Identity management refers to the administration of individual identities within a system or enterprise to increase security while decreasing costs. It has become more important as interactions have increasingly moved online, where it can be difficult to verify an individual's identity. Effective identity management involves multi-factor authentication using multiple pieces of information only known to the user, such as passwords, physical tokens, and biometric data, to reliably verify their identity. Proper identity management provides benefits like reducing fraud, improving customer service, and enabling more convenient account access.