Everything you should know about SaaS security

SaaS security is a high priority for all organizations, keeping SaaS security best practices front and center for every IT and security leader. According to BetterCloud’s 2025 State of SaaS Report, surveying over 600 IT professionals, 95% of organizations are investing in AI use cases. At the same time, 60% of IT teams are blocked by manual tasks, preventing organizations from securely scaling AI. Meanwhile, 56% report external data oversharing—often fueled by Shadow AI and unchecked file sharing.

As we navigate 2026 and the changing SaaS industry, economic uncertainties, AI integration, and endless cyber threats, IT and security leaders must prioritize robust SaaS security approaches. 

In this SaaS security best practices guide, we review:

• SaaS security challenges today’s organizations face
• Core tenets of SaaS security including Zero Trust
• What the SaaS security best practices are for all IT teams
• SaaS security software options
• A SaaS security checklist to make it easy to get started

By implementing these SaaS security best practices, organizations can mitigate threats while optimizing productivity and compliance.

Unpacking SaaS security challenges 

The four biggest security challenges created by SaaS are:

Overprivileged account access

Improper file sharing

Insider threats

Lack of visibility into your SaaS environment

Let’s explore each in further detail.

1. The challenge of identity and enforcing least privilege access policies

Managing identity in SaaS is hard because of fragmented user stores across hundreds of apps. Without centralized management, there are inconsistent provisioning and permission levels.

The more—and the higher—access there is across your infrastructure, the more risk you have if an account is compromised. Hence, the importance of least privilege access. In layman’s terms, it’s granting users the minimum access needed to perform their roles, and cannot be overstated.

It sounds simple, but the terms for certain admin roles and distribution lists often vary from app to app, making least privilege access difficult to discern and deploy. Some apps simply don’t allow a great deal of variation from admin to user. Further, as apps evolve and mature, permission levels can change and expand.

Fortunately, better SaaS management platforms (SMPs) allow IT teams to be much more exact with the access they grant. Using BetterCloud as an SMP, a typical customer can implement a least privilege access model that reduces the number of users with super admin access from 15 to 3.

2. File security

SaaS files multiply without ceasing and we’re all trying new AI apps. That means our sensitive data is everywhere. It’s throughout our SaaS stack and potentially scattered across Large Language Models (LLMs). Credit card numbers, passwords, intellectual property, confidential customer data…the list goes on and on. 

SaaS apps make it easy for users to share files with collaborators within the company, and more worrying, outside your organization. 

Unsurprisingly, this can lead to unwanted issues like compliance violations and data breaches. 

For instance, a user might share a file publicly because it makes collaboration easier, not realizing that the file is indexed by Google in real-time, available for all to see. Keeping track of these sensitive file exchanges is not easy, at least not with traditional IT security methods. 

No one wants to send out press releases about data breaches that happened under their watch. Huge SaaS applications like Microsoft’s OneDrive file storage and Salesloft Drift have been victimized in high profile SaaS cyberattacks in 2025. 

This is why, according to a 2025 BetterCloud research report—Unlocking a Safer Stack—53% of respondents find sensitive files publicly shared as the top security concern out of 8 total.  The second most worrisome concern, at 44%, is sensitive emails forwarded to an ex-employee.

All this goes to show how important it is to be aware of the choices your users are making within apps. 

Clearly every organization needs centralized file-sharing settings and controls, automated alerts for risky configurations and automated remedies.

3. Insider threats risks to your SaaS security

Again, looking at the 2025 BetterCloud State of SaaS report, an overwhelming 48% of IT staff worry about missing key offboarding steps. In addition, consider BetterCloud 2023 State of SaaSOps results that found insider threats, either malicious or negligent, to be the #1 concern among the top SaaS security issues for IT professionals.

Maybe it’s allowing an outside contractor onto the company Slack account. Maybe it’s sharing something via Dropbox over an unsecured network. Employees should be schooled in SaaS security best practices—that much is clear—but it’s at the IT level where these measures need to take root.

4. Gaining visibility into your SaaS environment

Once you peek under the hood of your company’s SaaS stack, there’s a good chance you’ll be shocked by what you find. 

In the early part of the decade, companies quickly amassed SaaS apps to enable:

• Remote work 
• Great employee experience during the Great Resignation
• High productivity

While Shadow IT’s unsanctioned apps are somewhat reduced from those high levels, it’s still an ongoing battle. 

