Password Managers For Business: Everything You Need To Know (FAQs)
What Is A Password Manager For Business?
A business password management solution, or enterprise password manager, is a security tool that helps end users to store their business credentials more securely. The core feature of these solutions is a secure, encrypted password vault, in which users can store account credentials—including usernames and passwords—, one-time-security codes related to accounts, credit card information, and notes. These solutions are commonly delivered as cloud-based, SaaS subscription services, paid monthly or annually. They are delivered as web applications, or desktop/mobile apps.
Users access the secure vault using a master password, which (according to admin policies) may need to be a certain length and complexity to improve security. Some password managers have also announced support for FIDO Passkeys, enabling passwordless access to the vault. Within the password vault, admins can log all of their workforce passwords, which can be sorted into folders and groups, and any passwords that have been shared with them. This should be reinforced with multi-factor authentication.
Using a browser plugin, desktop, or mobile application, passwords are automatically entered into web forms when a user needs to log into an account. When a user creates a new account, the service automatically generates a secure password and stores this in the password vault. This means the user experience is simple and straightforward. Within the vault, users should be able to easily add, edit, remove, and share passwords securely with their team, and view if passwords have been re-used or need to be updated.
For admins, password managers enable password policy enforcement, management of secure passwords and teams, reporting into password health, and access controls, with the ability to share and revoke account access.
What Are The Benefits Of Password Managers For Business?
There are multiple benefits to implementing a password manager for your business:
Create Stronger Passwords
For a lot of people, your employees included, crafting complex passwords for every account they have is just not going to happen. Passwords are easy to forget as it is and, if we increase the length and complexity of each one, that just adds to the struggle of keeping our many passwords straight.
With the password-cracking software available today, the strength of our passwords matters more than ever. Individuals may use passwords of varying strength to secure their various accounts depending on how valuable or targeted they believe those accounts may be, and if businesses wish to demand the extra effort of strong, complex, and unique passwords for every application, they should be supplying employees with the tools to facilitate this—like a password manager.
Stop Password Reuse
Considering the sheer volume of passwords employees are juggling in their personal and professional lives, it should come as no surprise many choose to reuse passwords. And even those who make an effort not to reuse the exact same password across several accounts often partially recycle passwords with slight alterations (for example, PoppyHolly123 becomes HollyPoppy321) to help them remember.
But password reuse is a dangerous practice, as the compromise of just one password can open the floodgates for intruders to access multiple services and get their hands on a range of sensitive data.
With complex and strong passwords being so important and yet so difficult to remember, it makes sense to invest in a password manager to remove the need to memorize multiple passwords, negating the issue of password reuse by storing passwords in a secure and readily available environment.
Save Time And Resources
Account resets and the retrieval of passwords that people have forgotten are tasks frequently carried out by IT departments. On a daily basis, IT teams spend time assisting employees who have been locked out of their accounts and applications due to forgetting their password after frequent changes, or because it they were told to make sure it was long and complex—which made it difficult to remember—or because they misplaced the post-it they wrote it down on (don’t do this!).
Password retrieval can eat up a lot of time and IT resources, and this time wasted could be put to better use by both employees and IT teams. A password manager is a convenient and easy way to avoid this daily hassle altogether.
Prevent Brute Force Attacks
Passwords, particularly those in an organizational setting, are frequently targeted and can easily be compromised by outsiders and other employees. Some of the most frequent causes of hacking are the sharing of credentials over unsecured systems, brute force attacks (a hacking method where attackers try multiple usernames and passwords, often using a computer to quickly test various combinations until they find one that works), and careless or malicious insiders. Hackers are also constantly devising new and increasingly sophisticated methods of attack to maliciously access login credentials.
With a password manager in place, users can store their login credentials in an encrypted vault that hackers will be far less likely to manage to access—particularly if it’s also protected by MFA. Some password managers also generate strong, unique passwords for users; these passwords don’t need to include words or numbers that are familiar to the user to be memorable, so they are less likely to be breached and help significantly reduce the likelihood of a hacker succeeding.
Protect Against Phishing Attacks
Phishing attacks are one of the most common and effective methods employed by cyber criminals to steal login credentials. Phishing emails are emails that appear to come from legitimate sources or services and exploit this impression either by directly asking the user to send them credentials, or by redirecting recipients to bogus login screens designed to harvest their passwords. Phishing attacks rely on human fallibility—that’s what makes them so successful and so difficult to avoid—which is what makes some password managers so useful in preventing these types of attacks from succeeding. Certain corporate password managers will not serve up the passwords—and may even prevent the end user from being able to see, copy, or paste in passwords—if the domain name does not match the records.
