The Do’s and Don’ts of Managing Sensitive Data in the Cloud [A Complete Checklist for MSPs]

An illustration features a person in a green shirt sitting atop a pink cloud, engrossed in their laptop. Surrounded by red warning signs with exclamation marks, they navigate a dark, circuit-lined background—perfectly capturing the delicate balance of handling sensitive data.

Key takeaways

  • Visibility is essential: Without knowing where sensitive cloud data resides or who can access it, securing it becomes difficult and breach risk increases.
  • Access controls matter: Excess permissions, inactive accounts, third-party access, and shadow IT can expose sensitive data if left unmanaged.
  • Protect all data: Encrypt both data at rest and data in transit to reduce unauthorized access and transmission risks.
  • Follow security best practices: Apply least privilege, review permissions regularly, enforce MFA, remove inactive users, and secure cloud storage configurations.

Do You Know Where Sensitive Data Resides?

Do you know where all sensitive data resides within your organization, or more importantly, where it resides in your customers’ clouds? Those unauthorized access controls, excess permissions, inactive users, or misconfigured S3 storage buckets could be exposing terabytes of critical data by the minute. 

Research showed that more than 30% of cloud data assets contain sensitive information. But that’s where the problem begins for a busy MSP. Without clear visibility into where sensitive data resides or how it’s being accessed, securing it becomes nearly impossible, often resulting in a massive breach. 

That’s why we put this checklist together on The Do’s and Don’ts of Managing Sensitive Data in the Cloud. But first, do you know who has access to what?

Securing Data in the Cloud: Who Has Access to What? 

According to research conducted by Microsoft Security in their 2023 State of Cloud Permissions Risks Report, found that over 45% of organizations have AWS access keys that have not been rotated for at least months. The report also found that 40% of identities are inactive in AWS environments.

Let that sink in for a moment. 

How can MSPs determine who has access to which type of data across multiple cloud platforms and ensure it remains secure? 

Now factor in third parties. 

Third parties may have unmanaged access permissions that are out of your scope. Any of those permissions can provide a backdoor for attackers to exfiltrate sensitive data. 

And the risks aren’t only limited to cloud environments…

MSPs must constantly worry about shadow IT, where employees use unauthorized cloud services and other SaaS applications without the consent or knowledge of IT. This is a big problem. 

Those unauthorized cloud accounts and user roles can bypass security protocols (assuming they’ve been implemented) and leave your attack surface completely vulnerable. Even the most “harmless”-looking Chrome extension, such as Grammarly, can bring about major security threats since it has access to documents that contain financial transactions, proprietary information, and other PII. 

Once you agree to those terms, your data becomes vulnerable to those third parties. Those terms of service are often long, complex, and difficult to fully understand, making it easy for employees to overlook the risks associated with granting access.

Sure, data privacy laws have become more strict, but they can’t protect you from the risks posed by unauthorized access if you don’t know where sensitive data resides. 

Data at Rest vs. Data in Transit

In order to secure data, you first need to have a better understanding of the different types of data. 

Data at rest refers to data that is stored and not actively being transmitted or processed, such as in databases, file servers, or cloud storage. 

Data in transit or in motion, on the other hand, refers to data that is being transmitted from one location to another, such as emails or cloud-based API calls. 

All data, whether at rest or in transit, should be secured using strong encryption. This prevents unauthorized access to stored files on servers or cloud services (data at rest) and mitigates risks such as Man-in-the-Middle (MITM) attacks during transmission (data in transit).

The Do’s and Don’ts of Managing Sensitive Data in the Cloud [Complete Checklist]

Access permissions should be limited by default. But this is the part that gets tricky for MSPs.

Why?

Because an MSP may not be fully aware of how many permissions and identities are circulating within cloud environments. When was the last time your team conducted a comprehensive review of user permissions and roles across all cloud platforms? 

A month ago? A year? Longer?  

Now multiply those accounts, permissions, and identities when dealing with multiple clients simultaneously, and it’s not so hard to imagine that a data breach is only a single account login away. Research taken from Google Cloud’s 2023 Threat Horizons Report found that 86% of data breaches involve stolen credentials.

So, yeah, the threats are very real. No need to fall into that trap. 

Below are the most common cloud risks, along with best practices you can implement to prevent them and secure sensitive data.

