The Complete Guide to Privileged Access Management (PAM)

Discover the power of Privileged Access Management (PAM): protect your privileged credentials, enforce Least Privilege policies, and stay ahead of cyber threats. 

Learn how PAM reduces attack surfaces, prevents data leaks, and strengthens your cybersecurity strategy.

Key Takeaways from this Article:

1. What PAM Is and Why It Matters
   See how PAM technology protects privileged credentials, minimizes risks, and builds a more secure IT environment.
2. The Risks of Unsecured Privileged Accounts
   Learn how poorly managed privileged credentials can lead to breaches, ransomware, and costly compliance failures.
3. How PAM Platforms Protect Against Cyber Threats
   Explore key features like encrypted vaults, real-time monitoring, and automated password rotation.
4. Signs Your Organization Needs PAM
   Understand the red flags that indicate it’s time to implement Privileged Access Management software.
5. PAM Best Practices for Maximum Protection
   Gain actionable tips on implementing least privilege policies, managing access lifecycles, and securing third-party credentials.
   

Cyberattacks occur at an alarming rate of over 2,200 times daily, with someone falling victim every 39 seconds.

Imagine a large organization tasked with safeguarding millions of customer accounts, like a bank or a hospital. These systems rely on privileged credentials—high-level accounts with the power to manage critical settings and sensitive data. But with shared passwords, unchecked permissions, and little oversight, these accounts become a prime target for attackers.

A single compromised account can grant access to sensitive systems, allowing attackers to move through the network, putting customer data and operations at risk. Without strong controls, breaches can go undetected for 194 days—the average time to identify one—and cost businesses an average of $4.88 million in damages.

With Privileged Access Management (PAM), this scenario changes entirely. 

PAM technology secures credentials in encrypted vaults, enforces the principle of least privilege to minimize unnecessary access, and monitors every privileged action in real time. Vulnerabilities are replaced with control, helping organizations build a safer, more resilient environment.

The example above highlights why implementing PAM is a necessity—it’s not just about managing access; it’s about defending against today’s most advanced cybersecurity threats. 

In this guide, we’ll dive into what PAM is, why it’s essential, and how it safeguards your most critical assets.

What is Privileged Access Management (PAM)?

Privileged Access Management (PAM) is a sophisticated cybersecurity technology designed to secure, manage, and monitor privileged accounts across your IT environment. 

Unlike general identity management solutions, PAM specifically focuses on privileged accounts that grant elevated permissions—the digital keys to your organization’s most critical systems.

PAM works as a centralized software platform that enforces strict access controls, stores credentials in encrypted vaults, and monitors privileged activity in real time. By leveraging advanced automation and analytics, PAM ensures that only authorized users access sensitive resources, reducing the risk of breaches and operational disruptions.

Think of PAM as the ultimate gatekeeper: not just controlling who can enter, but also watching what they do and ensuring their actions align with organizational policies.

Why Are Privileged Credentials So Critical?

Not all accounts are created equal. Privileged credentials provide elevated permissions to users, granting them the power to:

• Modify system configurations that affect entire infrastructures.
• Access sensitive business or customer data.
• Create, manage, or delete user accounts.
• Install or modify essential software.

When these credentials are poorly managed, they become a major liability. Weak or reused passwords, shared accounts, and a lack of oversight create openings for cybercriminals. In fact, 71% of year-over-year cyberattacks in 2024 involved stolen or compromised credentials. 

These vulnerabilities can lead to:

• Data leaks that expose sensitive information and harm customer trust.
• Ransomware attacks that halt operations and result in significant financial losses.
• Compliance failures that can incur heavy fines and penalties.

The power of privileged credentials is a double-edged sword—they enable critical IT functions but also pose serious risks if left unmanaged.

How Does PAM Mitigate These Risks?

Privileged Access Management (PAM) addresses the inherent risks of privileged accounts by combining robust controls with full visibility. By managing how credentials are accessed, used, and monitored, PAM minimizes opportunities for misuse and creates a secure framework for managing sensitive systems. 

