Modern organizations are increasing cloud adoption to reap the operational benefits of outsourcing critical business functions. A 2021 study found that 90% of surveyed organizations now use cloud computing, such as software-as-a-service (SaaS) services.

SaaS solutions help organizations achieve vital objectives, such as cost reductions and faster time-to-market. However, like all other digital transformation products, they also introduce cybersecurity risks

Organizations ultimately need to trust their sensitive data in the hands of third-party vendors when they sign on as customers. Despite this trust, a data breach caused by the poor data security practices of a SaaS provider remains the responsibility of the client organization. 

This article outlines the top 7 cybersecurity risks introduced by SaaS solutions and how organizations can address them before they result in data breaches. 

Top 7 SaaS Cybersecurity Risks

The top 7 cybersecurity risks your organization should consider when using SaaS services are listed below.

1. Cloud Misconfigurations

As SaaS environments operate in the public cloud, organizations must consider cloud applications' unique cyber threats.

Cloud misconfigurations occur when a SaaS provider or SaaS customer fails to secure the cloud environment, compromising data security. Such lapses in security management expose organizations to many cyber threats, such as:

A common misconfiguration in cloud computing is allowing excessive permissions. This misconfiguration occurs when an admin provides too many access rights to an end-user, resulting in a permissions gap. Excessive permissions are a significant security concern as they often facilitate cloud leaks, data breaches, and insider threats.

Cloud Permissions Gap

A well-known example of a cloud service provider misconfiguration is Amazon Web Services’ (AWS) default public access settings for S3 buckets. Aside from considering misconfigurations on the cloud provider’s end, your organization should also look inwards at its own security measures; Gartner predicts 99% of cloud security failures will be the customer’s fault by 2025.

Another example of a critical software misconfiguration is the Microsoft Power Apps Data Leak. UpGuard researchers discovered misconfigured OData APIs in Microsoft’s Power Apps portals. This oversight resulted in the exposure of 38 million records across 47 organizations.

Read the Microsoft Power Apps data leak report here.

2. Third-Party Risk

SaaS services generate third-party risk – the risk deriving from any third party in an organization's supply chain. Third parties can pose different levels of risk to an organization’s information security. For example, an organization will likely consider a contracted office janitor a low-level security threat, whereas a SaaS vendor is likely high-risk. 

Most SaaS apps will access or store an organization's sensitive data, including publicly identifiable information (PII) and other privileged information. Your organization may have strict security measures to mitigate cyber threats, but your protection is only as strong as the weakest link in the supply chain.

Organizations must implement Vendor Risk Management Programs with continuous security monitoring features to effectively manage the unique cyber risks their SaaS vendors contribute to the attack surface.

3. Supply Chain Attacks

A supply chain attack occurs when cybercriminals target an organization through vulnerabilities in its supply chain. Vulnerabilities of this nature often arise from a vendor’s poor security practices. 

Cybercriminals can compromise your organization’s sensitive data by targeting the source code, updating mechanisms, or building processes of your vendor’s software. For example, the largest cyber attack on the US government to date was facilitated by an IT update from its SaaS vendor Solarwinds. 

Your organization can’t rely solely on robust internal cybersecurity practices to prevent supply chain attacks. Security teams need detailed visibility into the entire vendor ecosystem to identify and remediate supply chain vulnerabilities before cybercriminals exploit them. 

4. Zero-Day Vulnerabilities

A zero-day vulnerability is an unpatched software vulnerability that remains unknown to developers. Cybercriminals can exploit these vulnerabilities through cyber attacks, often causing data breaches and data loss across affected organizations. 

Zero-day vulnerabilities are particularly damaging when identified in popular SaaS platforms –  a significant number of organizations could potentially be affected, causing a mass shutdown of operations. For example, Accellion’s file-sharing system, FTA, was compromised in 2020 by web shell attacks and zero-day exploits to take advantage of an unpatched software vulnerability. The incident was part of a broader supply chain attack that breached the sensitive data of over 100 Accellion customers, resulting in widespread operational disruptions. 

Organizations must be able to rapidly identify existing vulnerabilities in their SaaS apps to prevent further security issues from occurring through delayed remediation. 

5. Insufficient Due Diligence

Vendor due diligence is the thorough assessment of a potential vendor by an organization before sharing sensitive company data with them. A due diligence assessment verifies the accuracy of a vendor’s claims regarding its security posture and regulatory compliance. It also identifies vendors’ existing security risks, allowing client organizations to request remediation before entering partnerships. 

Many organizations do not perform adequate due diligence by only assessing vendors during the onboarding process. If one of your SaaS vendors suffers a cyber attack, the threat actors can leverage its compromised systems to access your organization's sensitive data. Public exposure of this data means your organization, not the vendor, deals with the regulatory, financial, and reputational consequences.

Organizations should treat SaaS vendors as vigilantly as other attack vectors to prevent customer data breaches and other significant cyber attacks. Security teams must take a systematic approach to the due diligence process through a structured vendor risk management program to gain visibility into each vendor’s security posture at any given time. 

6. Non-Compliance 

Regulatory compliance and certification with security frameworks indicate an organization has adopted an acceptable standard of cybersecurity practices. Even if your organization complies with all relevant regulations and frameworks internally, you are still at risk of non-compliance if your SaaS vendors are non-compliant. 

For example, the PCI DSS standard has a specific set of third-party risk management requirements that organizations must ensure their vendors comply with to achieve full compliance. 

