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Privileged Account Management

Privileged account management is a set of security controls and management principles that deal exclusively with the protection of privileged accounts in an enterprise, including those of operating systems, databases, servers, applications, virtual machines, and networking devices.

Last updated date : 25 Sep 2023

Privileged account management is an integral part of IT security planning for today's organizations. This article will help you understand basic concepts about privileged account management, its types and importance, as well as how privileged accounts are commonly targeted by hackers today to gain access to an enterprise network. You will also find a detailed compilation of fundamental privileged account management best practices you can implement to secure administrative access to critical information systems in your network.

What is a privileged account?

Privileged accounts are a form of digital identity used to authenticate users who require elevated access to critical IT assets. The term "privileged account" includes the most powerful user accounts spread across an IT environment, such as the UNIX root, Windows administrator, database administrator, and even business application accounts. These accounts are normally used by information and communications teams to set up IT infrastructure, install new hardware and software, run critical services, and conduct maintenance operations. In short, privileged accounts are master keys that can access an organization's highly classified IT assets, along with the sensitive information stored within them.

Types of privileged accounts

  • 01

    Local/built-in administrator accounts are accounts on member servers and clients that grant absolute control over their hosts. This also includes the default login accounts that come built-in with operating systems, application software, and services. If local administrator passwords are weak, left unchanged, or repeatedly used on multiple accounts across hosts, malicious users could easily gain unauthorized access to workstations. In the worst-case scenario, an attacker with access to a local admin account or a forgotten built-in system account could navigate across the network and even elevate their privileges to that of a domain administrator.

  • 02

    Domain administrator accounts are powerful accounts with the widest range of control over every object in a domain. These accounts provide administrative privileges to all workstations, servers, and domain controllers. Only a few trusted administrators should use the domain administrator accounts. Moreover, they should only use the account to log on to the domain controller systems that are as secure as the domain controllers themselves, especially in a Windows ecosystem.

  • 03

    Administrative service accounts are privileged accounts used by system programs to run application software services or processes. At times, these accounts may possess high or even excessive privileges when a certain dependent service requires it. This also goes for local or domain Windows accounts used to run Scheduled Tasks. Typically, such service account passwords are set to never change due to the difficulty in discovering all dependent services and propagating the password change, which could, in turn, delay business service continuity. However, static service accounts can make your enterprise an easy target for hackers.

  • 04

    Privileged user accounts are user accounts that belong to privileged users who have elevated access to sensitive machines. Privileged user accounts are created based on job function and requirements, and could also be created for third-party contractors and vendors based on need.

  • 05

    Root accounts are superuser accounts that carry administrative privileges to manage Unix/Linux resources, which are typically used by system administrators to perform core IT operations. Root accounts have unrestricted access to all files, programs, and other data on a system, and therefore pose an enormous risk when mismanaged.

  • 06

    Application accounts are used by organizations to automate communication between various applications, web services, and native tools to fulfill business and other transaction requirements. Application credentials are usually embedded in clear text within unencrypted application configuration files and scripts to achieve this business communication interfacing.

    Embedded application accounts are used in many DevOps environments where credential hard-coding is commonly used to expedite software development phases and automate service delivery cycles. Administrators usually find it difficult to identify, change, and manage these passwords; as a result, the credentials are left unchanged, which makes them an easy entry-point for hackers.

Why is it important to protect privileged accounts?

01. More than just passwords

Enterprise password vaults go beyond storing just the passwords of privileged accounts, and extend to consolidating and managing several other sensitive assets, such as web accounts, public and private keys, digital certificates, license keys, digital signature files, documents and executables, and application credentials. The centralized repository is designed to support corporate entities' secure storage, and is encrypted at multiple levels to ensure rock-solid security.

02. Aside from external threat actors, malicious insiders and careless employees pose a serious risk to privileged account security.

In fact, since firms inherently trust their workforce, insider threats are perhaps the biggest peril faced by organizations in terms of privilege misuse and unauthorized actions. Rogue employees are normally those who are underappreciated at work, have been slighted or disrespected, or have joined forces with an external party for monetary gain.

Negligent employees are the other set of insiders whose reckless practices such as open credential sharing with colleagues and leaving password files unattended can eventually lead to cyberattacks and corporate data exposure. It makes matters worse when that careless employee is a system administrator who has too much access and shares that access with others without limitations.

With the majority of the enterprises around the world today riding the digital transformation wave and investing heavily in IT infrastructure expansion, privileged account proliferation is inevitable. As IT environments become overrun with privileged account credentials, it's important to institute a comprehensive privileged account management program to avoid password fatigue among employees, adopt a disciplined approach to privileged account protection, and also mitigate cyberattack risks.

Privileged account management best practices

Components of privileged account management that should be ingrained as part of your privileged account management policy:

  • Discover and maintain a complete list of all active and dormant privileged accounts in your network, and update that list whenever a new IT asset or privileged account is created. This can be done from a central console using a privileged account management software.
  • Store privileged identities like passwords, SSH keys, and SSL certificates in a secure vault using standardized encryption algorithms such as AES-256.
  • Enforce stringent IT policies that cover password complexity, frequency of password resets, strong SSH key pairs generation, time-limited access to privileged accounts, automatic reset upon one-time use, and other robust controls.
  • Share the privileged accounts with employees and third-party users in a secure way, such as granting privileged access with the minimal permissions required to carry out the job.
  • Audit all identity-related operations such as privileged user logins, password shares, password access attempts, reset actions, and so on.
  • Monitor and record all privileged user sessions in real time.
  • Revoke system access privileges for employees who leave the organization by immediately disabling their user account and also propagating a password change for all privileged accounts of IT assets or applications they had access to.