Since such apps can’t be seen by IT teams, it’s virtually impossible to secure and manage them properly. This makes them quite risky. Proper SaaS operations and software can keep track of how these apps are being used, their permissions, and their data read/write authorizations.

So these security challenges and risks bring us to what underpins SaaS security today.

Core tenets of modern SaaS security 

When transitioning to SaaS-first infrastructure, IT and security teams must first recalibrate their mindset around two foundational concepts. Get these two factors right, and the rest of your security program falls into place.

1. The Shared Responsibility Model

One of the best parts of SaaS is that it shifts much of the infrastructure maintenance burden (servers, patching, network uptime) from the organization. This is the main distinction in the Shared Responsibility Model:

• Provider role: The Infrastructure-as-a-Service (IaaS) vendors, such as Microsoft, Google, Salesforce, are responsible for building, maintaining, and securing underlying infrastructure. This includes the physical data centers, the network, as well as the core application code. 

• Customer role: Usually included in every SaaS agreement you sign,  your IT and security team is responsible for how your users access and use the platform. 

It can include configuration settings, granular user access control, data governance, and critically, file-sharing security. If a user accidentally shares a sensitive customer file publicly or grants overly broad access, that risk falls squarely on the customer. Managing these customer-side duties, often across dozens of different applications, necessitates centralized control—a SaaS Management Platform—to deploy effective SaaS security best practices.

2. Deploy Zero Trust for SaaS

In the old client-server world, security assumed that anything inside your network perimeter was safe and trusted. Now that users access and interact with corporate resources from anywhere, that old perimeter is gone. A thing of the past.

In its place, there’s now Zero Trust (ZT). Instead of blind trust, constant verification is now the core tenet.

• Principle: Every user, device, and application attempting to access corporate resources must authenticate and be authorized, regardless of location.
• How this applies to SaaS: For SaaS environments, ZT requires access to be dynamic and context-aware. It continually verifies user identities and endpoint security posture. 

It also verifies that the user is granted the least amount of access required for that specific session. Together, it ensures granular, continuous security monitoring, making identities the new security perimeter.

Now that you’ve got a solid understanding of modern SaaS security principles, let’s move onto how they’re applied to operations.

What are the key SaaS security best practices?

SaaS security requires you control risks in four distinct areas: 

Identity and access control

Data governance and data loss prevention

Visibility and posture management

Third-party and supply chain risk

Let’s review why each requirement is important and best practices associated with controlling SaaS security risks for each one.

1. Identity and access control SaaS security best practices

In a decentralized SaaS ecosystem, the single most critical asset you control is the user identity. If an attacker compromises an identity, they gain access to data across every application a given identity can touch. 

For this reason, IAM and Identity-as-a-Service (IDaaS) platforms are the bedrock of SaaS security best practices.

Focus areaSaaS security best practiceWhy

The user as the perimeter1. Single Sign-On (SSO) Centralize authentication enforcement

2. Multi-Factor Authentication Safeguard against stolen passwords

3. Principle of Least Privilege (PoLP) and Automated OffboardingZero-touch lifecycle management prevents insider threats, zombie accounts, and file risks

4. Continuous security awareness and trainingMitigate human error and negligent sharing risk

Best practice 1: Single Sign-On (SSO) as a mandate

Using multiple usernames and passwords for every app creates friction for employees and risk for security. 

Mandate Single Sign-On (SSO) across your entire stack, federating access through a single, trusted Identity Provider (IdP). Organizations have a lot of choices, such as Okta, JumpCloud, OneLogin, Microsoft Entra ID, and more. 

They improve the employee experience while providing IT with a single, immediate choke-point for revoking all user access upon offboarding.

Best practice 2: Multi-Factor Authentication (MFA/2FA) everywhere

SSO is powerful, but a single stolen password can still breach the entire network. 

Make MFA non-negotiable. Go beyond texting to phone numbers, which is vulnerable to SIM-swapping. Enforce strong, phishing-resistant MFA across all applications, especially those containing sensitive data. 

Look for solutions that support robust authenticator apps or Fast IDentity Online 2, the open authentication standard to enable passwordless, secure login experiences across web and mobile applications.

Best practice 3: Principle of Least Privilege and automated offboarding

Granting users, both human and non-human, the minimum permissions necessary to perform their roles is the Principle of Least Privilege. It, too, is foundational and crucial to limiting the potential blast radius. 

