Since the pandemic, SaaS security risks have become a growing concern for businesses. It seems like every week, we hear about another major breach hitting a well-known application. You’ve probably heard the names, like Microsoft or Salesforce. It makes us really wonder, “How secure are our systems?” This isn’t just about tech issues; it’s about real-world impacts like data theft, business disruptions, and even identity fraud.
The numbers tell a concerning story: while SaaS adoption accelerates, SaaS risk management struggles to keep pace. For example, data breaches and leakage account for over 50% of reported incidents, with gaps in governance and visibility enabling these risks. Furthermore, shadow SaaS—unauthorized apps used without IT oversight—amplifies these challenges, with up to 50% of an organization’s SaaS environment posing visibility issues.
As Gartner predicts, 75% of employees will use technology outside IT’s purview by 2027, so organizations must rethink their security frameworks. To secure the future, adopting identity-centric approaches and robust SaaS Security Posture Management (SSPM) solutions can provide the needed oversight.
Table of Contents
ToggleType of SaaS Security Risks
Misconfigurations
Misconfigurations are a silent threat to cloud application security. When settings are left unchecked, such as open access permissions or improper identity and access management (IAM), businesses inadvertently expose sensitive data.
A single misstep can result in unauthorized access or data leaks. In fact, the “Annual SaaS Security Survey Report 2025” highlights that a whopping 65% of organizations struggle with fixing these SaaS misconfigurations. The real challenge lies in scale—medium-sized companies use an average of 582 SaaS apps. This complexity increases the risk of unnoticed misconfigurations.
For your first reference, kindly read “How SMBs Can Navigate the Complex World of Security for SaaS Applications.”
Shadow IT
Shadow IT takes SaaS security risks to another level by operating outside organizational oversight. Employees often turn to unapproved tools for convenience, leaving IT teams unaware of potential vulnerabilities. Shockingly, up to 50% of an organization’s SaaS environment lacks visibility, exposing critical gaps in data protection. Even more alarming, 21% of businesses have experienced cyber events linked directly to shadow IT.
These many shadow IT risks often arise from poor integration with authorized IAM frameworks and the absence of robust data loss prevention (DLP) controls. Addressing shadow IT requires smarter visibility tools and proactive security measures to close these dangerous gaps.
Insecure APIs
Insecure APIs are a critical weak spot of data protection in SaaS. APIs act as bridges between applications, and if they’re not secure, they can become entry points for hackers. A compromised API security isn’t just a minor glitch—it can disrupt the entire service.
A Systematic Review of Security Threats and Countermeasures in SaaS highlights that an API attack can undermine the availability of a service, creating a domino effect that impacts the whole system. It’s a stark reminder that securing every connection is essential to maintaining the integrity of the larger SaaS ecosystem.
Data Breaches
Data breaches remain a top concern for SaaS platforms, making up 52% of reported security incidents. While the overall incident rate has dropped from 53% to 25%, the risk is far from eliminated. There are a number of issues to consider, but ultimately, it comes down to compromising customer trust and causing substantial financial losses.
With enterprises managing over 1,400 apps on average, safeguarding data in such sprawling environments is a constant challenge. Weak IAM practices and gaps in DLP controls only heighten the risk, emphasizing the need for robust security strategies that can keep pace with SaaS complexities.
If you really need to get a grip on shadow IT, kindly read “What is Shadow IT? An Outlook for IT Management in 2025.”
Phishing Attacks
Phishing attacks are a deceptive game of trickery, where attackers manipulate users into giving away their credentials. By exploiting human vulnerabilities, phishing becomes a key entry point for compromising SaaS environments.
These attacks often deploy fake emails or links to bypass endpoint security for SaaS. The Annual SaaS Security Survey Report 2025 highlights that 38% of organizations view malicious applications as a top security concern, while 44% report unauthorized access—often stemming from phishing—as a significant issue.
With 52% of incidents involving data breaches and 50% data leakage, phishing’s impact is undeniable. Cloud access security brokers (CASBs) play a crucial role, detecting suspicious activity and applying conditional access policies to reduce these risks. Predictive analytics in security information and event management (SIEM) systems also help by identifying unusual behavior patterns, providing an additional layer of defense against evolving phishing tactics.
Insider Threats
Insider threats, whether intentional or accidental, pose a growing challenge in SaaS security risk management. Employees with high access privileges can unintentionally or deliberately leak sensitive data, underscoring the importance of strong endpoint security for SaaS.