Business benefits of privileged account management

Following are the cybersecurity benefits that robust privileged account management solutions deliver:


    Centralized management

    Take complete control of privileged accounts by storing them in a secure repository with a single access point fortified with multi-factor authentication.


    Reduced risk exposure

    Shrink the attack surface and effectively combat growing risks of external attacks, identity theft, and insider threats.


    Improved incident response

    Establish preventive and detective security controls through approval workflows and real-time alerts on privileged accounts usage.


    Enhanced security and compliance

    Effectively prove compliance with various industry and government regulations like HIPAA, PCI DSS, the GDPR, NERC-CIP, SOX, etc.


    Increased visibility

    Acquire a comprehensive overview of privileged account activity across the network with extensive audit logging and informative reports.


    Cybersecurity automation

    Boost IT productivity by relieving IT teams of time-consuming manual tasks such as bulk password updates through automation schedules.

Privileged account management in different sectors

Although the purpose of privileged accounts fundamentally remains the same across different industries, the context in which they are managed varies for different industries. For example, privileged accounts could be accounts used to access critical medical equipment in the health care sector while serving as a way to provide secure access to key banking servers in the BFSI vertical.

Let's explore how privileged account management helps in different industries:

01. Banking and finance sector

The Banking and Finance industry deals with sensitive servers and databases that have direct access to financial information, transactions, and banking credentials. Therefore, gating access to these servers with privileged accounts ensures secure access, prevents theft, and thwarts data breaches.

02. Healthcare

The increased use of high-tech electronic equipment combined with outdated systems and software, makes the healthcare industry a prime target for cyberattacks. Privileged account management helps by providing secure, authorized access to sensitive data servers that contain patient PII and their medical records, as well as critical medical devices and equipment. Further, privileged account management helps healthcare providers comply with compliance standards like HIPAA and the GDPR.

03. Public sector

Government organizations and agencies across different sectors, handle classified information directly linked to national security. This could be information related to defense, finance, intelligence, personal data of citizens, access to critical infrastructure, and so on. Privileged account management is essential to guard against cyber attacks and to ensure only authorized personnel can access these sensitive servers and data-points.

04. Energy sector

Privileged account management helps provide secure, authorized privileged access to control systems and critical infrastructure in energy grids, oil refineries, water treatment plants, power plants, amongst others. Disruption in industrial processes can not only have a significant financial setback, but even minimal deviation in chemical levels can prove to be catastrophic. Therefore, privileged account management and access control are crucial cogs in the security structure of the energy sector.

Essential capabilities to look for while choosing the right privileged account management software for your organization

Owing to their value, privileged accounts will continue to be a prime target of cybercriminals. For this reason, while searching for potential privileged account management solutions, organizations should look at the process as a long-term cybersecurity investment instead of a stopgap arrangement. When evaluating and appraising solutions to find the perfect privileged account manager for your business, there is a predetermined set of key features that dictates the effectiveness and eventual success of your organization's privileged account protection program.

Following are the capabilities to look for during the selection process.

Feature checklist

Key focus areas to look for in a robust privileged account management software:

  • Centralized credential vault
  • Automated discovery of IT assets and privileged accounts
  • Web-based access with a simple, easy-to-use interface
  • Strong data encryption during transit and at rest
  • Robust user authentication such as Active Directory (AD)/Lightweight Directory Access Protocol (LDAP), RADIUS, SAML, smart card, and more
  • Multi-factor authentication for vault access such as time-based one-time password (TOTP), YubiKey, and Duo Security
  • Fine-grained, role-based access to stored privileged accounts
  • Selective sharing with varying access privileges
  • Approval workflows with dual controls and ticket ID validation for release of privileged credentials
  • Time-limited access to passwords and SSH keys
  • Just-in-time controls
  • Notifications or alerts on credential checkouts and checkins
  • Secure APIs to enable application-to-application communications for automated credential checkouts
  • Periodic credential rotation schedules
  • Wide platform support including legacy systems, cloud services, DevOps tools, business applications, Internet of Things (IoT) devices, and robotic process automation services
  • Prebuilt password/SSH key policies of varying strengths
  • Built-in password and key generator
  • Enforced usage of strong passphrases and keys
  • Extensive audit logging module
  • Interactive, customizable reports on privileged account activity, password compliance, access status, etc.
  • Out-of-the-box (OOTB) regulatory compliance reports for PCI DSS, SOX, NERC CIP, and more
  • Report scheduler
  • OOTB integration capabilities for ticketing systems and security information and event management (SIEM) tools
  • Break glass provisions
  • High availability and failover service for uninterrupted access to privileged accounts of critical systems
  • AI/ML-powered anomaly detector to catch unusual access to privileged accounts at non-business hours

Frequently asked questions

  • What is the difference between PAM and IAM?

    Identity and access management (IAM) is a security framework for identifying, authenticating, and providing access to users. IAM consists of special policies, controls, and solutions to manage identities in an enterprise. IT managers leverage an IAM solution to control access to databases, assets, networks, applications, and resources within their organization. Typically, IAM applies to all users in an organization.

    While privileged access management (PAM) is a subset of IAM that deals only with managing privileged access. PAM mainly pertains to privileged users who have elevated access to sensitive resources, applications, and accounts. PAM focuses on users and accounts that pose a higher security threat and data breach risk by having privileged access. IT admins use a PAM solution to track, audit, and manage privileged users, identities, accounts, and sessions.

  • What is the difference between PAM and PIM?

    Privileged identity management (PIM), is a subset of PAM that deals with essential security controls and policies limited to managing and securing privileged identities, such as service accounts, usernames, passwords, SSH keys, and digital certificates, that provide access to sensitive information.

    PAM has a broader scope that stretches beyond just managing privileged identities. PAM focuses on governing the access levels of users with privileged credentials, and determines which users can access which resources and for how long.