However, manually maintaining least privilege and offboarding across dozens of apps is prone to human error. This fundamentally makes automation essential. 

To clarify why this is important, let’s again turn to the 2025 State of SaaS report. It found that, thanks to manual processes, 33% of organizations have had an ex-employee not offboarded within 24 hours of departure. 

Such delayed offboarding exposes both accounts and the sensitive data they access. Former users can still access them or they can become forgotten. And orphaned accounts like this create an ongoing—and unknown—security risk.

A centralized SaaS Management Platform can both enforce least privilege access and secure the user lifecycle. It automates workflows to:

• Audit and rightsize permissions: Continuously audit for and flag super-admin accounts, helping to reduce the number of over-privileged users across all integrated SaaS apps.
• Zero-touch offboarding: Ensure immediate and systematic de-provisioning, license revocation, and file transfer across all connected applications the moment a user’s status changes in the HR system. This eliminates abandoned or “ghost” account security risks

Best practice 4: Continuous security awareness and training

Since 62% of security professionals believe the biggest security threat comes from the well-meaning but negligent end user, mitigating human error is a top priority. 

Implement mandatory, continuous training that focuses on recognizing phishing, safe external file sharing practices, and the dangers of granting broad permissions (OAuth) to unvetted apps. 

Furthermore, education should be ongoing, not just an annual exercise.

2. Data governance and data loss prevention SaaS security best practices

In this section, we move past who is accessing the data and focus on what the data is. We also focus on how it’s protected from misuse or accidental exposure. In a multi-SaaS environment, data isn’t contained in a single server; it’s replicated across dozens of services. 

Data governance and data loss prevention (DLP) ensure that data retains its security status regardless of where employees store or share it.

Focus areaSaaS security best practiceWhy

Protecting sensitive files5. Data classification and discoveryLocate sensitive data

6. Dynamic DLP policies and file sharing securityAutomatically restrict, audit, or auto-expire external file-sharing links

7. Enforced encryption OffboardingKeep data secure by verifying and enforcing encryption

Read on for details on each data governance and DLP best practice.

Best practice 5: Data classification and discovery to find where sensitive data lives

You can’t protect what you don’t know exists. Start by identifying where your high-value assets—PII, PHI, financial records, and intellectual property—actually live within your SaaS stack. 

This involves tagging and classifying data across all your cloud storage and communication apps. SMPs are essential here, as they can help you map your entire environment and report exactly which shared drives or Slack channels hold classified information, giving you a centralized data map you simply can’t get from individual admin consoles.

Best practice 6: Dynamic DLP policies and file sharing security to focus on detecting insider threats

Once data is classified, DLP policies become guardrails. Crucially, they must focus on the most common source of breaches: the internal user making a mistake. 

As noted earlier, the biggest security threat comes from the well-meaning but negligent end user, not the malicious hacker. The complexity of file sharing is usually the biggest culprit. 

Consider this critical risk insight: while 50% of files have 1 or zero sharing permissions, 25% of files have between 5 and an unwieldy 35 sharing permissions. This “permission sprawl” is a disaster waiting to happen.

An SMP is essential for file sharing security; it can monitor the full scope of file access. From there, it can automatically restrict, audit, or auto-expire external file-sharing links that expose sensitive data externally, ensuring only necessary access windows are open.

Best practice 7: Enforced encryption for both data in transit and at rest

Ensure that all sensitive data is encrypted at every stage—both in transit, using TLS/SSL when moving between systems, and at rest while stored in the vendor’s cloud. 

Verify that your critical SaaS vendors either provide strong native encryption or allow you to use Customer-Managed Encryption Keys (CMEK) for maximum control over who holds the decryption key.

3. Visibility and posture management best practices

This requirement is about getting a clear, continuous view of your entire SaaS environment. It includes both the parts employees try to hide, as well as the active security configuration enforcement. 

You can’t secure what you can’t see, and you certainly can’t rely on periodic manual checks for dozens of apps.

Focus areaSaaS security best practiceWhy

Eliminating app blindspots8. Continuous SaaS security posture managementContinuously scan and automatically remediate configuration drift

9. Shadow IT discovery and governanceDiscover all connected and unauthorized apps via SSO, OAuth, and expense/finance apps

10. Centralized log collection and auditingAggregate activity logs

Let’s go into the SaaS security best practices around visibility.

Best practice 8: Continuous SaaS security posture management

SaaS apps are constantly changing through updates, new features, and user-driven configuration changes. It all inevitably leads to configuration drift away from your secure baseline. 