Using MFA in conjunction with the password manager tool is something we highly recommend, as it creates a more comprehensive protection for your important accounts. You can check out some of the best solutions on the market in our guide to The Top 11 Multi-Factor Authentication (MFA) Solutions For Business.
What Features Should You Look For In A Password Manager For Business?
Business password managers are designed to make it as easy as possible for employees to securely store, retrieve, manage, and secure business passwords, as well as enable admins to enforce secure password policies and manage password sharing. To that end, there are a number of important features to consider when selecting a password manager tool for business, including:
- A user-friendly password vault
- Secure password sharing functionality, with shared passwords hidden
- Browser plug-in for automatic password collection and password auto-fill
- Password importing ability
- Reporting of weak and re-used passwords
- Notification when passwords have appeared in a data breach
- Secure password generator when creating new accounts
- Password groups and folders
- Admin policies and reporting
- MFA & SSO for account access
Ultimately, the choice of which password manager to choose will be down to your individual business requirements and use cases, but market-leading solutions will include the above key features.
Cloud Vs. On-Premises Password Managers: What’s The Difference?
Password managers can be deployed in two ways: as a cloud-based SaaS solution which users access via web applications or a web browser; or as an application installed on end user devices. Typically, features are very similar between the two. Both offer a secure password vault for end users to access passwords. The main difference is simply in how they are deployed and managed. On-prem password managers need to be installed on each device, while cloud-based services can be accessed by any device that can log into the online password management service.
Benefits of on-prem password management include the fact that all passwords are held on the local device, giving businesses more control over their data. Despite many top password managers having extremely tight security policies, there have been instances of password management providers being affected by data breaches. An on-prem solution also reduces the likelihood that your passwords will be affected if the password management company itself suffers a data breach. However, the flip side of this is that the on-prem password manager is only as strong as your internal security policies—if you suffer a breach, the locally stored passwords could be affected.
Cloud-based password managers are sold under a subscription model, billed monthly or annually per user. This reduces the upfront cost of implementing the solution because it means you don’t need any additional hardware; user accounts can be quickly provisioned by leveraging your existing user directory system (e.g., Microsoft Azure AD), and admins can manage user identities, configure policies, and view reports within a cloud-based admin portal. With cloud-based password managers, the provider is responsible for maintaining the solution, making them easier and often more cost-effective to manage in the long term. However, your data could be at risk if the password management provider suffers a breach.
Can Password Managers For Business Be Breached?
Unfortunately, no security tool is 100% secure. Password managers keep all of your passwords in one place, and if you don’t have robust multi-factor authentication place for your password manager, it’s possible the secure password vault could be compromised.
With that said, password managers are highly recommended by security experts. All of the password managers on this list offer secure password vaults and, with MFA switched on, it is very difficult to compromise passwords stored in a password manager. Many services store passwords locally (with backups available) so that there is no way for an attacker to compromise passwords without gaining access to your device.
However, it is important to consider each password manager’s security policies. There have been instances in which password manager providers themselves have been affected by data breaches. Fortunately, when vault data is encrypted, the information is unreadable. Even if attackers compromise the vault itself, the odds of them being able to successfully decrypt the data are slim.
Can You Securely Share Passwords Using A Password Manager?
Secure password sharing is one of the best benefits of implementing a password manager. There are several ways that password managers approach this feature and admin policies can affect this too. Generally, users will be able to share select account usernames and passwords with other colleagues, or within groups and folders shared with multiple team members.
The benefit of sharing a password in a password manager is that the password itself can be hidden. When users with access to the shared password need to log into the account, the password can be automatically filled to authenticate access, without them needing to know the password at all.
When a team member leaves, access to the password can then be automatically revoked. This means you can be confident only authorized users can access shared resources, thereby reducing the risk of data loss or breach caused by poor password sharing policies.
What Happens If A User Forgets Their Master Password?
The master password is needed for each users to log into their password vault. Many organizations will mandate this to be a certain level of length or complexity – this can mean users will sometimes forget or misplace their master password. In this instance, remediation usually depends on company policies or the password management platform’s policies. Access can normally be reset by the user themselves using a secondary form of authentication, or by account admins.
Many password managers are moving to support FIDO Passkeys, which replaces the use of the master password with passwordless authentication. Using Passkeys, authentication is completed with a private key held on the local device, then matched with a public key registered the password manager. There is no need for the local end user to ever have an account password. Combined with an extra verification step leveraging biometric controls, or a physical hardware token, this offers powerful security benefits and means the password cannot be forgotten or phished.