10 security risks your business cannot afford to ignore

The SaaS market is booming.

With an annual growth rate of 18.3%, projections indicate that the SaaS industry will reach $700 billion by 2030. This exponential growth signals a thriving future for SaaS businesses. However, such growth also brings increased security risks and cyber threats because of the increased vulnerability of unmonitored security systems in the expanding realm of SaaS platforms.

The risks and challenges include misconfiguration of SaaS access that hackers could take advantage of, issues in integrating SaaS platforms into your security efforts and keeping up with changes in your SaaS platforms. 

In this comprehensive guide, you will learn why you need SaaS security and best practices and standards for ensuring your SaaS applications work efficiently, without a breach.

What is SaaS security?

SaaS security is a critical concern for any organization using cloud-based applications. At its core, SaaS security is about protecting data and privacy in cloud apps that are paid for on a monthly or annual basis. With so much data visible to so many people on different devices, it’s essential to remain vigilant.

In a 2023 survey conducted by the Cloud Security Alliance, 55% of respondents reported experiencing a SaaS security incident within the last two years. This underscores the need for SaaS businesses to take security seriously and implement measures to protect their data.

How do SaaS security risks impact your business?

SaaS security risks can have a significant impact on your business. 

• Data loss: Sensitive data when exposed to unauthorized third parties such as hackers, insiders or competitors can result in harming your reputation and customer trust. It can also cost you loss of competitive advantage besides incurring legal penalties and financial losses. 

The cost of a data breach is on the rise, with the average cost jumping from $3.86 million in 2020 to $4.24 million in 2021. 

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• Disruption or downtime: Technical glitches, natural disasters or cyberattacks can negatively impact your overall performance, productivity, customer satisfaction and even revenue. The average cost of IT downtime can be estimated closer to $10,000 per minute. 

• Compliance or regulatory violations: SaaS risks can also result in compliance or regulatory violations if your applications fail to meet the standards and regulations of different jurisdictions and industries. This can expose you to legal liabilities, audits, fines and lawsuits.

For example, LastPass, the popular password management software, suffered two data breaches in 2022. In August, a threat actor infiltrated the company’s development environment through a compromised developer account. In November, they announced another breach, stating that an unauthorized party had gained access to certain customer information using information obtained in the August incident. While no passwords were accessed, the attack compromised other personally identifiable data such as names, addresses and dates of birth.

“A critical detail near the end of the investigation suggested that one of four DevOps engineers with access to the password manager’s decryption keys manually entered their master password on a malware-laced personal device at home.”
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Such incidents highlight the vulnerability of companies that use SaaS applications and the importance of addressing SaaS security risks.

10 SaaS security risks and challenges

SaaS security risks are potential vulnerabilities and threats associated with using cloud-based applications. Some of the main SaaS security risks include:

1. Compromised access management

SaaS customers need to ensure authorized and secure access to their applications and data for their users, especially in a hybrid work model. It helps them in:

• Securing their data from hackers or insiders
• Following data protection, privacy and security laws and rules
• Preventing mistakes that could jeopardize data or cybersecurity
• Teaching their users how to use SaaS safely
• Using single log-in, role-based access control and multi-factor authentication
• Checking the SaaS provider’s data retention policy and service level agreement (SLA)

2. Cloud misconfigurations contribute to more than half of the security incidents

Cloud misconfigurations are errors or oversights in setting up SaaS applications, platforms or infrastructure that could expose them to cyberattacks or data breaches. According to a survey by the cloud security alliance, SaaS misconfigurations may be responsible for up to 63% of security incidents.

Some of the causes of misconfigurations include the following:

• SaaS security requires visibility into the changes in the cloud environment
• Multiple departments with access to SaaS security settings can create security gaps and vulnerabilities
• Manual detection and remediation of SaaS security issues is time-consuming and inefficient

3. Regulatory compliance: SaaS’s biggest hassle

You must comply with various laws and regulations such as HIPAA, GDPR, PCI DSS etc and ensure that your SaaS providers do the same because:

• Regulatory compliance helps in data protection, privacy and security from legal risks and penalties
• You can meet the expectations and requirements of your customers, partners and investors
• Your organization can gain a competitive edge and reputation in the global market
• You can improve your business operations, performance and product quality

Watch how Sprinto got security compliant using Spendflo

4. Being uninformed about data storage

SaaS customers need to know where their data is stored because:

• It affects their data privacy, security and availability
• It determines the data access, ownership and control
• It varies depending on the location, SLA and SaaS provider.

 “No data is clean, but most is useful.” 

                                                             ~ Dean Abbott, Co-founder, Chief Data Scientist at SmarterHQ

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5. SaaS retention: Leaving your data behind

When using a SaaS application, your data is stored in the cloud. But what happens to that data when you stop using the service? You must know how to retrieve or permanently delete your data when you cancel your subscription.

SaaS providers have different policies for retaining customer data after cancellation. Some may delete it immediately, while others may keep it for months or even years. As a customer, gaining knowledge on accessing or downloading your data is mandatory for your future reference.

