Top SaaS Security Risks and How to Mitigate

Written by Hatice Ozsahan and David Worthington on March 16, 2023

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We all use SaaS tools today, from customer support software to CRM, machine learning, etc. We don’t usually think much about security risks when using SaaS tools until something hits us hard. Security risks in software as a service (SaaS) are some of the most lucrative for cybercriminals, which is why organizations must be especially vigilant when it comes to protecting their data. Per a study by BetterCloud, companies with over 1,000 employees use more than 150 SaaS applications. That’s a whole lot of potential security risks!

This article will outline the top SaaS security risks and provide actionable advice on mitigating them. So let’s dive in and make sure your data is safe and sound!

What is SaaS Security?

SaaS security is the implementation of strategies and protocols by SaaS providers to guarantee the protection, integrity, and accessibility of the data and applications stored in the cloud. It is vital for contemporary businesses that depend on cloud-based software solutions to safeguard sensitive business information and maintain critical applications. SaaS security aims to prevent data breaches, data loss, and unauthorized access to confidential information.

8 SaaS Security Risks to Watch Out For

The most common SaaS security risks are misconfigurations, shadow IT, storage, access management, compliance, retention, disaster recovery, and privacy. Organizations must implement up-to-date security controls to avoid these risks and keep up with the ever-evolving SaaS environment.

1. Misconfigurations

Ensuring the security of SaaS applications is a joint responsibility between the vendors and the organizations using them. This is because most SaaS products have layers of configurations that users must configure according to their security and privacy policies. 

Privacy settings can be a colossal vulnerability for companies if they are misconfigured. For example, over 12 million people use Slack daily, a popular organizational collaboration and communication tool. But even something as simple as:

  • Not configuring MFA
  • Granting overly permissive data access to users

These can quickly roll down to an avalanche of cyber-attacks and data breaches for organizations. 

2. Shadow IT

Shadow IT refers to the use of information technology systems, software, applications, or devices without IT authorization in an organization. Approximately 80% of employees admit to utilizing SaaS applications in their job without seeking authorization from their IT department. Unsanctioned apps in companies lead to various SaaS security risks and failure to meet compliance requirements, as they can be misconfigured and vulnerable to attacks.

To avoid these, you can:

  • Use a SaaS Discovery tool to find out every SaaS tool your employees log in to.
  • Train employees to ask for IT approval before adopting a SaaS app.

3. Storage

If you use SaaS tools, you consent to entrust your sensitive data to third-party vendors. Storage can be a security risk because it involves storing sensitive data on servers that are owned and managed by a third-party vendor rather than on-premises servers owned and managed by the organization itself.

This can potentially expose the organization’s data to unauthorized access, data breaches, or other security threats, particularly if the vendor does not have robust security measures in place. In addition, since data is stored in the cloud, it may be subject to data loss or corruption due to various factors such as network connectivity issues, hardware failure, or natural disasters.

Therefore, it is vital for organizations to carefully evaluate the security features and practices of any SaaS storage provider before entrusting them with their data. SaaS users can ask questions such as the following to cross-check data security and avoid this SaaS security risk.

  • Does data storage rely on a trustworthy cloud service provider such as AWS, or is it stored in a privately owned data center?
  • Is data encryption provided as a security solution throughout all stages of data storage?

4. Access Management

Access management can be a SaaS security risk for companies because it involves controlling and managing access to sensitive data and applications by employees, customers, partners, or other stakeholders, all with different roles, responsibilities, and privileges. If access management is not properly implemented, it can lead to the following: 

  • Unauthorized access
  • Data breaches and other security threats

For example, if a user’s account is compromised or if their access rights are not properly revoked when they leave the organization, attackers can gain unauthorized access to sensitive data and systems.An Identity Provider (IdP) can automate group memberships to protect against unauthorized access while increasing IT efficiency.

Additionally, if access management policies are not up to date, there may be gaps in security coverage that attackers can exploit. Look for:

Furthermore, some SaaS providers, or a legacy solution like Active Directory, may not offer sufficient access management capabilities or may not adhere to industry standards and best practices, which could result in a higher risk of unauthorized access or data leakage.  It’s essential for companies to carefully evaluate the access management features and practices of any SaaS provider they use and ensure that they have proper controls in place to mitigate potential security risks.

