It identifies member and group (7)
I believe the answer is:
armband
'it' is the definition.
The definition suggests a singular noun which matches the answer.
'member and group' is the wordplay.
'member' becomes 'arm' (member can mean a limb).
'and' is a charade indicator (letters next to each other).
'group' becomes 'band' (band can mean a group of people).
'arm'+'band'='ARMBAND'
'identifies' is the link.
Can you help me to learn more?
(Other definitions for armband that I've seen before include "Swimming aid" , "Worn by football captain or mourner" , "It signals captain" , "augmentation to uniform" , "Something worn around sleeve" .)