Azure Key Vault provides a way to store credentials and other secrets with increased security.
But your code needs to authenticate to Key Vault to retrieve them. Managed identities for Azure resources help to solve this problem by giving Azure services an automatically managed identity in Azure Active Directory (Azure AD). You can use this identity to authenticate to any service that supports Azure AD authentication, including Key Vault, without having to display credentials in your code.
Reference:
https://docs.microsoft.com/en-us/azure/key-vault/general/tutorial-net-create-vault-azure-web-app