5. Compliance

Regulatory compliance can be a SaaS security risk if the SaaS provider does not comply with industry-specific regulations. This can result in legal penalties, financial loss, and damage to the company’s reputation. Some SaaS providers may not offer the necessary compliance features or may not have proper controls to ensure compliance, increasing the risk of data breaches or loss.

For example, suppose a healthcare provider uses a SaaS provider that does not comply with the Health Insurance Portability and Accountability Act (HIPAA) regulations. In that case, it can result in fines, lawsuits, and loss of patient trust. Similarly, if a financial institution uses a SaaS provider that does not comply with the Payment Card Industry Data Security Standard (PCI DSS) requirements, it can result in the loss of customer data and financial loss.

Therefore, it is crucial for companies to carefully evaluate the regulatory compliance features and practices of any SaaS provider they use and ensure that they have proper controls in place to mitigate potential security risks.

6. Retention

Retention, or the practice of keeping data for a certain period, can be a SaaS security risk for companies because it involves storing and managing large amounts of data that may be sensitive or confidential. If retention policies are not properly implemented or enforced, it can lead to unauthorized access, data breaches, and other security threats.

For example, if a company retains customer data for longer than necessary, it can increase the risk of exposure to data breaches or cyber-attacks. Additionally, the company may be subject to legal and financial penalties if retention policies do not align with legal and regulatory requirements.

Furthermore, some SaaS providers may not offer sufficient retention policies or adhere to industry standards, which can increase the risk of data loss or unauthorized access.

  • To mitigate security risks, companies should carefully evaluate their SaaS provider’s retention policies and practices.
  • Proper controls should be in place to ensure that retention policies are properly implemented and enforced.
  • Companies may need to implement data backup and recovery procedures to ensure data is not lost.
  • Enforcing data deletion policies can reduce the amount of sensitive data retained unnecessarily.
  • Regularly reviewing and updating retention policies can help ensure compliance with legal and regulatory requirements.

7. Disaster recovery

Disaster recovery, or the process of restoring data and systems after a disaster or outage, can be a SaaS security risk for companies because it involves storing sensitive and critical data with a third-party SaaS provider. If the SaaS provider does not have proper disaster recovery plans and controls in place, it can lead to data loss, extended downtime, and other security risks.

Here are some examples of how disaster recovery can be a SaaS security risk:

  • If a natural disaster or cyber attack affects the SaaS provider’s data centers, it can result in prolonged downtime and data loss, which can have significant financial and operational consequences for the company.
  • If the SaaS provider does not have proper backup and recovery procedures, data may not be fully recoverable after a disaster, which can lead to permanent data loss.
  • If the SaaS provider does not have proper access controls or encryption in place, it can lead to unauthorized access to sensitive data during disaster recovery.

To mitigate these risks, companies should carefully evaluate the disaster recovery plans and controls of any SaaS provider they use and have their own disaster recovery plans in place as well.

8. Privacy

Privacy can be a SaaS security risk for companies because SaaS providers often store and process large amounts of sensitive data, including personal information about customers, employees, and partners. If this data is not properly protected, it can lead to data breaches, unauthorized access, and other privacy violations.

Privacy can become a SaaS security risk if the SaaS provider does not:

  • Have proper access controls in place, it can lead to unauthorized access to sensitive data, which can result in identity theft, fraud, and other privacy violations.
  • Have proper encryption or other security measures, it can lead to data breaches, where sensitive data is stolen or compromised.
  • Have proper data retention or deletion policies, it can lead to the unnecessary storage of sensitive data, increasing the risk of privacy violations.

To mitigate these risks, companies should carefully evaluate the privacy and security controls of any SaaS provider they use. This may involve ensuring that the provider has proper access controls and encryption in place, reviewing the provider’s privacy policies and practices, and evaluating the provider’s data retention and deletion policies.

Companies should also have their own privacy policies and procedures in place to ensure that they are protecting sensitive data and complying with relevant laws and regulations.

SaaS configurations, including identity and access management (IAM) controls and privacy settings, should be regularly monitored to ensure continuous compliance. A cyber asset security platform l can help you monitor your cloud and SaaS misconfigurations and vulnerabilities in real time.

How SaaS Security Can Affect Your Business

SaaS security is a critical aspect of running a successful business. Failure to adequately secure your SaaS environment can have significant consequences that can negatively impact your business in several ways:

Data Breaches

SaaS applications often store sensitive data such as customer information, financial data, and trade secrets in the cloud. If this data is not properly secured, it can be accessed by unauthorized parties through the internet. For example, a hacker may use a phishing attack to trick employees into revealing their login credentials for a SaaS application, giving them access to sensitive data stored in that application.

