What Is Password Management? Definition, Components, and Best Practices

Password management is defined as a system that facilitates a simple, secure way to store passwords and access them quickly when required. Today, password management is a critical part of the IT policy of most organizations. Password management solutions ensure robust cybersecurity as well as convenience for home and enterprise users alike.

While convenience is the primary allure of password management for personal users or small enterprises, large corporations prefer these solutions for a different reason—protecting sensitive information from unscrupulous elements in an environment where traditional password management methods would be too difficult to enforce. This article explains the basics of password management and shares some best practices.

Table of Contents

• • What Is Password Management?
  • Importance of Password Management for Enterprise Security
  • Top 10 Best Practices for Password Management in 2021

What Is Password Management?

Password management is a system that facilitates a simple, secure way to store passwords and access them quickly when required. 

Today’s digitalized corporate space relies heavily on passwords for every service, whether it’s something as simple as marking daily attendance or as sensitive as accessing clients’ unmasked financial details. However, even the most powerful executive is only human, and it’s only a matter of time before remembering numerous passwords for various corporate portals becomes impossible. 

Things get even more difficult on the personal front. An average user has different passwords for their email, online shopping, internet banking, social media channels, and several other digital services. According to a 2020 research study by NordPass, the average person has a hundred passwords to remember.

Password management is the one-stop solution for this modern problem. With a password manager, users can manage all their passwords—personal and professional—from one centralized location. A password manager does more than simply remember your passwords. It helps you choose adequately complicated passwords, ensures timely password rotation, and enforces several cybersecurity best practices.

Traditional password management methods are no longer feasible, especially in 2021, when remote work has become the norm and losing a password could mean being completely locked out of the office infrastructure. Storing passwords, whether physically or digitally, where family members or friends can access them, is another security risk but a commonplace practice, especially among employees with low technical hygiene. 

Finally, increasingly sophisticated phishing tactics that target work-from-home employees have emerged, forcing companies to modernize the management of employee systems and passwords.

Also Read: 10 Best Password Managers for 2021

Importance of Password Management for Enterprise Security

According to the International Telecommunications Union, over half the world has access to the internet today. That means many passwords are floating out there, and the global population is collectively managing anywhere between ten billion and a hundred billion passwords. This provides cybercriminals many opportunities to target. The damage caused by cybercrime is estimated to hit $6 trillion annually in 2021.

Enterprise password security is always slightly more complicated than personal password security for many reasons, such as the presence of thousands of terabytes of sensitive information, the need for multiple people to access the same account, and regulatory oversight, to name a few.

With most enterprises having shifted to a remote work environment in 2021, the lack of a robust company-wide password management policy is an invitation for cybercriminals to wreak havoc and steal valuable information. Infiltrators have already begun seeing employees working from home as soft targets and are tricking them into revealing company passwords— from entry-level associates to senior executives. This solidifies the need for streamlined password management.

Take the case of shared access. Any major organization with an online presence has at least a small team managing its social media accounts, which often translates to multiple people accessing the same account using precisely the same credentials. Other accounts that often have the same credentials for different people include HR systems, vendor databases, and IT control panels. Shared credentials often pose a risk to security and accountability. Shared account password management enables enterprises to monitor shared credentials and reduce related risks effectively.

As an organization grows, password management becomes more complex, with passwords and accounts of employees needing to be managed across time zones and job profiles. Often, larger organizations do not opt for standalone password managers. Instead, they choose privileged account management solutions that help them address numerous cybersecurity challenges simultaneously.

Corporations need to enforce best practices for password management for thousands of employees who, in 2021, are using multiple devices remotely. These devices may have risky third-party software installed on them or may be using an insecure internet connection. Moreover, not every employee practices complete digital hygiene at all times. This means that large enterprises need a combination of easy-to-use software and robust training to preserve the integrity of their systems.

However, ease of use is not the only criterion that needs to be considered. An enterprise-grade password management solution must also be full-featured enough to fulfill organizational needs and achieve cybersecurity goals. Must-have features in any enterprise password management solution include 

• • A secure password vault
  • Password management on employee endpoints
  • Access control for employee devices
  • Automatic password management that maximizes security and saves time
  • Report building tools
  • Option to record, monitor, and terminate employee access to passwords as required

The two most popular types of password management solutions that organizations globally use to streamline the protection of their passwords and accounts are privileged account management and application control software. Privileged account management comes with a heavily encrypted password vault, helps IT teams easily manage access at every stage of the employee lifecycle, and is available in on-premise and cloud options. 

Application control software allows IT personnel to remotely control admin rights on employee devices and decide which applications run with administrator privileges, whether the user is an administrator or not, thus helping remove admin rights from devices and software that do not require them. With application control software, employees may also seek permission to run an application as an administrator to reduce the number of helpdesk calls and remote desktop takeovers.

Finally, employee education is critical, especially in today’s remote corporate environment. All employees must be trained in online hygiene, cybersecurity best practices, and secure password management. Even the most advanced password management solution and the strictest company policies cannot help an organization whose workforce lacks a basic understanding of these topics.

Also Read: What Is Biometric Authentication? Definition, Benefits, and Tools

Top 10 Best Practices for Password Management in 2021

The COVID-19 pandemic drove a majority of the world’s corporations to explore work-from-home options. With this came many cybersecurity loopholes, many of which have been discussed in the paragraphs above. 

Password Management Best Practices

As 2021 rolls along, more and more employees—whether remote or onsite—are being asked to adopt and begin using password management solutions by their employers as the latter realize that even a single breach of their networks could tear apart the entire company. 

