How to Identify Risky Apps in Microsoft 365 and Protect Your Data

Third-party applications integrated with Microsoft 365 offer substantial benefits by enhancing productivity, streamlining workflows, and automating repetitive tasks. However, these advantages come with inherent security risks that can jeopardize your organization’s data and operations. Cyber attackers often exploit these applications to gain unauthorized access, using permissions, user credentials, and application vulnerabilities. To safeguard your enterprise, it is essential to understand these risks and implement effective mitigation strategies.

The good news? Protecting your organization doesn’t have to feel like an uphill battle. By shining a light on the hidden dangers of third-party applications and equipping yourself with the right tools and strategies, you can stay one step ahead of potential threats. In this guide, T-Minus365 break down how attackers exploit these apps, share real-world examples of the damage they can cause, and, most importantly, guide you through actionable steps to identify and mitigate risky applications in Microsoft 365. Let’s dive in and take control of your organization’s security.

Microsoft 365 App Security

TL;DR Key Takeaways :

Third-party applications in Microsoft 365 enhance productivity but pose security risks, such as data breaches and unauthorized access, if permissions are mismanaged or exploited.
Common attack techniques include phishing, malicious application registration, data exfiltration, and privilege escalation, which can lead to significant organizational damage.
Indicators of compromise include suspicious application names, excessive permissions, unusual activity patterns, and non-standard naming conventions or reply URLs.
Protective measures include restricting user consent, disabling user application registration, auditing applications regularly, and monitoring permissions and usage insights.
Best practices for application hygiene involve reviewing permissions, removing unused or over-permissioned apps, and establishing a controlled process for vetting new applications.

Understanding Enterprise Applications and Their Risks

Enterprise applications in Microsoft 365 are designed to improve efficiency through features like Single Sign-On (SSO) and workflow automation. These applications require permissions to access organizational data and services, which can be granted by users or administrators. While this access is necessary for functionality, it also introduces potential vulnerabilities if permissions are mismanaged or exploited.

For example, applications with user- or admin-consented API access can perform sensitive actions such as reading emails, accessing files, or impersonating users. If permissions are excessive or abused, they can lead to data breaches, unauthorized actions, or even full-scale compromises of your organization’s environment. Recognizing these risks is a critical first step in protecting your enterprise.

Common Attack Techniques

Attackers employ a variety of methods to exploit vulnerabilities in third-party applications. Some of the most prevalent techniques include:

Phishing and Adversary-in-the-Middle Attacks: These attacks steal user credentials or session tokens, allowing attackers to bypass authentication mechanisms and gain unauthorized access.
Malicious Application Registration: Attackers register applications with excessive permissions, allowing them to impersonate legitimate users and maintain persistent access to sensitive resources.
Data Exfiltration: Compromised applications can extract sensitive organizational data or send phishing emails to other users, propagating the attack further.
Privilege Escalation: Malicious applications can escalate their permissions, granting them access to broader organizational resources and increasing the scope of potential damage.

In some instances, attackers may even deploy virtual machines for unauthorized activities, such as cryptocurrency mining, which can result in significant financial and operational costs. Even legitimate applications, such as email clients, can be exploited to conduct large-scale phishing campaigns, amplifying the risks.

Find Risky Apps in Microsoft 365

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Indicators of Compromise

Detecting risky applications requires continuous vigilance and monitoring. Key indicators of compromise include:

Applications with suspicious or generic names, such as random strings or terms like “test app.”
Apps requesting permissions that exceed their intended purpose or operational requirements.
Unusual activity patterns, such as frequent sign-ins or data access during non-business hours.
Applications registered with non-standard naming conventions or reply URLs that deviate from organizational norms.

Identifying these red flags early can help you mitigate potential threats before they escalate into significant security incidents.

Protective Measures

To reduce the risks associated with third-party applications, organizations should adopt a proactive approach to application governance. Key protective measures include:

Restrict User Consent: Limit the ability of users to consent to applications, making sure that only administrators can approve new apps. This reduces the likelihood of users inadvertently granting excessive permissions to risky applications.
Disable User Application Registration: Prevent users from registering new applications without oversight, minimizing the potential for unauthorized or malicious app registrations.
Audit Applications Regularly: Conduct periodic reviews of enterprise applications to identify suspicious activity, excessive permissions, or inactivity. This helps maintain a secure application environment.
Monitor Permissions and Usage Insights: Use tools to identify over-permissioned or unused applications and take corrective action to minimize risks.

By implementing these measures, your organization can significantly reduce its exposure to security threats and maintain a more secure Microsoft 365 environment.

Hunting Techniques for Risky Applications

Proactive threat hunting is a vital component of identifying and mitigating risky applications. Using tools such as PowerShell scripts or third-party solutions can automate the detection process and enhance efficiency. Focus on the following areas during your threat-hunting efforts:

Applications with non-alphanumeric names or unusual reply URLs, which may indicate malicious intent.
Apps requesting permissions that do not align with their stated purpose or operational requirements.
Service principal activity in sign-in logs, which can reveal background operations conducted by potentially malicious applications.

By analyzing these factors, you can uncover hidden threats and address them before they compromise your organization’s security.

Best Practices for Application Hygiene

Maintaining strong application hygiene is essential for reducing risks and making sure a secure enterprise environment. Adhering to the following best practices can help your organization stay protected:

Regularly review application permissions and usage to ensure they align with organizational policies and operational needs.
Remove unused or over-permissioned applications to minimize your attack surface and reduce potential vulnerabilities.
Establish a controlled process for adding new applications, making sure they are thoroughly vetted for security risks before approval.

Consistent application hygiene not only reduces vulnerabilities but also fosters a culture of security awareness within your organization, encouraging employees to prioritize security in their daily operations.

Securing Your Microsoft 365 Environment

While third-party applications in Microsoft 365 can significantly enhance productivity, they also introduce notable security risks if not properly managed. By understanding the vulnerabilities associated with these applications and implementing robust governance practices, your organization can protect itself from threats such as data breaches, privilege escalation, and unauthorized access. Regular monitoring, proactive threat hunting, and adherence to best practices are essential to maintaining a secure and efficient enterprise environment. Taking these steps will ensure that your organization can fully use the benefits of Microsoft 365 while minimizing potential risks.

Media Credit: T-Minus365

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