Here’s how PAM protects privileged credentials:

1. Credential Vaulting: PAM secures privileged credentials in encrypted vaults, ensuring they’re accessible only to authorized users when needed.
2. Session Monitoring and Auditing: Every privileged session is monitored and logged, offering IT teams the ability to track activities in real time and perform detailed audits.
3. Just-in-Time (JIT) Access: Rather than granting continuous access, PAM enforces temporary permissions for specific tasks, reducing potential misuse.
4. Automated Password Rotation: Passwords are automatically updated after each use or at regular intervals, reducing the risk of exposure.

These capabilities make PAM software a critical component for protecting privileged accounts, controlling access, and ensuring all activities are traceable.

Why is Privileged Access Management Essential?

PAM isn’t just a powerful tech tool—it can also act as a strategy that protects organizations from operational disruption, regulatory penalties, and reputational harm.

Here’s why PAM is indispensable:

• Protects Privileged Credentials: Privileged credentials are a primary target for attackers, with 68% of breaches involving a human element. PAM secures these accounts by encrypting passwords, rotating them regularly, and monitoring all access attempts.
• Reduces the Attack Surface: PAM enforces least privilege principles, ensuring users only access resources necessary for their roles. This limits lateral movement within networks, even if an account is compromised.
• Mitigates Insider and External Threats: Insider threats, whether malicious or accidental, account for 88% of breaches. PAM detects and flags unusual activity in real time, helping organizations respond quickly.
• Simplifies Compliance: Regulations like GDPR and HIPAA require detailed records of privileged activities. PAM automates session logging and audit preparation, reducing compliance burdens.

The 7 Different Types of Privileged Accounts

Privileged accounts are the backbone of any IT infrastructure, enabling critical operations like system configuration, user management, and data backups. 

However, they’re also one of the biggest cybersecurity risks. These accounts, with their elevated permissions, are prime targets for attackers looking to infiltrate networks, access sensitive data, and move laterally without being detected.

What makes privileged accounts even riskier is that they’re often poorly managed. 

Shared credentials, weak passwords, and a lack of monitoring are common issues, creating a perfect storm for cyber threats. While many assume privileged accounts are tied to specific people, they often belong to applications, services, or devices, which makes managing them even more complex.

To safeguard your organization, it’s critical to understand the different types of privileged accounts and their unique risks:

1. Local Administrator Accounts: Used for configuring devices but often share passwords across platforms, making them easy targets for attackers.
2. Privileged User Accounts: Regular user accounts with elevated permissions. Shared usage and poor monitoring make them vulnerable to misuse.
3. Emergency Accounts: Enabled during critical incidents but rarely monitored, increasing their susceptibility to exploitation.
4. Domain Administrator Accounts: The most powerful accounts in an IT environment. If compromised, they grant attackers unrestricted access.
5. Service Accounts: Used by applications to interact with operating systems. Static credentials often leave them vulnerable.
6. Application Accounts: Facilitate communication between applications. Poor management can expose critical data.
7. Domain Service Accounts: Perform essential tasks like backups and updates. Their complexity often leads to neglected security measures.

Each of these privileged account types plays a critical role in daily operations, but their risks can’t be ignored. From enabling attackers to infiltrate systems to causing compliance failures, unmanaged privileged accounts can wreak havoc on an organization.

How Does a Privileged Access Management Solution Work?

Privileged Access Management (PAM) platforms are purpose-built to secure and manage privileged accounts, ensuring that only authorized users can access and interact with sensitive systems. 

PAM software operates as a central hub for protecting elevated credentials, offering critical functions like access control, monitoring, and auditing.

Credential Vaulting

At the core of PAM technology is the secure storage of privileged credentials. Encrypted vaults replace scattered spreadsheets, plaintext files, or other insecure storage methods, ensuring credentials are safe from unauthorized access.

Access Control and Least Privilege

PAM enforces the principle of least privilege by limiting user access to only what is necessary for their role or task. By implementing features like Just-in-Time (JIT) access, organizations can provide temporary permissions, reducing the risk of over-provisioning or abuse.

