This new feature is beginning to roll out for Office 365 customers starting today (2/17/15).
The self-service password reset allows a user to reset their password should they forget it, using pre-arranged alternate personal information. First, the admin for the tenant must enable the tenant for user password reset (KAMIND IT can help you with this if you need help). Next, each user must configure alternate personal information in the Office 365 portal. To do this, follow these steps:
1. Click the Cog icon (the gear) in the top right of the Office 365 portal window and select Office 365 Settings.
2. Click the Password tab to see what details are used for password reset requests.
3. Click Update them now to be taken to the Me tab.
Once the user configures their alternate personal information, they can reset their password if they forget it by clicking the “Can’t access your account?” link on the Office 365 sign-in page at http://portal.office.com.
The Office 365 tenant administrator will still need to reset the user’s password for them if the alternate personal information is not configured. The user cannot call Microsoft support to get their password reset. Self-service password reset functionality is available for Office 365 users who are cloud-based only and do not require write back of the updated password to an on-premises server. It is also available for all Office 365 administrative accounts. Self-service password reset for an on-premises managed user requires password write back to the on-premises Active Directory. For this an Azure AD Premium or Azure Enterprise Mobility Suite subscription would be required.
In addition to phone and email as options for users to confirm their identity when resetting their password we now also have security questions in public preview.
More details about self-service password reset are here.
Information courtesy of Microsoft and posted with permission