To combat this problem, SSPM monitors all your core SaaS applications (like M365 and Google Workspace) in real-time to detect, score, and fix misconfigurations. This is solid, proactive security systems maintenance.

Using an SMP, you can continuously scan your SaaS environment and automatically remediate configuration drift against compliance baselines (CIS, SOC 2). This is critical because 60% of IT teams report that excessive manual tasks block them from focusing on strategic initiatives like improving security posture.

Best practice 9: Shadow IT discovery and governance

Shadow IT, which are the unsanctioned or unmanaged applications that authenticate to your domain, are a constant security risk. Discovery must go beyond network traffic analysis to check which apps are installed via OAuth or connected through cloud identity providers.

Adding Shadow IT discovery and governance is where an SMP really shines. It acts as the centralized interface to reveal all connected and unauthorized SaaS applications across multiple discovery vectors (SSO logs, financial data, OAuth tokens), allowing IT to either block or onboard them securely.

Best practice 10: Centralized log collection and auditing

To effectively detect threats, respond to incidents, and maintain compliance, IT generally centralizes all SaaS activity logs into a data lake or into a single tool like a Security Information and Event Manager (SIEM). 

This gives security teams a holistic view of user activity, administrative changes, and security events across the entire stack, enabling them to spot lateral movement that would be invisible in siloed, native SaaS consoles.

4. Third-party and supply chain risk

As SaaS ecosystems grow, the biggest security risk often does not originate from within your company or infrastructure. Instead, it comes from the third-party apps and services that connect to your core data via APIs and integrations. 

Reducing this risk requires a strong focus on limiting non-human identities for service accounts and external vendors.

Focus areaSaaS security best practiceWhy

Securing app-to-app connections11. OAuth/API token governanceAutomatically identify and revoke unused or high-risk OAuth grants

12. Vendor risk assessmentsFormal assessment of vendor security controls

13. Governing Shadow AIIdentify AI app connections

Best practice 11: OAuth/API token governance  

When an employee connects a third-party application (e.g., an internal tool, a marketing automation service) to a core app, like Gmail or Salesforce, it grants the app an OAuth token. These tokens are non-human identities with broad permissions and often no expiration date. They are a massive entry point for attackers if compromised, and hackers work diligently to exploit them.

Just to show how critical this risk can get, BetterCloud discovered over 20,000 unique applications with OAuth access to core file systems across its customer base. Using an SMP like BetterCloud can automatically identify and revoke unused or high-risk OAuth grants. It can even surface and monitor tokens that request broad ‘Read and Write’ access, so you can take action to safeguard your data.

Best practice 12: Vendor risk assessments during SaaS purchasing and renewals

Before an application is approved and rolled out, a formal assessment process is completed. This includes reviewing security certifications (SOC 2, ISO 27001), reviewing data retention and privacy policies, and ensuring the SaaS contract guarantees timely breach notification. 

The assessment process should be continuous, with reassessments conducted annually, during renewals, or whenever the vendor changes its integration model.

Best practice 13: Governing Shadow AI and app usage

The explosion of Generative AI tools like Google Gemini, as well as embedded AI features in SaaS apps introduce a new risk: Shadow AI. 

For instance, employees could be copying sensitive data into public Large Language Models. Those LLMs, in turn, probably use that data for model training, instantly breaking confidentiality and compliance.

Treat these tools as the highest-risk third-party apps. To counter the risk, leverage your SMP’s discovery capabilities to identify all AI/LLM applications being used via OAuth/API connections. Next, make sure you enforce clear data leakage policies to prevent sensitive data, like source code or PII, from being uploaded to unsanctioned AI services.

Building your SaaS security software arsenal

Meeting SaaS security challenges and providing the highest SaaS security is impossible without the right tools. Here are four essential software solutions to consider adding to your IT and security stack.

1. Identity and access management

Identity and Access Management (IAM) is a necessity for automating secure access in SaaS apps. IAM allows IT to control user access to sensitive information within a company on a fully automated basis. The automation factor is a key difference from manual, mistake-prone legacy options; IAM is more secure and allows admins to fine-tune those all-important privilege settings on who gets access to what.

