Patrons in Alma can be set to "Internal" or "External". For internal patrons, Alma handles user authentication, storing passwords for these users internally to Alma. For external patrons, authentication is handled by that institution's authentication system, so all passwords are stored external to Alma.
Note that Primo uses Alma to figure out how to authenticate patrons. So there are typically two login choices, one for external, and one for internal. For example, in the screenshot below, the top link is for external patrons, and the bottom link is for internal patrons. For most institutions, Students/Staff/Faculty are set up to use external authentication, and expected to use campus logins, and community borrowers are set up to use internal authentication, expected to use internal Alma logins: