If your organization is like many companies, your employees use dozens of software-as-a-service applications on a daily basis. The average enterprise uses nearly 400 SaaS products, from payment processing platforms to CRM tools. Third-party apps provide important productivity and efficiency benefits, but they can also be your organization’s Achilles’ heel if you’re not careful. Anticipating and mitigating SaaS security risks is vital for effective risk management.
Why Are SaaS Security Risks a Threat to Enterprises?
Cybersecurity defenses are only as strong as the weakest link. It doesn’t matter how many locks and alarms a building has if one of the employees accidentally leaves a door wide open. Similarly, unsecured SaaS can give bad actors access to otherwise robust enterprise systems:
- Software supply chain attacks caused nearly $60 billion in damages in 2025.
- Nearly half of enterprises will experience a cyberattack involving third-party software by the end of 2025.
- Vendor-related cyberattacks increased by 430% between 2021 and 2023.
In 2024, a data breach at cloud platform Snowflake impacted AT&T, Santander Bank, Ticketmaster, and over 100 other customers. This highlights the need to include SaaS vendors in your risk prioritization calculations.
What Are the Most Common SaaS Security Risks?
Applications can introduce cybersecurity risks to enterprise systems through human error, misconfiguration, design vulnerabilities, and cyberattacks.
1. API Vulnerabilities
The complexity of API communication layers increases the risk of bugs, errors, and vulnerabilities. In 2024, the most common software weaknesses included:
- Cross-site scripting
- SQL injections
- Code injections
- Privilege escalation abuse
- Server-side or cross-site request forgeries
- Missing authentication features
These vulnerabilities can bypass normal password protections. A privilege escalation flaw might allow cybercriminals to use low-level credentials to obtain administrator access to platform configuration settings.
2. Inherited Code Risks
Bootstrapped SaaS tools often source resources from open source libraries. This saves time, but it can lead to unexpected security risks if the source code isn’t updated and maintained to current standards.
In 2021, this type of vulnerability in the Apache Log4j code repository caused catastrophic risks to global businesses. This extensively used plug-in gave cyberattackers complete control over connected devices, eventually impacting over 30% of businesses with Log4Shell software.
3. Outdated Software, Legacy Systems, and IoT Devices
Software platforms can get less secure over time if the company offering them stops offering security updates and support. This is especially common with manufacturing equipment, outdated on-prem servers, network infrastructure (e.g., routers), physical security systems, and IoT devices.
4. Vendor Security Misconfigurations
Software vendors are only as reliable as their personnel and security practices. Data breaches have happened before because of inexperienced technicians pushing updates with improper access control restrictions, plaintext files, private folders marked public, and similar vendor risks.
5. User Security Errors
Even highly trusted SaaS platforms with an excellent reputation can become vulnerable if users don’t enable correct safeguards. One of the most important settings — and the most common SaaS security risks — is not setting up MFA for admin controls. This is why organizations need experienced IT professionals to install and set up any SaaS tools.
6. Zero-Day Vulnerabilities
Not all SaaS security flaws are the result of careless programming or poor vendor practices. Any type of code can have vulnerabilities that are unknown to current cybersecurity researchers.
Even Google was caught by surprise when cybercriminals targeted the Chrome browser in 2022 with a zero-day exploit that allowed for remote code execution. Patching announced vulnerabilities ASAP is vital.
7. Incorrect Integrations With In-House Software Architecture
One of the most common enterprise-level risks for SaaS involves patchwork code designed to integrate new tools with your existing software. Improperly configured connections can be vulnerable to breaches.
8. Unencrypted Files
Unless your company is required to store sensitive information in a searchable database (usually for legal reasons), all software should use strong encryption. Data must be encrypted both at rest and in transit to prevent threats such as man-in-the-middle attacks.
9. Insider Threats
Not all employees are trustworthy. SaaS systems can be exposed to insider threats on the client side and the vendor side. Some data exposures are accidental, and others involve deliberate theft by employees with access permissions.
10. Shadow SaaS Applications
Shadow IT is the practice of employees secretly installing their own apps on company systems or devices that connect to the network. If the app contains malware, employees can unwittingly expose customer info, passwords, legal and financial information, and proprietary info this way.
11. Fourth-Party Security Risks
You can evaluate a vendor’s security practices through audits and credentials, such as ISO 27001 certification. But what if the SaaS developer outsources work to contractors or uses plug-ins? It’s hard to have oversight with these fourth-party risks.
12. Software Supply Chain Risks
Phishing attacks, data breaches, and ransomware attacks can affect software vendors, too. Now that so much of business involves cloud infrastructure, any supply chain breaches can directly impact your data, network, and connected operations.
13. Poor Reporting or Visibility of Threat Events
Without proper enterprise risk management for SaaS, data breaches that affect third-party software partners can be devastating. This is because there is often a significant delay between the event and when your organization learns about it.
Vendors may hesitate to inform customers of the breach. Or the business may not even realize it had a breach until weeks later.
How Can You Improve Risk Management for SaaS?
Online platforms will always have to fight against cybercriminals, insider threats, and human error. Winning the battle is no longer a question of completely avoiding vulnerabilities. Instead, your organization needs a multi-layered approach to enterprise risk management for SaaS:
- Zero-Trust Architecture
- Vendor management
- Network and system monitoring
- Vendor compliance platforms
There’s no way to avoid SaaS security risks completely, but you can mitigate them by implementing a GRC framework that follows cybersecurity best practices.
Maximum Visibility for SaaS Security Risk and Vendor Management
Being in the dark exposes your organization to greater security risks from SaaS. Compyl provides vendor compliance tracking for clear insight into SaaS security practices.
Maintain an organized inventory of software partners by risk and priority. Improve your organization’s supply chain security with an advanced risk management solution for enterprises. Request a quote today.