To ensure that your data is securely and legally erased when you leave a SaaS service, it’s imperative to review the provider’s data retention policy before signing up or terminating your subscription. Some providers may not completely wipe your data or may not follow the laws and regulations of your region or industry. By being informed and proactive about SaaS retention, you can protect your data and your business.

6. Not protecting your data vulnerable to attacks

SaaS customers and providers must protect their data from unauthorized or malicious access, use, disclosure or theft by hackers or insiders. To implement this, you should use tools and plans such as:

• Data encryption to scramble data and make it unreadable
• Data loss prevention tools to monitor and block data leaks or losses
• Threat protection tools to detect and stop cyberattacks
• Incident response plans to recover and restore data

7. Neglecting to remain vigilant against risks

Disasters are unpredictable. They can strike anytime and anywhere, damage your infrastructure, disrupt your operations and affect your applications and data. Besides, they can hamper your reputation and business continuity. 

To combat such incidents, you must have a disaster recovery (DR) plan. You must ensure that your applications and data are available and functional. The DR plan should outline how you will restore your applications and data in case of an emergency. A basic DR plan helps you:

• Determine which systems and data are essential for the operation of your business and prioritizing your recovery in the event of a disaster
• Develop a strategy for backing up critical systems and data and establishing procedures for recovering them
• Assign roles and responsibilities to team members for executing the DR plan
• Review and update the DR plan regularly to ensure that it remains relevant and effective as your business evolves

When you have a good backup strategy with copies of your data, you will need an SLA that defines the service level and availability you expect from your SaaS provider. These steps will help you recover quickly and smoothly from any disaster.

8. Trust erosion among users as a result of identity theft

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Identity theft is a serious threat to SaaS customers. Hackers or fraudsters can steal or fake your users’ identities and access your applications or data. They can also cause damage, steal information or scam your users. You don’t want to lose your users’ trust or face legal consequences because of identity theft.

You must educate your users on securing their passwords and using identity verification methods, such as multi-factor authentication or biometrics. You must also monitor your users’ activity and spot any unusual or suspicious behavior. These steps will help you protect your SaaS users from identity theft. 

9. Supply chain attacks exposing your data to fraudsters

As a SaaS customer, you rely heavily on software development and delivery processes that involve multiple sources and components. But hackers can exploit your system’s processes and sneak in malware or backdoors into your code or dependencies. Thus, it can expose your data, systems and finances to cyberattacks or fraud.

The best way to secure your software supply chain from end-to-end is by following these steps:

• Use secure coding practices
• Utilize code-scanning tools
• Make of habit of using digital signatures

All these steps can help you prevent supply chain attacks.

10. Having compromised secret-keeping systems 

As a SaaS customer, you entrust sensitive information such as credentials, keys, tokens and certificates to access and operate your applications and data. However, these secrets can be exposed or leaked through various means, including insecure interfaces, vulnerable code, misconfigured systems or human error. This can result in data breaches, identity theft or unauthorized access.

To mitigate these risks, you must use secret management tools, encryption methods and access controls. Additionally, you should regularly rotate and revoke your secrets.

For instance, in the wake of security breaches in 2022, LastPass recommended that its customers reset their MFA secrets with their preferred Authenticator App as a precautionary measure. The company communicated this recommendation through email and in-product notifications.

How to overcome SaaS security risks

Although most cloud-based applications are convenient and scalable, overcoming SaaS security risks and optimizing SaaS security standards is a time and resource-intensive exercise. 

Here are the few SaaS security best practices you should consider to minimize SaaS security risks:

1. Educate your employees: Empower your employees with the fundamental knowledge on the SaaS security best practices, such as strong passwords and phishing awareness.

2. Strong authentication: Strong authentication ensures authorized access and prevents hackers and scammers from barging into your systems.

3. Data encryption: Using data encryption tools, you should protect your data in transit and at rest from unauthorized users.

4. Maintaining a reliable services inventory: Things become easier when you monitor your SaaS usage and prefer manual data gathering and automated tools such as Spendflo to maintain a reliable services inventory.

5. Use CASBs and SSPM: Cloud access security brokers (CASB) and SaaS security posture management (SSPM) can add a layer of security that extend your visibility and control over your SaaS environment.

6. Assess compliance regularly: Check vendor compliance with cybersecurity regulations and frameworks using prebuilt questionnaires and automated tracking. 

7. Check a DR plan: To minimize the impact of disastrous events, organizations need to have ap, restore and failover strategies.

Read The Ultimate BetterCloud Pricing Guide to streamline and optimize your IT operations.

Mitigating SaaS security and compliance risks for your business through vendor risk management

Navigating the complex landscape of SaaS security and compliance risks can feel like an uphill stride. From dodging misconfigurations to fending off supply chain attacks, keeping your SaaS stack secure is no easy feat. However, with Spendflo’s cutting-edge security analysis tools, you can automate your vendor risk management and ensure the security of your SaaS stack. 

Start Spendflo’s free security analysis today and take the first step towards a more secure future for your business.

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