Federated Identity Management (FIM) is a system that enables users to access multiple systems and applications with a single set of credentials. It establishes trust relationships between identity providers and service providers, allowing seamless authentication and authorization across various platforms. FIM enhances user experience by simplifying access management and reducing the need for multiple logins. It ensures security through standardized protocols like Security Assertion Markup Language (SAML) or OAuth, facilitating secure identity federation across interconnected systems.