Listed below are the top ten best practices for password management in 2021.

1. Encourage security over convenience

When employees worked with on-premise office systems, it was easy to enforce cybersecurity best practices such as password rotation. However, things are different in 2021. Many employees are using their personal devices to work, and not all organizations have the time or manpower to install monitoring software onto employee devices before remote work commenced.

As a result, organizations are seeing reluctance in the voluntary implementation of best password practices by employees. Even in cases where mandatory password rotation is being implemented successfully, employees choose simple options that aren’t forgotten easily, which also means that these passwords are easy to guess. 

Automated password-cracking tools used by cybercriminals today are capable of quickly cycling through common password patterns, and some can even be modified to try passwords with known information about specific users, such as date of birth. By encouraging security over convenience and training employees on best password practices, corporations can avert a major blow to the integrity of their systems.

2. Counter phishing attacks

Phishing attacks are the single biggest threat facing corporations in 2021, with thousands of employees at risk of falling victim to the theft of their login credentials. Phishing emails are becoming increasingly common in today’s remote work environment. 

These emails seem to come from a legitimate source (such as the company’s HR department or someone in the management team) but direct employees to a fake login screen that is set up only to capture their credentials. While the average user might easily fall prey to a sophisticated phishing attack, a password management solution will not make that mistake.

3. Drive strong passwords

The average employee cannot be bothered to create a unique and sufficiently complex password for each business account they operate, particularly if the password has to be memorized. Corporations constantly ask employees to use strong, secure passwords, but this is impossible to enforce for every employee account on every platform unless a password manager is being used. 

Password manager algorithms create secure passwords automatically, store them securely, and can easily be customized to provide secure passwords that employees do not even need to remember. A good password contains between 12 and 15 characters and consists of a random string of symbols, numbers, and uppercase and lowercase letters.

4. Record password changes

Traditionally, employees (whether in the office or at home) have either been used to remembering passwords or writing them down. This, of course, leads to several cybersecurity risks. However, password management solutions offer help on this front by capturing and recording any change in an online business service’s passwords. 

This has many benefits, including tracking compliance regarding regular password changes, ensuring employees never forget new passwords, and serving as a monitoring tool that prevents ‘lockouts’ or other malicious activities.

5. Remove repeated passwords

Many employees, especially the less tech-savvy ones, use the exact same password everywhere, which is a very dangerous practice in terms of cybersecurity. While this is an understandable practice, it can become difficult for anybody to remember a long list of unique passwords—it can also be catastrophic for network security. 

As outlined above, even a single password being compromised can enable intruders to log into the corporate infrastructure and siphon off data. While this unsafe practice can somewhat be curbed through regular employee awareness sessions and a strict company password policy, using a password manager is simply easier and more effective. 

Password management solutions ensure easy application of strong and unique passwords to every single service, thus controlling the amount of damage caused by compromise. These solutions can even monitor the password usage of individual employees and alert the organization in case of poor password hygiene.

Also Read: Top 11 Facial Recognition Software in 2021

6. Phase out browser-based password management

A very high percentage of corporate employees use a web browser at least once a day. According to StatCounter, Google Chrome holds close to 65 percent of the market share of web browsers. Although Chrome offers an inbuilt password manager, security may not be its prime focus. 

This can easily land passwords into the wrong hands in the event of a breach. Password management solutions come with robust encryption and a security-centric policy, making them a much better option than browser-based password management for enterprises.

7. Address lost passwords

With work-from-home having become commonplace in 2021, employees are being discouraged from storing passwords on paper notes or in unencrypted files. Employees need to use and remember unique passwords for each business platform and, predictably, end up forgetting a few. 

According to Gartner, one in every two helpdesk calls request a password reset at some organizations, while Forrester Research pegs the average cost-per-reset at around $70. With a password manager, these problems (and associated costs) can be a thing of the past.

8. Ensure multi-factor authentication

Today, every major internet service provider offers some form of two-factor authentication (2FA), which is the requirement for a second form of user identification, such as a one-time PIN (OTP) code sent to the user’s phone or the answer to a security question. With 2FA, traditionally vulnerable platforms have been shown to become near-impenetrable. 

While it may be challenging to implement native 2FA functionality in every proprietary business solution, most leading password managers offer several two-factor authentication options, which means that all platforms are protected by an extra layer of security without the company needing to spend an extra cent on reprogramming.

9. Adopt cloud sync

In 2021, the average employee logged into the company infrastructure from more than one device, including desktops, laptops, smartphones, tablets, and alarmingly, even public devices. There is no better way to reliably, conveniently, and securely carry around every business credential from device to device than through the use of a password manager. 

Cutting-edge password management products provide applications for desktop and mobile platforms, as well as platform-agnostic website access.

10. Monitor compliance to detect problems

Any company can draft a leak-proof password policy, but even the world’s best policy is useless if employees ignore it. Using an enterprise password manager, the IT department gains an understanding of the password practices of individual employees, teams, departments, and the entire organization. 

Using these insights, often available in real time and periodic in-depth reports, network administrators can detect and address non-compliant behavior.

Also Read: Top 10 Malware Scanners and Removers in 2020

Takeaway

Today, the cybersecurity of an organization is the responsibility of every stakeholder. While it is possible to train everybody with access to company infrastructure, it is an expensive prospect with very limited and unreliable results. 

A password management software is a turnkey solution that replaces the need for rigorous training and strict enforcement by automating the implementation of password management best practices for enterprises.

Did this article help you understand the basics of password management? Let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We would love to hear from you.