6 Common SaaS Security Risks You Must Know in 2023

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min read time
June 19, 2023
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As per recent research, 80% of companies already use at least one SaaS solution.

SaaS offers many advantages, like adaptability and flexibility. However, it also brings significant security concerns. When organizations hand over their customers' data to external vendors, they risk their data's security.

Before buying a new SaaS application, it is important to consider the security risks. This will help you make an informed purchasing decision.

This article discusses the common SaaS security risks associated with SaaS solutions, and it’ll also provide proactive insights that companies can take to mitigate SaaS security concerns.

What is SaaS security?

SaaS security refers to the safety and privacy of data carried by software-as-a-service apps. It encompasses encryption, authentication, and access controls crucial as SaaS applications access sensitive customer data. It is your responsibility to monitor, manage and safeguard them effectively.

So, SaaS security relates to the policies and procedures to safeguard the data within software-as-a-service (SaaS) solutions. It entails protecting, managing, and monitoring the sensitive information of businesses and customers in the cloud. And it also entails assuring its availability, integrity, and confidentiality.

What do you mean by SaaS security risks?

SaaS security risks are prospective vulnerabilities and threats that might endanger the security of SaaS applications and their data.

Risks can arise from various sources. These include unauthorized access controls, vulnerabilities in the SaaS vendor's infrastructure, unsecured APIs, data breaches, insider threats, and poor user deprovisioning. All of these can contribute to risk.

Understanding and mitigating these risks is critical for organizations, as this will lead to compliance breaches, lawsuits, and reputational damage.

Common SaaS Security risks that organizations should be aware of

1. Unauthorized access

36% of employees had access to systems even after leaving the job. Due to the existence of sensitive data, access control is crucial for all SaaS applications.

Businesses using SaaS must understand whether the single point of entry to the cloud server can reveal sensitive information.

Sharing passwords in unsecured chats, email, and inadequate deprovisioning practices can result in unauthorized individuals and ex-employees retaining access to applications. This can lead to data breaches, as these individuals can exploit their access to the application and steal data.

2. Shadow IT

Approximately 80% of staff admit to using SaaS apps on the job without prior permission from their IT department.

Shadow IT, or using unapproved software and applications, creates security issues such as a lack of control, data breaches, increased spending, and data loss.

Shadow purchases will increase the use of unauthorized third-party applications purchased without conducting adequate due diligence. Apps may not always comply with the most recent security regulations and compliance standards. This puts firms at risk of data breaches and regulatory issues.

Organizations must educate workers on the dangers of using unapproved apps. They must also establish rules and processes to oversee and monitor the use of third-party apps.

3. Poor compliance and regulation

Organizations must ensure regulatory compliance and certification with safety protocols to maintain robust cybersecurity procedures. Even if your company maintains internal compliance, depending on non-compliant SaaS providers might expose you to non-compliance issues.

To achieve complete compliance, the PCI DSS standard, for example, requires enterprises to guarantee that their vendors fulfill specified third-party risk management standards. To reduce this risk, your security team should periodically check and evaluate SaaS suppliers' compliance with industry standards and laws.

Failure to do so may result in data breaches, significant penalties, and reputational harm to your firm. Prioritizing vendor compliance is critical for keeping your data and processes secure and compliant.

4. Misconfiguring the Cloud

43% of organizations have experienced security concerns that can be directly traced back to SaaS misconfigurations.

Cloud systems sometimes have multiple tiers of complexity, which developers build to assure the security and dependability of each application. However, having more layers increases the possibility of misconfiguration difficulties.

When security teams ignore minor vulnerabilities, it can have a significant and long-term impact on the broader infrastructure. Misalignments with security rules provide continuous problems that are difficult to manage and correct.

Furthermore, a lack of understanding of SaaS applications' workings and security requirements poses continuing security threats. Business security teams should implement SaaS Security Posture Management (SSPM) to address their concerns proactively. SSPM gives complete control and visibility over the SaaS app stack.

5. Storage and data loss

Sensitive SaaS data has been exposed in about 81% of organizations, highlighting the prevalence of data vulnerabilities and the urgent need for enhanced security measures.

Storing sensitive data in the SaaS landscape raises security issues as enterprises entrust third-party suppliers with data management and protection. Using vendor-owned servers raises the risk of illegal access, data breaches, and other dangers.

Cloud-based data storage is potentially susceptible to data loss or corruption due to connectivity problems, device failures, and disasters. Businesses should evaluate their SaaS storage suppliers carefully to prevent risks. They should choose trusted cloud service providers and use strong data encryption when storing data.

Implementing data backup methods, evaluating retention rules regularly, and focusing on compliance with regulations and laws are critical strategies to prevent data loss while preserving data integrity.

6. Non-compliance

SaaS applications must pass the necessary security audits and regulations for compliance certification. These certifications prove that the application is capable of keeping customer data secure.

Often, third-party SaaS vendors are notorious for falsifying such certifications, and when you use one of their applications, you’re putting your sensitive data at risk. So, it is necessary to stay away from these applications.