Cloud RiskGuardz Best Practices 
Excessive access permissions– Implement the principle of least privilege across all cloud accounts
– Conduct periodic audits of user permissions 
– Provide temporary access to sensitive resources and revoke access immediately after the task is completed
Inactive identities – Remove inactive users from cloud accounts, such as employees who have left the organization or third parties whose contracts have expired
– Enforce multi-factor authentication (MFA) across all cloud accounts 
– Monitor privileged accounts closely and deactivate those that are inactive for excess periods of time (30-60 days).
Cloud storage misconfigurations (e.g. S3 buckets left public) – Restrict public access to storage buckets – this is absolutely essential
– Regularly rotate access keys and secrets every 90 days
– Enable versioning for cloud storage objects and establish regular backup procedures
Third parties – Conduct thorough cybersecurity risk assessments and audits 
– Implement access controls for third party data sharing 
– Define roles and responsibilities in security contracts, including who is responsible for securing your data (shared responsibility model)
– Ensure that third parties meet compliance regulations and ask to see updated certifications (e.g. GDPR, HIPAA, ISO 27001)


But there’s a better way to manage sensitive data in the cloud. 

Keep All Sensitive Cloud Data Secured with Guardz 

Who has cloud access permissions to critical data? Don’t wait until an account gets compromised to find out. 

Guardz examines all digital assets within the customer cloud environment by scanning files and folders for excessive sharing permissions, misconfigurations, and other types of risky user behavior that can lead to a breach.

Prevent compromised credentials with Guardz cloud DLP and unified cybersecurity platform. 

See where all sensitive data resides across your organization and client cloud environments. 
Speak with one of our experts today.

Categories:

Jordan is a Cybersecurity Content Creator and community builder. He has written for many cybersecurity companies and knows more stats about a data breach than IBM.

Frequently Asked Questions

Limiting users to only the permissions they need dramatically reduces the impact of stolen credentials and insider mistakes.

  • Replace permanent administrator access with just-in-time privileged access whenever possible.
  • Review dormant accounts, service accounts, and third-party identities every 30–60 days.
  • Require MFA for every privileged account without exception.
  • Automatically revoke temporary permissions once projects or vendor engagements end.

Learn more about identity-focused cloud security.

Non-human identities often accumulate excessive privileges and long-lived secrets, making them attractive persistence mechanisms for attackers.

  • Rotate API keys, certificates, and access tokens automatically instead of manually.
  • Monitor service accounts for unusual geographic access, privilege changes, or unexpected API activity.
  • Apply least privilege to workloads just as rigorously as human users.
  • Inventory every application integration to eliminate orphaned credentials after projects end.

Find out how attackers leverage over-permissions.

Standardization and continuous automation are far more effective than relying on periodic manual reviews.

  • Build baseline security policies that can be consistently applied across every tenant.
  • Continuously detect configuration drift instead of relying on annual audits.
  • Prioritize remediation using risk scores that combine exposure, identity privileges, and data sensitivity.
  • Generate executive compliance reports automatically to demonstrate ongoing security improvements.

Guardz continuously discovers risky cloud configurations, excessive sharing, identity weaknesses, and sensitive data exposure so MSPs can remediate issues proactively.

  • Detect excessive sharing permissions across cloud files and folders.
  • Identify risky user behavior and cloud misconfigurations continuously.
  • Surface sensitive data locations across customer environments from a unified platform.
  • Prioritize remediation based on security impact instead of isolated alerts.

Learn more about Guardz’s unified cybersecurity platform built for MSPs.

Subscribe to
Our Newsletter.

Abstract image of two overlapping shield shapes, one dark blue and one green, with a soft glowing effect on a light background—perfect for enhancing your single post template with a modern, secure aesthetic.
Abstract image with a large dark blue, semi-circular shape overlapping a bright green, glowing circular shape on a light gray background. Perfect for enhancing your single post template, the green circle appears partially blurred and luminous.

Keep your clients secure.

A stylized, dark blue shield icon with a green gradient glow on the right side, set against a light gray background—ideal for enhancing your single post template design.

Continue Reading

A hooded hacker attacks with digital code while a warrior inspired by Kratos defends with a shield, blocking access to credentials and security icons, symbolizing cybersecurity defense in a game-like battle.

Inside Kratos PhaaS

How MSPs Monitor Security Across Multiple Client Tenants

Green digital code streams down a black screen, resembling the iconic Matrix movie effect, with various symbols, letters, and numbers appearing in vertical columns—evoking the intricate workflows of MSPs managing cybersecurity in a multi-tenant model.

Cynet Alternatives for MSPs: 6 Platforms That Actually Fit the Multi-Tenant Model

A person in a futuristic chair sits at a high-tech control panel, looking out at a starry space scene with planets and mountains. The dashboard glows with colorful buttons and screens, like the perfect single post template for exploring new worlds.

Guardz, Your Cybersecurity
Co-Pilot for MSPs

Demonstrate the value you bring to the table as an MSP and gain visibility into your clients’ external postures.

Holistic Protection.
Hassle-Free.
Cost-Effective.
Slack
Slack
Chat with us No Slack account needed.