What is password management? Definition, Importance & Best practices

As the IT landscape expands, passwords proliferate, and as more passwords need to be protected, a centralized password management routine becomes crucial. Passwords act as the first line of defense for sensitive information and can spell doom when mismanaged or compromised, so they are naturally one of a hacker's prime targets.

Types of password management

Password management can be broadly classified as "personal" and "enterprise". Personal password management is individual-specific, and involves a set of security best practices to protect a user's personal information such as email accounts, credit card numbers, Social Security numbers, banking accounts, contact addresses, phone numbers, and location.

Enterprise password management, also known as privileged password management, is an integral part of any organization's IT security management and protects the credentials of corporate accounts that hold elevated access privileges. This practice utilizes a centralized, safe repository with strong vaulting provisions to store accounts for local administrators and domain administrators, as well as root, service, application, and system accounts.

The importance of privileged password management

While password management in all forms is equally important, secure management of privileged account passwords has been gaining prominence recently due to an increased number of organizations falling prey to cyberattacks, owing to poor password protection. A compromised password is the easiest way for a hacker to gain administrative access to critical information systems and exfiltrate business-sensitive data. Hackers are always on the lookout for static and weak privileged passwords that allow them to pass through an enterprise network undetected.

Methods hackers use to steal privileged passwords

Phishing emails are one of the most common methods hackers use to steal admin login credentials. These email scams are very popular among hackers despite continuous warnings from security experts. According to the Verizon 2022 Data Breach Investigation Report, "82% of security breaches involve human elements, including social attacks, errors and misuse." This lets hackers easily deploy keylogging malware on workstations to capture all credentials used on that particular system. Similar methods include login spoofing, shoulder surfing attacks, brute-force attacks, and password sniffing.

Compromise of even a single privileged account password via these attacks can provide hackers with unrestricted access to an organization's IT infrastructure and lead to irrevocable losses. To handle such attacks, organizations should focus on devising a judicious approach towards privileged password storage, protection, management, and monitoring.

Password management in cybersecurity

Exhibiting a strong security posture requires sustained efforts from the organization. It calls for strengthening the fundamentals that are gateways to the critical assets. These points emphasize the importance of password managers in enterprise workflows to help establish a strict password hygiene and ensure the system resiliency.

Provides centralized, secure access to data

By deploying a password manager, critical accounts and credentials across the enterprise are periodically discovered and consolidated under the same roof. This provides one-click access to target machines and applications without requiring that passwords be manually entered. This paves the way to centralized management of sensitive information.

Eliminates the need for manually managing passwords

The conventional method of handling passwords in spreadsheets and monitoring individual accounts for vulnerabilities is a daunting task. Sharing spreadsheets with any non-administrative user can allow malicious insiders to penetrate the enterprise environment easily. But vaulting credentials is an impactful cybersecurity approach that enables single sign-on users access to enterprise resources and applications. With password managers in place, remembering unique passwords is no longer a hassle.

Aids in effective governance of critical passwords

Enforcing stringent password policies ensures cyber hygiene and secures critical enterprise data. Since passwords can be an avenue for entry into a network as well as a source of income for hackers, it is ideal to establish a reset schedule, preferably every 60-90 days. Password managers today come with built-in password generators that enable users to create strong, complex, and random passwords based on preset password policies. These practices remove password fatigue and secure sensitive data from an array of risks.

Enables granting granular access

IT teams should grant and revoke access to its critical resources based on the merits of requester's needs. This access provisioning aligns with the principle of least privilege (POLP), such as in these scenarios:

Database admins requiring access to base distribution numbers to run some queries and authenticate users within directories.
Developers needing access to servers to test run their applications.
Third-party users and contractors needing access to internal portals and applications.

Based on who the users claim to be, password managers allow restricted, role-based access and eliminate standing privileges when employees leave. This allows administrators to eliminate the risks posed by these privileges, and remove excessive permissions instantaneously.

Facilitates secure password sharing among teams

Collaborative tasks, like working on shared documents or multi-user applications, mandate passwords be shared among teams. During such instances, a password manager enables secure sharing without actually revealing the credentials. The user can then easily monitor the safe sharing of passwords to prevent incidents in the future, even when an automated password reset is triggered.

Best practices to secure the privileged passwords in your IT ecosystem

Create an inventory of all critical administrative accounts that hold elevated privileges or provide administrative access to workstations, and store them in a secure location. Ensure the accounts are encrypted while at rest with strong algorithms such as AES-256.
Protect and manage privileged accounts with strong password policies, regular password resets, and selective password sharing based on the POLP.
Control the retrieval of privileged credentials by implementing granular restrictions for any user who requires administrative access to any IT resource.
Mandate an IT head's approval for every password access request. Make the workflow stronger with a dual control mechanism by necessitating at least two higher IT officials to supervise and approve such requests.
Allow retrieval of passwords only for genuine users who have passed through multiple stages of authentication, thereby associating every password-related activity with a valid user profile.
Moderate password usage for third-party vendors and contractors who access internal systems on a regular basis for business purposes, i.e. ensure the accounts provided to them only hold limited privileges as required for their jobs.

When it comes to securing critical enterprise data, using passwords is at the top of the list of authentication methods that include biometrics, certificates, keys, and tokens. While passwords are intrinsically preferred due to their binary nature, they are prone to misuse and risks. What helps organizations is investing in password managers that provide a centralized console for business password management, govern user activities, and stay vigilant 24/7 against cyberattacks.

What is password management?