With IAM, companies can use authentication methods such as:

• Unique passwords: lengthy passwords that include randomized letters, symbols, and numbers
• Pre-shared keys: passwords shared among users with access to the same materials (not as secure as individual, unique passwords)
• Behavioral identification: artificial intelligence that analyzes a user’s human idiosyncrasies, such as typing and mouse use habits
• Biometrics: fingerprints, faces, voices, etc., are used to authenticate users (given the highly personal nature of this data, an implementation should be considered very carefully)

2. Cloud Access Security Brokers (CASBs)

CASBs are another SaaS security software option. According to Gartner, CASBs are on-premises or cloud-based security policy enforcement points. They stand between cloud service consumers and cloud service providers to combine and add enterprise security policies as cloud-based resources are accessed.

CASBs are employed in a wide range of cloud computing services, including PaaS, IaaS, and of course, SaaS. In each of these use cases, they’re used for data security, asset encryption, inline blocking of shared assets, and network security.

It’s useful to compare CASBs to SMPs since they both enforce SaaS security in different ways. The role of CASBs extends well beyond SaaS, and unlike SaaS-focused SMPs, their response to a security threat tends to be less nuanced. 

Admins using CASBs can set triggers (such as when a new user appears on the network), but lacking the granularity of SMPs, CASBs are prone to over-enforcing these triggers and bringing workflow to a halt. 

On the other hand, there are purpose-built, SaaS-centric SMPs. They offer smarter, context-aware, and workflow-friendly solutions that maximize user productivity without sacrificing security.

3. SaaS security posture managers

With hundreds of settings, permissions, and integrations across all your apps, it’s virtually impossible for a security team to manually check everything. A single forgotten setting—like disabling Multi-Factor Authentication (MFA) on a test account—is all a hacker needs.

This is where SaaS Security Posture Management (SSPM) comes in. It’s an automated set of tools and a system-wide security approach designed to continuously monitor SaaS applications. They manage both security configurations and user access to ensure compliance to required security and compliance standards.

Pairing an SSPM with an SMP delivers proactive threat detection and compliance monitoring across your entire SaaS ecosystem. An SMP is excellent at user and file governance, while an SSPM specializes in application-level configuration and identity risk.

4. SaaS management platforms with data loss prevention functionality

All-in-one SaaS management platforms are essential for data loss prevention and governance because corporate data is fundamentally decentralized across dozens of applications, making manual file security impossible. At the same time, native admin consoles lack the cross-app visibility required to track sensitive information, leading to massive file-sharing sprawl. 

The SMP solves this by discovering sensitive data, enforcing dynamic DLP policies across all apps, and automatically revoking excessive external sharing permissions. Without an SMP, data leakage pathways lurk.  Without an  SMP, IT can’t efficiently remediate the configuration drift that exposes files to the public, either.

Lastly, an SMP with strong automation capabilities completely automates offboarding. To guard against incomplete or delayed offboarding—and the insider threat—make sure you use an automated tool that is mature and proven, like BetterCloud.

BetterCloud: your #1 SaaS security best practice

The fundamental shift is clear: effective SaaS security best practices are no longer about adding another firewall. Instead, they are about managing a distributed, people-centric risk model. Successful organizations recognize that the greatest threats lie in uncontrolled access, file-sharing sprawl, configuration drift, and the explosion of Shadow IT and Shadow AI.

Automation is essential to solving SaaS security challenges

With 95% of companies betting on AI, 56% found file-sharing security impossible to monitor, and IT supporting 108 employees each (up 31% YoY), automation is not optional.  It’s the only way to survive and thrive.

Regardless of where you’re at, automation will help reach your SaaS security, management, and efficiency goals. 

Zero Trust for SaaS

To help solve your SaaS security challenges, unified tools like BetterCloud can help.

• User automation: with no advanced scripting or programming required, it can make tasks like employee onboarding/offboarding zero-touch right away for IT and security teams. From there, you can move to automate additional SaaS priorities.
• Data protection: automate content scanning to identify where sensitive data is located, limit the number of super admins, and continually audit and monitor file permissions and automatically revoke improper sharing.

By leveraging Zero Trust and automating with a unified SaaS platform from 2025 Gartner® Magic Quadrant™ Leader BetterCloud, you can free 40–50% of IT time to ensure a safer SaaS stack.

Ready to follow SaaS security best practices with BetterCloud? Download The 2025 State of SaaS Report and Unlocking a Safer SaaS Stack, catch the next live demo, or talk to sales now

Editor’s Note: This article was updated to include more recent data and the latest SaaS security functionality.