It is the realization that you no longer believe your own answers to two basic questions: who is this, and what should they be able to do. On the surface, things can look fine. The organization may have strong authentication, clean looking dashboards, and modern Identity and Access Management (I A M) products in place. But beneath that gloss sits years of shortcuts, mergers, exceptions, and side doors. The result is a kind of slow-motion insolvency in your trust model. You are carrying huge amounts of identity debt, and sooner or later the interest comes due in the form of incidents, audit findings, and stalled projects.

To make sense of that debt, it helps to think about identity like a balance sheet instead of a product catalog. On the asset side you have things that make trust defensible: a single, authoritative source for people data, directories that align with that source, device identity you can actually prove, and joiner–mover–leaver processes that are observable end to end. On the liability side you have orphaned accounts, stale entitlements, extra directories kept “just in case,” local administrators nobody can justify, hard-coded secrets in scripts, and approvals buried in old email threads. You may not see those items in financial statements, but attackers, regulators, and auditors see them clearly when something goes wrong.

Most organizations do not go broke on identity overnight. They drift there through small, reasonable decisions that never get cleaned up. A contractor’s account stays active because they might come back. A merger closes and the new business unit keeps its own domain and directory because the integration is “phase two” and phase two never arrives. A Software as a Service (S A A S) platform launches with local user accounts instead of federation to hit a deadline. An internal tool is granted broad admin rights because nobody has time to design finer roles. Each move is rational in isolation. Together, they create a landscape where no one can say with conviction how many identities exist, which ones are privileged, and which ones should have been retired years ago.

Over time, people stop seeing these conditions as exceptional. Broken joiner–mover–leaver flows become “just how things work here.” Every major audit flags the same access issues, and remediation plans become more about managing findings than fixing causes. Security teams learn to live with the idea that nobody really owns the full identity story. Business teams build workarounds to avoid dealing with slow entitlement changes. Developers hang on to old credentials because requesting new access is painful. Identity debt becomes part of the culture. When a serious incident finally lands on the table, the team discovering it is almost never surprised by how twisted the identity paths turn out to be.

From here, it is worth looking more closely at that identity balance sheet. Identity assets are anything that increases the clarity and reliability of “who is this” and “what can they do.” A clean H R system that truly defines who works for you is an asset. A primary directory that accurately reflects that system is an asset. A device inventory that associates machines with people and roles is an asset. Well-defined roles for key applications, tied to real business responsibilities, are assets. These are the things that let a leader say, under pressure, that access lines up with how the organization actually works.

On the other side, identity liabilities compound quietly. Orphaned accounts sit untouched long after someone has left the company. Service identities run with overly broad permissions because nobody wants to risk breaking an integration. Old domains and directories hang around after mergers. Temporary access grants become permanent because nobody schedules the clean-up. New cloud services and S A A S tenants are spun up by teams who never connect them back to central identity governance. Each of these items adds to the pile of trust you are extending without real visibility. You are paying interest every day in the form of investigations, manual reviews, and the simple anxiety of not knowing.

Identity debt grows fastest where the organization changes quickly. Mergers and acquisitions bring in entire identity ecosystems that are allowed to coexist indefinitely. Cloud migrations introduce managed identities, keys, and platform policies that sit partly outside traditional governance. S A A S adoption creates a layer of local users, roles, and tokens controlled by business units, not by central security. A I initiatives attach new processing capabilities to data sets defined by half-trusted identity models. In that kind of environment, it is easy for a leader to underestimate how many trust assumptions now depend on identity data that nobody owns end to end.

The real danger shows up when your trust signals stop making sense. On paper, your environment looks strong. Multi Factor Authentication (M F A) is widely deployed. Risk-based policies are in place. Devices are marked compliant. Logs feed into nice looking dashboards. But under those signals, the mapping between identities, entitlements, and real-world responsibility has drifted. A risk engine flags an unusual login, only for the team to realize the account belongs to a long departed contractor whose access was never removed. A Zero Trust Network Access (Z T N A) policy confidently allows a system account to reach a sensitive database, yet no one can explain why that access was ever granted. The controls are behaving as designed, but the identity story they rely on is wrong.

Modern identity-centric controls assume that if enough signals line up, the underlying trust is sound. The user appears known, the device appears compliant, the role looks appropriate, and the behavioral pattern falls within the baseline, so access is granted. Identity bankruptcy corrupts those assumptions. The “known” user might actually be a reused or shared account. The “compliant” device might be a lab machine that multiple people use with no real ownership. The “baseline” may include months of quiet misuse. When threat hunters and incident responders start second-guessing the identity data behind alerts, you are seeing the cost of that corruption. They spend time verifying who an account really belongs to, instead of focusing on the behavior itself.

