If you are developing a simple service that only needs access to an S3 bucket and a DynamoDB table etc. at runtime then it is pretty straightforward to write the explicit allows to the right resources afforded in the 'base' AWS IAM.
Where things usually get tricky is for the CI/CD pipelines and/or the administrative users that need way more access. It is very hard to scope to true least privilege - including for things like lots of ECS/Fargate where you don't want people to mess with each other's Task Definitions/Tasks/Services hosted within the same AWS account for one example. The various AWS services are very hit-and-miss for how well you can scope resources and what conditions they offer you.
Security will say "no resource star" which is a best practice but quite difficult to get right in most larger accounts. Permission Boundaries help in being able to flip the conversation to "lets list all the things these users/pipelines shouldn't be able to do instead of what they should to then constrain the more wildcard-y/star-y IAM policy we need." But even those are getting harder these days because there is soo much you don't want your average operator/admin to be able to do too.
Usually people throw up their hands and over-provision generally or give each team their own AWS account and overly permissive access within it - but ring-fenced to their own stuff at least as a risk trade-off. Though I think the pendulum may be swinging back from a bazillion AWS accounts (with all those problems) back to trying to solve the IAM problem with additional new tools (CIEMs etc) that will help them to manage IAM as-a-service with a pretty UI or by letting you scope down users/roles to only the activity they have done within the last 7 days etc.
There is a great line that "complexity isn't created or destroyed - it is just made somebody else's problem" - do you want to make these an AWS IAM problem or an AWS account-management problem? A pipeline/automation problem or a heavily-staffed security team who can write great IAM policies/PBs/SCPs problem? A SaaS vendor we can procure a CIEM from problem? etc.
Where things usually get tricky is for the CI/CD pipelines and/or the administrative users that need way more access. It is very hard to scope to true least privilege - including for things like lots of ECS/Fargate where you don't want people to mess with each other's Task Definitions/Tasks/Services hosted within the same AWS account for one example. The various AWS services are very hit-and-miss for how well you can scope resources and what conditions they offer you.
Security will say "no resource star" which is a best practice but quite difficult to get right in most larger accounts. Permission Boundaries help in being able to flip the conversation to "lets list all the things these users/pipelines shouldn't be able to do instead of what they should to then constrain the more wildcard-y/star-y IAM policy we need." But even those are getting harder these days because there is soo much you don't want your average operator/admin to be able to do too.
Usually people throw up their hands and over-provision generally or give each team their own AWS account and overly permissive access within it - but ring-fenced to their own stuff at least as a risk trade-off. Though I think the pendulum may be swinging back from a bazillion AWS accounts (with all those problems) back to trying to solve the IAM problem with additional new tools (CIEMs etc) that will help them to manage IAM as-a-service with a pretty UI or by letting you scope down users/roles to only the activity they have done within the last 7 days etc.
There is a great line that "complexity isn't created or destroyed - it is just made somebody else's problem" - do you want to make these an AWS IAM problem or an AWS account-management problem? A pipeline/automation problem or a heavily-staffed security team who can write great IAM policies/PBs/SCPs problem? A SaaS vendor we can procure a CIEM from problem? etc.