However, your employee might go behind you and purchase such applications (shadow IT), leading to SaaS security risks. So, it is essential to prevent shadow IT, which would stop your users from purchasing such applications.

And your SaaS security team must be vigilant and scrutinize all the vendors to ensure they comply with regulatory standards.

How to mitigate SaaS security risks

Use a SaaS management tool

A SaaS management platform provides visibility into your SaaS apps so you can manage usage, monitor access, and enforce security standards. You can detect unwanted access or possible vulnerabilities and take immediate action by centralizing administration.

A bird's-eye view of the SaaS portfolio provided by these platforms can help IT teams detect shadow IT applications immediately and eliminate them. It’ll also make it easier for the security team to verify a vendor’s compliance with security regulations easily.

Image of CloudEagle dashboard

You can use a SaaS management platform like CloudEagle to prevent shadow IT and mitigate the SaaS security concerns of third-party applications. It’ll provide a centralized view of your application portfolio and help your team stay in control of the SaaS stack.

Robust authentication and authorization

82% of employees believe accessing sensitive company information they weren’t authorized to view would be possible.

Strong authentication and authorization processes are critical for protecting sensitive data and preventing unwanted access to SaaS apps.

Access controls restrict access to resources, such as SaaS apps, to only authorized users. Strong access restrictions may be implemented in your SaaS system in various ways, including:

  • Multi-factor authentication (MFA)
  • Role-based access controls (RBAC)
  • Password Guidelines
  • Session time-outs  

MFA provides an extra layer of protection by asking users to give other credentials along with their login and password, such as a one-time password or a biometric scan.

Proper authorization restrictions guarantee that users only get access to the required features and data for their roles and responsibilities.

Train your staff on SaaS security concerns

Employee education and awareness are critical in reducing SaaS security risks. To eliminate human error and limit threats. Educate your staff on SaaS security best practices such as strong password management, phishing knowledge, and safe browsing habits.

Businesses can empower their staff to make educated security choices and avoid acts that could jeopardize data security by cultivating a security-conscious culture and offering regular training.

Conduct consistent compliance and regulatory audits

You should constantly monitor and audit user activity and vendor to mitigate SaaS security risks. These audits assist businesses in identifying redundancies in their security measures. Furthermore, monitoring and auditing user actions help detect unwanted access, suspicious activity, and data exfiltration.

Security teams must frequently monitor and assess their SaaS providers' compliance with industry standards to identify any SaaS cloud security vulnerabilities that must be addressed.

Thorough risk assessment and due diligence

Before implementing a SaaS application, it is necessary to perform a complete risk assessment. Consider the possible SaaS security concerns connected with the SaaS application, such as data handling procedures, encryption mechanisms, vulnerability management processes, and troubleshooting SSL errors. 

SSL (Secure Socket Layer) errors can occur for multiple reasons, including a mismatch of domain names, outdated SSL certificates, and untrusted Certificate Authority that can hinder the ability of a web server and browser to establish a secure connection, leading to potential risks for data security.

Conduct due diligence on the SaaS vendor. Learn about their security handling capabilities, compliance, incident response abilities, and data protection measures, including their ease in managing and troubleshooting SSL errors. This thorough assessment provides enterprises with the information they need to make informed decisions.

They can select SaaS providers who satisfy their security standards, thus reducing the risk of security breaches or data exposures."

Maintain a SaaS security checklist

Creating a detailed SaaS cloud security checklist tailored to your organization's SaaS usage helps guarantee that security policies are consistently implemented. Data encryption, frequent backups, safe API integrations, incident response methods, and staff security awareness programs must all be included on the checklist.

You must also make sure that there are sufficient tools on tap to meet the requirements laid out in your checklist. Having an essential API security scanner available to you is a good example.

Review and update the checklist regularly to keep up with developing security best practices and emerging risks. Organizations can methodically address security needs while maintaining a safe SaaS environment using SaaS security solutions by using a standardized SaaS cloud security checklist.

Image showing the SaaS security checklist


SaaS data security is a challenge for IT teams, especially in enterprises. However, a robust SaaS management system can help businesses safeguard critical data by ensuring proper access controls, user provisioning, and application visibility.

CloudEagle, a comprehensive SaaS management platform, offers complete visibility over the SaaS stack, eliminating the challenge of Shadow IT.

In addition, the platform can integrate with your internal IAM and financial and HRIS systems and identify each user's access and permission levels. This holistic and centralized visibility will enable SaaS security teams to prevent unauthorized access, shadow IT and keep the data secure.

Book a demo with CloudEagle to keep your stack secure.

Frequently asked questions

1. Why is SaaS security important for businesses?

SaaS security is critical for businesses to protect sensitive data, maintain regulatory compliance, and retain their brand. It safeguards against unauthorized access, data breaches, and other security risks. It also keeps the confidentiality and reliability of cloud-stored information intact, thus boosting stakeholder trust.

2. What should you look for in SaaS security Checklist?

A SaaS Security Checklist should focus on existing security rules, level of compliance, employee authentication methods, data encryption and tokenization, and automatic backups.

Written by
Prasanna Naik
Co-founder, CloudEagle
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