This misalignment shows up in strategy too. Investments in fine-grained authorization, analytics, and segmentation produce less value than the business expects. Teams keep making exceptions to policies because rigid enforcement would expose all the inconsistencies in identity data. Power users and administrators operate under a haze of “do not touch this, we are not sure what will break,” which undermines the idea of least privilege. When senior leaders ask, “How confident are we that these people and services should have the access they do,” the answers tend to circle around coverage metrics, not the integrity of the underlying identities. That is a red flag that your identity assets are not keeping up with your identity liabilities.

Recovering from this situation means treating identity as an economy that needs restructuring, not a set of tools that need more tuning. The first step is to decide which systems are allowed to define reality. That usually means choosing one H R system that truly defines your people, one primary directory that reflects those people, one clear device inventory, and a limited set of platforms that manage privileged roles. Anything outside those circles starts life as a liability until proven otherwise. This is not purely a technical move. It is a negotiation between security, Information Technology (I T), H R, and business leadership about who owns which part of the truth.

Once you have those sources of truth, the next step is to rebuild lifecycle discipline around them. When someone joins the company, changes role, or leaves, that event should propagate through identity systems in a way you can explain, observe, and defend. For a cloud-native company, that might mean tight integration between H R, cloud directories, and S A A S provisioning systems that update within minutes. For a regulated financial institution, it might mean replacing manual entitlement spreadsheets with structured workflows and attestations tied to specific roles and responsibilities. Whatever the model, the standard has to be simple: if you cannot follow the lifecycle for a given identity from beginning to end, you cannot claim to fully trust its access.

Restructuring identity also demands sequencing. It is not realistic to clean up every legacy domain, every service account, and every S A A S tenant at once. Leaders have to decide which parts of the environment need the most trustworthy identity in the next year or two. That may be high-value privileged roles, cross-domain access paths in hybrid architectures, or the identities behind A I assistants that can see sensitive data. By declaring a few areas where identity integrity is non-negotiable and then following through on that stance, you create islands of real trust. Over time, as more critical systems move into those clean zones, the balance sheet starts to look different.

Leadership behavior is what turns this from an engineering project into a durable change. One helpful mental model is the idea of identity credit limits. Instead of allowing unlimited local administrators, unlimited stand-alone identity stores, or unlimited exceptions to central policies, you set explicit limits aligned with your risk appetite. You might cap the number of privileged accounts in a domain, the number of applications allowed to maintain their own user directories, or the duration of temporary access elevations. When a team wants to go past those limits, they should explain why, in the same way they would justify taking on more financial risk.

Write-offs matter as much as limits. Legacy directories, unidentified service accounts, brittle scripting patterns that hide credentials, and old applications with opaque entitlements are all forms of identity debt. Periodically, leaders need to back structured efforts to write that debt off. That may mean decommissioning a legacy domain, forcing a re-onboarding into a new identity pattern, killing a dangerous integration, or retiring a control overlay that gives a false sense of assurance. Those decisions are rarely painless. They may slow a project, require retraining, or demand budget that was earmarked elsewhere. But they also send a clear signal that the organization is no longer willing to carry invisible identity liabilities indefinitely.

Metrics are the way you tell whether these moves are changing the story. Instead of relying only on control coverage numbers, leaders can ask for a small set of identity health indicators. What percentage of workforce identities are anchored in the authoritative H R source and primary directory. How many privileged roles exist in core domains, and what is their age distribution. How many orphaned or dormant accounts did the organization find and close in the last quarter. What share of critical applications are integrated with centralized identity rather than running their own user stores. The goal is not to create a new compliance industry, but to track whether identity assets are growing and identity liabilities are shrinking.

All of this loops back to the heart of identity bankruptcy. When you lose trust in your own identity data, every control and dashboard built on top of it starts to wobble. You find yourself explaining away inconsistencies instead of preventing them. Threat detection becomes harder. Regulatory conversations become more stressful. Strategic initiatives like cloud consolidation or A I adoption carry an extra layer of risk because you are never quite sure whether access decisions map to the real world. The issue is not that the organization lacks controls; it is that those controls are operating on a compromised picture of who and what should be trusted.

Turning that around is not about a single program or product. It is about adopting an identity balance sheet mindset at the leadership level. When new platforms, mergers, or major projects appear, one of the first questions becomes, “Does this move improve our identity assets or does it add more debt.” When teams propose quick fixes that involve bypassing central identity, the conversation includes the long-term cost to trust, not just the near-term gain in speed. Over time, that shift in framing changes budgets, project plans, and architectural decisions in a way that quietly but steadily reduces your exposure to identity bankruptcy.

A useful next move is straightforward. Ask your teams to sketch their version of the identity balance sheet for your organization or for a critical business area. What do they believe are the real assets. Where do they see the worst debt. Which identity write-offs feel overdue but politically difficult. You are not looking for a perfect inventory; you are listening for whether people have a shared mental model of trust, debt, and solvency in identity. The answers will tell you how close you are to running out of trust—and how ready your organization is to rebuild it on purpose rather than by accident.