Research by Díaz de León Guillén et al. shows how insider threats often exploit shared SaaS resources to uncover data vulnerabilities. Cloud access security brokers (CASBs) provide critical safeguards by enforcing granular controls over data access and usage. To stay ahead of these risks, organizations should leverage SIEM systems to monitor user activity in real time, flagging anomalies like unauthorized downloads before they escalate into serious breaches.
Compliance Violations
Compliance violations are a major concern for organizations navigating the complex rules governing data handling, particularly in SaaS environments. Failing to meet compliance standards can result in hefty fines, legal issues, and reputational damage.
And it is not only us; many organizations struggle to align their SaaS configurations with compliance requirements. However, those leveraging SaaS Security Posture Management (SSPM) tools are seeing better outcomes. This highlights the importance of adopting the right solutions to simplify compliance, reduce risks, and keep your organization on the right side of the law.
For further information on specific tactics to address and prevent security breaches, please refer to “10 IT Security Framework & Explanation.”
Account Hijacking
Account hijacking happens when attackers steal credentials to take over SaaS accounts, a threat ranked among the top three risks for cloud applications by the Cloud Security Alliance. Once inside, they can manipulate sensitive data or spread malicious apps, causing significant damage.
Tools like CASBs and endpoint security for SaaS play a crucial role by enforcing multi-factor authentication and identifying suspicious login patterns. Advanced SIEM systems add another layer of protection, analyzing log data to detect signs of compromise. As SaaS adoption continues to rise, prioritizing user behaviour analytics is key to minimizing the risks of account hijacking.
DDoS Attacks
DDoS attacks, or Distributed Denial of Service attacks, are like creating a massive digital traffic jam—attackers overwhelm systems with excessive traffic, rendering them inaccessible to legitimate users. The Systematic Review of Security Threats and Countermeasures in SaaS notes that traditional firewalls and network intrusion prevention systems often fall short in handling these attacks.
This underscores the importance of application-level defences, which are critical in SaaS environments reliant on internet-based operations and shared resources. Additionally, SaaS applications hosted on cloud infrastructure face heightened vulnerability, making robust, cloud-specific mitigation strategies a must to maintain service availability and user trust.
For your shadow IT outlook in near future, kindly check “Future of Shadow IT Management: Strategies for 2025.”
Mitigation Strategies for SaaS Security Risks
Mitigating SaaS security risks demands a multi-layered approach to tackle vulnerabilities like shadow IT and compliance challenges. A standout solution is leveraging tools like Octobits for your SaaS shadow IT management. With Octobits, you can enhance visibility by identifying unauthorized applications, monitoring inactive user accounts, and offering centralized dashboards for compliance checks. This proactive approach keeps organizations aligned with regulatory requirements while minimizing the risk of breaches caused by unapproved tools.
Endpoint security for SaaS is equally critical, protecting devices from unauthorized access. When paired with multi-factor authentication and role-based permissions, it limits exposure to both internal and external threats. Advanced CASBs add another layer of defense by providing fine-grained control over data access, ensuring sensitive information remains secure across platforms.
And as we mentioned earlier, compliance in SaaS security is an ongoing challenge, especially with regulations like GDPR and CCPA requiring constant oversight. Therefore, Octobits simplifies this with automated compliance checks, ensuring SaaS configurations meet legal standards while fostering trust with stakeholders.
As SaaS adoption continues to grow, integrating SIEM systems with tools like Octobits enables real-time threat monitoring and detection. These systems identify anomalies early, preventing potential escalation. Together, these strategies build a comprehensive defense, balancing operational efficiency with strong SaaS security.
Article Sources
Octobits relies on primary sources to inform their work, such as white papers, government statistics, firsthand reporting, and interviews with industry professionals. Additionally, we use original research from other trusted publishers when relevant.
- Adaptive Shield. (2024). 2025 SaaS Security Risks Report. Adaptive Shield.
- Retrieved from https://www.adaptive-shield.com/landing-page/the-annual-saas-security-survey-report-2025-ciso-plans-and-priorities/
- Díaz de León Guillén, M. Á., Morales-Rocha, V., & Fernández Martínez, L. F. (2020). A systematic review of security threats and countermeasures in SaaS. Journal of Computer Security, 28(4), 635–653. https://doi.org/10.3233/JCS-200002
- Axonius. (n.d.). Navigating the Complexity of SaaS Management. Axonius.
- Retrieved from https://www.axonius.com/resources/navigating-complexity-saas-management