Session Monitoring and Auditing

Every privileged session is tracked in real time. Actions like system configuration changes, database queries, or software installations are logged, allowing security teams to investigate incidents and maintain compliance with audit requirements.

Automated Password Management

Static passwords are a security risk, but PAM platforms address this by automatically rotating passwords and SSH keys after use or at regular intervals. This ensures credentials remain secure and reduces the likelihood of reuse or exploitation.

By combining these functions, PAM software transforms privilege management into a proactive approach, securing critical accounts and ensuring operational resilience.

What Are the Main Features of a Privileged Access Management Solution?

A modern PAM platform offers a wide range of features designed to protect privileged accounts and maintain control over IT environments. These include:

• Centralized Credential Repository: A secure, encrypted vault to store all privileged credentials, reducing the risk of scattered or improperly stored passwords.
• Role-Based Access Control (RBAC): Permissions are assigned based on roles, ensuring that users can only access resources relevant to their responsibilities. This reduces unnecessary privileges and supports compliance.
• Real-Time Session Monitoring: Security teams can view privileged sessions live, tracking user activity for suspicious behavior. Detailed session logs enable forensic investigations and regulatory compliance.
• Just-in-Time (JIT) Access: Temporary permissions are granted for specific tasks, automatically expiring after completion to minimize the risk of misuse.
• Automated Credential Management: PAM solutions handle password and key rotation automatically, ensuring credentials are always secure and reducing the risk of stale or reused passwords.
• Audit and Reporting Tools: Comprehensive reports and logs provide detailed insights into privileged activities, helping organizations meet compliance standards like GDPR or HIPAA.
• Seamless Integration: PAM integrates with IT tools like Active Directory, ServiceNow, and SIEM solutions to enhance workflows and centralize visibility across the organization.
• Scalability: Effective PAM solutions are designed to protect privileged accounts across on-premises, cloud, and hybrid environments, accommodating growing infrastructures.

Through its architecture, senhasegura provides a centralized access point for critical systems. Its features strengthen access control by restricting user permissions to only what is necessary for their roles, fully adhering to the principle of least privilege.

Types of PAM Tools: Which Privileged Access Solution Fits Your Needs?

Privileged Access Management (PAM) solutions are categorized into three primary tools, each designed to address specific aspects of managing privileged accounts.

These tools work together to secure sensitive credentials, control user permissions, and protect critical systems. Here’s a breakdown:

Privileged Account and Session Management (PASM)

PASM focuses on managing and monitoring privileged accounts and sessions in real time. Think of it as the guardian of sensitive credentials and privileged activities. Every access request is tracked, every session is logged, and credentials are securely stored and rotated.

Key capabilities of Privileged Account and Session Management (PASM) solutions include:

• Real-Time Monitoring: Track privileged sessions live to detect and stop suspicious activities immediately.
• Credential Vaulting: Store passwords, private keys, and account credentials in an encrypted vault to prevent unauthorized access.
• Remote Session Management: Enable secure access to systems by routing privileged actions through controlled remote sessions.
• Automated Password Rotation: Reduce the risk of stale credentials by updating passwords after each use or on a set schedule.
• Audit Trails: Generate detailed reports on privileged account activities, helping organizations meet compliance requirements.
• Session Recording: Record and archive privileged sessions for review, audits, or forensic investigations.
• Access Control for Shared Accounts: Secure shared accounts with multi-factor authentication (MFA) or additional approval workflows.

PASM is essential for creating accountability and ensuring that privileged activities are visible and controlled across your organization.

Privileged Elevation and Delegation Management (PEDM)

PEDM takes a different approach by granting permissions based on the user’s role and the specific tasks they need to perform. Instead of giving broad, continuous access, PEDM enforces the principle of least privilege, ensuring users can only access what’s necessary for their role.