Your security team must regularly monitor and validate its SaaS vendors’ compliance with industry standards and regulations to highlight any security gaps for remediation. Otherwise, your organization runs the risk of data breaches, resulting in hefty fines and reputational damage. 

7. Unclear Responsibilities

Unlike traditional data center models, the security of cloud environments is the responsibility of both an organization and its cloud service providers. Your organization’s SaaS vendors will each have differing shared responsibility models outlining the roles and responsibilities of each party.

Security teams must consider each SaaS service’s unique security requirements or risk creating cybersecurity gaps under the assumption the vendor is responsible. Organizations should also remember that insufficient data security is ultimately their responsibility in the event of a data breach. 

Below are the shared responsibility models of two popular cloud service providers – Microsoft Azure and AWS.

AWS Shared Responsibility Shared Model

 AWS’ shared responsibility model. Source: 

Microsoft Azure

Microsoft Azure’s shared responsibility model. Source:

How to Manage SaaS Security Risks

Research shows modern organizations will increasingly leverage SaaS solutions to drive many of their critical operations. According to Gartner, the SaaS market will grow by 21.7% from 2021, reaching $482 billion in 2022. 

Organizations must integrate SaaS-specific security processes into their existing information security policies or risk joining the 90% of organizations that will inappropriately share sensitive data if they fail to control public cloud use by 2025

Below are 7 ways your organizations can effectively manage SaaS security risks and avoid costly data breaches.

1. Implement Cloud Security Mechanisms

Organizations are encouraged to adopt Secure Access Service Edge (SASE) to enable greater visibility over cloud security controls and security policies. SASE is an emerging cloud security architecture that offers more advanced cloud data protection functionality than traditional network security solutions. 

SASE architecture drives zero-trust network access (ZTNA) by enabling the least privilege principle and identity access management (IAM) mechanisms, like Cloud Infrastructure Entitlement Management (CIEM) and multi-factor authentication. 

SASE also facilitates the use of modern cloud security solutions to manage access control across SaaS applications, including:

Learn more about the SASE security model. 

2. Establish an Incident Response Plan

Even with a robust information security policy, security incidents still occur. If a data breach occurs at the hands of a SaaS vendor, organizations must minimize its impact to avoid costly damage. 

Your organization’s incident response plan should cover specific scenarios, ranging from malware infections to customer data breaches. An effective incident response plan performs the following roles:

  • Outlining all key stakeholders
  • Streamlining digital forensics
  • Shortening recovery time
  • Protecting your organization’s reputation 

Learn how to implement effective incident response planning.

3. Exercise Thorough Due Diligence

Organizations must routinely assess SaaS vendors’ security postures at all stages of the vendor lifecycle, not just during the vetting process. With most large organizations managing hundreds or thousands of vendors, performing due diligence effectively throughout the entire vendor ecosystem can quickly become complicated. 

Implementing a vendor tiering process is the most efficient way for your security team to prioritize high-risk vendors, like SaaS providers, during routine risk assessments

UpGuard’s vendor risk management platform automates the vendor tiering process, enabling security teams to scale their efforts effectively without neglecting due diligence as the vendor ecosystem grows. 

Try UpGuard free for 7 days.

4. Visualize the Third-Party Attack Surface

Organizations can only respond to the cyber threat they can see. As innovative SaaS solutions continue to streamline business functions, your organization likely has an increasing list of vendors. 

It’s easy to lose visibility into the attack surface – as your vendor inventory grows, your security team doesn’t necessarily follow suit.  

UpGuard automatically discovers, monitors, and tracks the security postures of an organization’s vendors in real time. 

Try UpGuard free for 7 days.

5. Provide Staff Training

The COVID-19 pandemic forced many organizations to adopt work-from-home (WFH) models, which have since remained. This transition to remote working increased the number of endpoints operating on workplace networks, such as personal phones and laptops. Introducing these additional attack vectors expands the attack surfaces and creates security inconsistencies, as admins do not have direct control over personal device settings. 

Your organization’s information security policy should include staff education initiatives to keep all employees informed on security requirements. Training should cover a variety of topics, such as:

  • Social Engineering Tactics: Educates staff about common social engineering cyber attacks, such as phishing and spear phishing
  • Clean Desk Policy: Ensures all work technology and material are either taken away or stored securely outside work hours. 
  • Acceptable Usage: Sets forth what employees can and cannot use/access on work devices and the network. 

Learn how to set up secure WFH practices. 

6. Assess Compliance Regularly

Organizations must send routine security questionnaires to ensure high-risk vendors, such as SaaS providers, are complying with all necessary regulatory requirements. Manually recording hundreds of responses and tracking each vendor’s compliance status is an incredibly time-consuming process.

UpGuard’s pre-built questionnaire library includes templates for widely-adopted cybersecurity regulations and frameworks, like GDPR, ISO 27001, PCI DSS, NIST Cybersecurity Framework, and more. Organizations can map questionnaire responses to each framework’s requirements to validate vendor compliance and request prompt remediation of identified areas of non-compliance. 

Try UpGuard free for 7 days.

7. Consider Fourth-Party Risk

Your vendors generate third-party risk – and so do their vendors. Popular SaaS providers use hundreds to thousands of critical vendors, adding another layer of complexity to the already tedious third-party ecosystem.

Identifying your fourth-party vendors can be difficult as it’s often up to your service providers to disclose them. Maintaining an accurate inventory requires constant revision and back-and-forth with your vendors. 

UpGuard automatically discovers an organization’s most common fourth-party vendors, providing continuous monitoring across the entire supply chain attack surface. 

Try UpGuard free for 7 days.

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