What is the Biggest Password Security Risk in Business?

Creating and remembering unique passwords for every service you access online is challenging. For businesses, the stakes are even higher.

If hackers break into your business account, not only they could wreak havoc, but their intrusion could also lead to serious regulatory compliance issues.

This article explores why password security is so important for businesses. It also reviews the risks of weak password practices and how implementing stricter password policies can protect your business from cyber threats.

Keep reading to learn more about the risks of weak password practices and how to mitigate them with these five best practices.

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What is password security, and why does it matter for businesses?

Password security is the process of protecting access to systems, networks, and data by enforcing policies that require users to employ strong authentication.

Effective password security is critical to protecting an organization against malicious cyber threats, data breaches, and compliance issues.

Hackers can break into business systems, steal sensitive information, disrupt operations, and cause reputational damage. They can also steal users’ credentials and impersonate legitimate users to gain access to data or disrupt operations through distributed denial of service attacks.

Strong password practices are the first line of defense against these risks. Passwords are often the only barrier standing between hackers and sensitive information.

How can password practices lead to a business password security risk?

Weak passwords are a huge risk. They are more vulnerable to hacking and are easier to forget.

When employees forget their passwords, they often try to log in with easy-to-guess or common passwords.

In one study, 68% of respondents reported reusing passwords. This is a big problem because reused passwords allow hackers to break into multiple accounts through one breach.

The breach at Equifax, for instance, has put 143 million people at risk for identity theft due to stolen passwords.

According to various data protection regulations and laws, depending on the country or region the data is collected and used, companies that store sensitive data like social security numbers, health records, or financial information, are required to protect that data to their best knowledge.

However, legal actions have been brought against hundreds of companies for failing to protect data, including paying regulatory fines and gaining reputational damage.

5 best practices to strengthen your business password security

Keep these best practices in mind as you implement stronger password policies to protect your business from cyber threats.

1. Use long passwords and change them frequently. Strong passwords should be at least 12 characters long and preferably longer. Passwords longer than 12 characters are much stronger and provide better protection against brute-force attacks, where hackers try many passwords until they find the right one.
2. Use unique passwords for each account. Using the same password for multiple accounts puts all of those accounts at risk if hackers break into any one of them. To avoid this risk, employees should use unique passwords for every account.
3. Require employees to update passwords at set intervals. Weak passwords are easier to break, so they should be updated every few months.
4. Require two-step verification (or Multi-Factor Authentication) – Two-step verification (also referred to as two-factor authentication) requires users to enter a password plus a second login method to log in to accounts. This can be a code sent via text or generated by an authenticator app.
5. Lock-out procedures for inactive accounts – Password lock-out procedures protect against easy-to-guess passwords by locking out accounts that have failed to log in with a correct password a certain number of times. The length of the lockout period varies but should correspond to the sensitivity of the account. Higher-risk accounts should have longer lockout periods. Lockout procedures help prevent employees from using easy-to-guess passwords, but they can also be used to help protect against spear phishing attacks. Spear phishing attacks target particular employees with personalized emails designed to trick them into logging in to a fake account. Employees can fall for these trick emails if the fake login page looks like the real account. Instead of requiring employees to type their password, lockout procedures prevent them from logging in altogether.

When it comes to password security, it is better to be safe than sorry. Creating and remembering unique passwords for every service you access online is challenging, but it’s necessary to keep your data safe.

Your company’s cybersecurity is only as strong as your weakest password. Therefore, take time to understand password security risk and implement stronger password policies to protect your business.