Highlights of PEDM include:

• Granular Role-Based Access: Assign specific privileges to users, tailoring access to their responsibilities.
• Task-Based Elevation: Grant elevated permissions temporarily to complete specific tasks, minimizing long-term risks.
• Process and Application Control: Restrict which applications or processes users can interact with, adding another layer of security.
• Session Control: Monitor and manage privileged activities tied to elevated permissions in real time.

By focusing on task-specific access, PEDM minimizes the attack surface and reduces the risk of privilege abuse, whether intentional or accidental.

Secrets Management

Secrets Management goes beyond user accounts to secure machine and application credentials, such as passwords, SSH keys, API tokens, and OAuth tokens. These credentials, often referred to as "secrets," are critical for communication between systems and applications.

Core features of Secrets Management include:

• Centralized Storage: Securely store secrets in an encrypted repository, accessible only by authorized systems or users.
• Automated Management: Rotate and manage secrets automatically to reduce the risk of exposure.
• Visibility and Tracking: Monitor how secrets are used across your environment to detect misuse or anomalies.
• Integration with Cloud Environments: Protect credentials used in cloud applications, ensuring compliance with security regulations.
• Compliance Support: Help organizations meet standards for data protection and cybersecurity by managing secrets effectively.

Secrets Management is particularly important in DevOps environments, where automation and integration rely heavily on the secure use of machine credentials.

What is the difference between PAM and IAM?

Identity and Access Management (IAM) and Privileged Access Management (PAM) platforms both play important roles in securing an organization’s data, but their capabilities differ significantly—and PAM is essential to filling the gaps that IAM leaves behind.

IAM: Manages User Access

IAM software is designed to manage the access rights and identities of all users across an organization. It simplifies user onboarding, automates access provisioning, and enforces authentication methods like single sign-on (SSO) and multi-factor authentication (MFA).

PAM: Protects Privileged Access

PAM addresses the vulnerabilities inherent in IAM by offering granular control over privileged accounts. It doesn’t just grant access; it monitors and manages privileged sessions in real time, enforces the principle of least privilege, and provides detailed logs of every action taken. 

Unlike IAM, PAM ensures privileged access is temporary, task-specific, and auditable, minimizing the risks.

While IAM provides a strong foundation for managing access, it doesn’t offer the comprehensive oversight needed for privileged accounts. 

PAM is essential for protecting these high-risk credentials, mitigating insider and external threats, and maintaining compliance. Together, IAM and PAM create a layered security approach, but PAM is the key to safeguarding your organization’s most sensitive systems and data.

Privileged Access Management Best Practices

By implementing these best practices, IT and cybersecurity teams can minimize risk, enhance operational efficiency, and stay ahead of evolving threats:

The Principle of Least Privilege

The Principle of Least Privilege (PoLP) ensures users and applications access only the resources necessary for their tasks. By limiting access, PoLP mitigates internal threats, prevents data leaks, and restricts attackers' lateral movement within systems.

For example, an employee managing invoices doesn’t need administrative access to customer databases.

How PAM Supports PoLP:

• Restricting access to specific tasks and time frames.
• Monitoring privileged activity for anomalies.
• Notifying security teams of suspicious behavior.

This approach strengthens security and provides a clear audit trail for compliance and investigations.

The Privileged Access Lifecycle Approach

Effective privileged access management addresses the full lifecycle:

• Before Access: Identify, catalog, and manage privileged accounts and devices to reduce the attack surface.
• During Access: Monitor sessions, log actions, and detect suspicious behavior in real time.
• After Access: Audit activity logs to identify violations, ensure accountability, and comply with regulations like GDPR or HIPAA.

This lifecycle approach reduces risks and improves incident response times.

DevSecOps and PAM: Building Security Into Development

PAM plays a critical role in DevSecOps by securing sensitive data and managing access during software development.

How PAM Enhances DevSecOps:

• Secrets Management: Tracks and secures API keys, SSH keys, and embedded credentials.
• Least Privilege Enforcement: Limits developer access to only necessary resources.
• Audit Trails: Logs privileged activities for accountability and compliance.

Integrating PAM into DevSecOps enables secure, agile development without compromising efficiency.