Malware Attacks

Malware can be introduced to SaaS applications through unsecured network connections, unpatched software vulnerabilities, or other means. For example, an employee may unknowingly download a malicious attachment from an email, which then installs malware on their device and spreads it to other devices on the network. Once the malware reaches a SaaS application, it can be used to steal data or carry out unauthorized actions.

Phishing Attacks

Phishing attacks are often used to target SaaS applications because they rely on user credentials to access data. For example, a hacker may send a fraudulent email to an employee that appears to be from a SaaS provider, asking them to enter their login credentials. Once the hacker has these credentials, they can gain access to the SaaS application and any data stored within it.

DDoS Attacks

SaaS applications are vulnerable to DDoS attacks because they rely on the internet to function. Attackers can flood a SaaS application with traffic from multiple devices, overwhelming its servers and making it unavailable to users. This can disrupt business operations and result in lost productivity and revenue.

Insider Threats

Insider threats can occur when employees have access to sensitive data stored in SaaS applications. For example, an employee may intentionally leak sensitive information to a competitor or inadvertently download malware onto the company’s network, which then spreads to a SaaS application and compromises its security. Companies need to have proper security measures in place to prevent these types of incidents from occurring.

How to Mitigate SaaS Security Risks

SaaS (Software as a Service) security risks can be mitigated by implementing a comprehensive security strategy focusing on the following.

Choose a Reputable SaaS Provider

Make sure the SaaS provider you choose has a good reputation and strong security measures. Research the provider’s security policies, procedures, and certifications before deciding.

Leverage SaaS Discovery

Cyber security’s cornerstone is, in fact, as simple as “knowing.” To mitigate SaaS security issues, organizations should know which SaaS tools employees use and how secure their usage is. SaaS Discovery allows companies to detect employee SaaS logins and SaaS security issues without manual work on IT teams.

Implement Strong Access Controls

Implementing strong access controls is a crucial aspect of SaaS security risk mitigation. Access controls are mechanisms that limit access to resources, including SaaS applications, to authorized users only. Some ways to implement strong access controls in your SaaS environment can include:

  • Multi-factor authentication (MFA)
  • Phishing-resistant credentials
  • Role-based access controls (RBAC)
  • Password policies
  • Session timeouts

Use Encryption

Using encryption is an essential component of SaaS security risk mitigation. Encryption is converting data into a format authorized parties can only read with the correct decryption key. Encryption can be used to protect sensitive data stored in a SaaS application and during transmission between the application and users. Here are some ways to use encryption to protect sensitive data in your SaaS environment:

  • Data at rest encryption
  • Data in transit encryption
  • Secure Sockets Layer (SSL)/Transport Layer Security (TLS)
  • End-to-end encryption

Regularly Monitor and Audit User Activities

Regularly monitoring and auditing user activities is critical to SaaS security risk mitigation. Monitoring and auditing user activities help detect and prevent unauthorized access attempts, suspicious behavior, or data exfiltration. 

Train Employees on Security Best Practices

Train your employees on security best practices, such as strong password management, phishing awareness, and safe browsing habits, to prevent human error and minimize security incidents.

Secure Access to Every Resource with JumpCloud 

It’seasy to see the vast array of cloud-based software as a Service (SaaS) and hear about their countless benefits. However, this convenience and flexibility are accompanied by risks that must be carefully mitigated and assessed. The best way to prevent a breach is to be aware of the risks and take steps to protect your data and your business. The more security you have, the less likely any data breaches are to happen in the first place.

JumpCloud’s open directory platform provides customers with a modern cloud-based IAM solution. It provides workflows and synchronization to thousands of applications, HRIS systems, network resources, and cloud infrastructure, regardless of where users work. Cross-OS device management is a critical component to control and protect modern IT infrastructures. JumpCloud pairs the ability to manage every endpoint with modern, phishing-resistant authentication to secure every identity and resource. This unified approach delivers strong access control while consolidating your tools for increased IT operational efficiency.

You can try JumpCloud for free to determine if it’s right for your organization. 

Our customers tell us that asset management is also important for security and IT operations. JumpCloud is enhancing its platform to unify SaaS, IT security, and asset management.

Hatice Ozsahan
David Worthington

I'm the JumpCloud Champion for Product, Security. JumpCloud and Microsoft certified, security analyst, a one-time tech journalist, and former IT director.

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