The regulation pushes central identity management because access risk is not limited to one application or one network boundary. Once an attacker gets in, lateral movement can turn any account or app into a stepping stone for more access. A central source of truth, lifecycle controls, and reporting give security teams visibility across identities, devices, and groups throughout the access journey.
Why central identity management becomes the practical answer
23 nycrr 500 is pushing organisations toward one access model because identity risk follows the actor, not the deployment location. If cloud applications, on-premises systems, and remote administration all rely on separate control points, security teams lose the ability to see who can access what, how access was granted, and where privilege has drifted over time.
The core design problem is fragmentation. Disconnected directories, local admin accounts, app-specific credentials, and shared service access create different trust decisions in different places, which makes review and revocation inconsistent. A central identity plane reduces that gap by giving teams a single place to define lifecycle state, enforce least privilege, and reconcile reporting across environments.
This is especially important when access changes over time. Joiner, mover, and leaver events, exception approvals, and privileged access sessions all create moments where a stale entitlement or unmanaged account can outlive its intended use. Central management makes those events visible enough to be governed, audited, and corrected before they become permanent exposure.
How centralisation supports supervision across cloud and on-premises access
Central identity management is not only about convenience. It is what makes cross-environment supervision possible when one person, application, or administrator can touch multiple systems with different native controls. Without that central layer, reporting becomes a merge of partial logs and manual attestations instead of a defensible access inventory.
That matters for access reviews, because the question is not just whether an account exists, but whether the account still needs that level of access across every environment it can reach. A central source of truth can tie identity, role, entitlement, and session activity together so the organisation can answer that question consistently.
The same logic applies to privileged and automated access. The more access paths are distributed, the easier it is for privilege to accumulate in ways that are invisible to local administrators. Strong central governance makes it easier to spot excessive rights, unused accounts, and access paths that were created for an exception but never removed. NHIMG’s Ultimate Guide to NHIs is useful background here because the same lifecycle and visibility problems become more severe when non-human access is added to the mix.
For cloud-heavy environments, that central view also improves comparison across identity types. A user, a service account, an API key, and a workload credential may all be governed differently, but the organisation still needs one reporting chain that shows ownership, scope, and revocation state. That is the practical bridge between policy and operational control.
Practitioner judgment for audit readiness and access control design
What to prioritise: Start by identifying every place where access can be granted outside the central identity process, including local accounts, embedded credentials, and environment-specific admin paths. Those are the weak points that usually defeat a clean reporting story.
What to verify: Confirm that access reviews can be produced from authoritative identity data, not from spreadsheets or one-off exports. If the organisation cannot prove who approved access, when it expires, and whether it has been removed, the control is not yet central enough to satisfy the supervisory intent.
What good looks like: The organisation can trace an access decision from request to approval to enforcement across cloud and on-premises systems, and can remove that access from the same authoritative workflow. That is the point at which reporting becomes operationally meaningful rather than merely documentary.
Practitioner takeaway: The regulatory pressure is really a pressure for coherence, one identity record, one entitlement decision path, and one auditable view of access across the whole estate.
Standards & Framework Alignment
This section maps relevant standards and security frameworks to the operational risks and controls described in this guidance.
CIS Controls v8 and NIST CSF 2.0 set the technical controls, while NIS2 define the regulatory obligations.
| Framework | Control / Reference | Relevance |
|---|---|---|
| CIS Controls v8 | 6 — Access Control Management | Central identity management supports consistent access control and entitlement governance across environments. |
| 5 — Account Management | The question concerns lifecycle control, provisioning, and removal of accounts across cloud and on-premises systems. | |
| Recommendation — Centralise access control decisions and review processes across all environments. Maintain authoritative account lifecycle processes for every environment. | ||
| NIST CSF 2.0 | PR.AC — Access Control | A central identity plane materially improves enforcement and visibility of access decisions. |
| GV.RM — Risk Management Strategy | The question is about reducing cross-environment access risk through stronger governance. | |
| Recommendation — Use access control processes that apply consistently across the enterprise. Define governance that treats identity risk as an enterprise-wide control issue. | ||
| NIS2 | ICT risk management measures | The regulatory theme aligns with cross-environment access governance and supervision requirements. |
| Recommendation — Implement ICT risk controls that keep access decisions centrally visible and auditable. | ||
Related resources from NHI Mgmt Group
- How should organisations implement access governance across cloud and on-premises environments?
- Should organisations prioritise cloud identity governance before expanding privileged access controls across applications?
- Why does policy-as-code matter when organisations manage access across cloud, application, and data layers?
- How should organisations govern access as identity footprints expand across cloud apps and workloads?
Deepen Your Knowledge
Reviewed and updated by the NHIMG editorial team on September 17, 2026.
NHI Mgmt Group — the #1 independent authority on Non-Human Identity, IAM, and Agentic AI security. nhimg.org