When Should a Company Consider a PAM Solution?

In today’s complex IT environments, a lack of control over privileged access can open the door to significant security risks and operational disruptions. Without effective oversight, sensitive data can be exposed, business continuity compromised, and compliance violations become inevitable.

So, how can organizations regain control and ensure the privacy of their most critical assets? That’s where Privileged Access Management (PAM) comes in.

5 Signs That It’s Time for PAM

Here are key indicators that your organization should prioritize implementing a PAM solution:

1. Frequent Access Mismanagement: If your team struggles to track who has access to what, when, and why, it’s time to consider PAM. Unmanaged accounts or shared credentials increase the risk of data leaks and unauthorized activities. PAM provides the visibility and granular control needed to keep privileged access in check.
2. Sensitive Information at Risk: Whether it’s intellectual property, customer data, or financial records, any system storing sensitive information requires strict access controls. PAM helps protect these systems by limiting access to authorized users and monitoring their actions in real time.
3. Insider Threats or Human Errors: Most cybersecurity incidents are caused by either malicious insiders or simple mistakes. For example, employees sharing credentials or clicking on phishing links can give attackers a foothold. PAM minimizes these risks by enforcing least privilege policies and monitoring privileged sessions for unusual behavior.
4. Growing Infrastructure Complexity: As organizations expand their IT environments—adding hybrid clouds, SaaS tools, and third-party integrations—managing access becomes exponentially harder. PAM centralizes control over privileged access, making it scalable and manageable.
5. Compliance Requirements: If your business operates in a heavily regulated industry, such as finance, healthcare, or energy, compliance is non-negotiable. PAM supports compliance by creating an audit trail of all privileged activity, ensuring you can meet requirements for frameworks like GDPR, HIPAA, PCI DSS, or SOX.

Case Study: Securing Privileged Access for a Major Retail Bank

To understand the impact of Privileged Access Management (PAM), let’s look at a real-world example. One of the largest retail banks in Latin America faced significant challenges managing privileged accounts across its sprawling IT infrastructure. 

With over 30,000 privileged accounts in use, they struggled with:

• Shared and static passwords, which increased vulnerabilities.
• Minimal oversight of privileged sessions, leaving them exposed to insider and external threats.
• Compliance concerns due to the lack of detailed activity logs and audit trails.

Without strong controls, their systems were a prime target for cyberattacks, and the risk of privilege abuse jeopardized both security and compliance.

This is where senhasegura stepped in. By implementing our PAM software, the bank:

• Secured 30,000+ privileged accounts with automated password vaulting and rotation.
• Achieved a 94.4% reduction in privilege abuse, minimizing insider threats.
• Gained real-time visibility into privileged activities through session monitoring and audit trails, significantly improving their compliance posture.
• Reduced insider threats by 40%, safeguarding sensitive customer data.

The results speak volumes: with PAM, the bank was able to strengthen its defenses, regain control over privileged access, and protect millions of customer accounts.

This example highlights the transformative power of PAM—not just as a security tool, but as a strategy that enables organizations to operate with confidence in the face of rising cyber threats.

What Are the Challenges in Implementing a PAM Platform?

Implementing Privileged Access Management (PAM) can dramatically improve security, but it comes with challenges that organizations need to address effectively.

Managing and Rotating Account Credentials

Handling a large volume of privileged credentials is often a logistical challenge. Without automated password rotation, organizations risk leaving accounts vulnerable to theft or misuse, creating unnecessary security gaps.

Monitoring Privileged Sessions

Centralized monitoring is critical, but achieving visibility across on-premises, cloud, and hybrid environments can be complex. PAM tools can record and monitor sessions in real-time, but integrating these systems requires careful setup and planning.

Identifying Threats

PAM generates detailed logs and alerts, but sifting through large amounts of data can overwhelm security teams. Identifying genuine threats—especially insider risks—requires a combination of PAM tools, integration with SIEM systems, and skilled analysts.

Controlling Access in Cloud Environments

Cloud and hybrid infrastructures complicate privileged access management. Resources are dynamic, and credentials embedded in code or exposed in multi-cloud setups increase vulnerabilities. PAM must adapt to enforce least privilege principles and secure these environments effectively.

Organizations can overcome these obstacles by automating credential management, integrating PAM with existing tools, and training teams to analyze privileged activity.

With a scalable, well-configured PAM solution, businesses can secure their critical systems and reduce risks across all environments.

How to Implement Effective Privileged Access Management

Deploying a Privileged Access Management (PAM) solution is a critical step in fortifying your organization’s cybersecurity defenses. Here’s how to implement PAM effectively, ensuring minimal risk and maximum protection:

1. Isolate Privileged Access and Enforce Multi-Factor Authentication

Start by isolating all privileged accounts from standard user access. This reduces the attack surface and limits the scope of potential breaches. To add another layer of security, enforce multi-factor authentication (MFA) for all privileged accounts. MFA ensures that even if credentials are compromised, unauthorized access is nearly impossible.

2. Regularly Rotate and Vault Passwords and SSH Keys

Privileged credentials, like passwords and SSH keys, are prime targets for attackers. By vaulting them in an encrypted repository and automating regular rotation, you minimize the risk of exposure. This approach also ensures compliance with auditing and regulatory requirements by keeping a detailed history of credential use.

3. Remove Local Admin Rights to Limit Lateral Movement

Granting local admin rights to employees might seem convenient, but it creates vulnerabilities for lateral movement within your network. Enforce the principle of least privilege by removing unnecessary admin rights and granting access strictly on a just-in-time basis. This containment strategy prevents attackers from gaining further access if one account is compromised.

4. Secure Third-Party and DevOps Credentials

Third-party vendors and DevOps teams often require access to critical systems, but these accounts can introduce significant risks. Use PAM tools to manage and monitor these credentials, ensuring that access is time-limited, monitored, and tied to specific tasks. For DevOps, vault secrets such as API keys and tokens to prevent unauthorized use during development or deployment.

Effective PAM implementation isn’t a one-size-fits-all approach—it requires tailoring security practices to meet your organization’s unique needs. By isolating access, enforcing MFA, automating credential management, and securing third-party accounts, you can build a strong defense against insider and external threats.

Conclusion: Strengthen Your Security with Privileged Access Management

Privileged Access Management (PAM) is more than just a powerful cybersecurity tool—it can act as a proactive strategy that addresses one of the most critical vulnerabilities in modern IT environments: privileged accounts. 

By implementing PAM software, organizations can reduce risks from insider threats, human error, and external attackers, while ensuring compliance and operational continuity.

With the average ransomware attack now costing organizations $1.85 million, and breaches taking an average of 292 days to contain, it’s clear that reactive measures are no longer enough. PAM platforms counter these risks by securing credentials in encrypted vaults, enforcing the principle of least privilege, monitoring sessions in real time, and automating password rotation.

As we've seen throughout this guide, PAM not only mitigates risks but also enhances efficiency and accountability, creating a foundation for stronger, more resilient cybersecurity. 

By adopting a PAM solution, your organization gains the tools to defend against today’s most pressing threats and position itself for a secure future.

Why senhasegura is Your PAM Solution

When it comes to choosing the right PAM platform, senhasegura stands out as a trusted leader in the field. With rapid deployment, transparent pricing, and award-winning customer support rated 5/5 on Gartner Peer Insights, senhasegura delivers measurable results:

• 94.4% reduction in privilege abuse for one of the largest retail banks in LATAM.
• 70% lower Total Cost of Ownership (TCO) compared to other PAM solutions.
• 90% faster Time to Value, so you can secure your critical systems without delays.

senhasegura combines world-class security features with unparalleled ease of use, helping businesses of all sizes overcome their biggest cybersecurity challenges. 

Your organization's security deserves more than a one-size-fits-all solution. Ready to see how senhasegura can transform your organization's security? 

Contact us today to schedule a demo and discover why we're trusted by organizations worldwide to safeguard their most critical assets.