What Is A Password Manager, & Why Should You Be Using One?

Passwords are the first line of defense for our online accounts. But weak passwords and password reuse have also become a massive cybersecurity problem. According to a recent Google survey, 66% of people admit to reusing the same passwords across multiple accounts. This bad habit makes the effects of data breaches far worse, allowing hackers easy access to your most sensitive accounts.

So what‘s the solution? Password managers! In this in-depth guide, we‘ll explore what password managers are, why you urgently need one, and how to choose the best password manager for your needs.

What Is A Password Manager?

A password manager is a specialized tool that stores and manages all your passwords in one encrypted and secure vault. By generating strong unique passwords for every account, it eliminates the security risks of weak and reused passwords.

Password managers offer convenient features like auto-fill on websites and apps to log you in instantly. Your vault is synced across all devices so you have perpetual access to passwords on the go. And with bank-grade encryption, not even the password manager company can access your vault without the master password.

The Case for Using a Password Manager

Let‘s look at some compelling statistics that demonstrate why a password manager is now considered mandatory security software:

• 81% of hacking related data breaches are due to compromised passwords (Verizon 2022 DBIR)
• 66% of people reuse passwords across accounts (Google)
• Average person has 100+ online accounts (Keeper Security)
• 70% of people regularly forget passwords (Keeper)

As you can see, the overload of accounts coupled with weak passwords and reuse creates a massive point of failure. Hacking related breaches are rampant, and password reuse exponentially magnifies the damage.

Humans simply cannot manually handle the complexity and volume required for proper password hygiene. This makes a password manager essential to protect both business and personal accounts.

How Does a Password Manager Work?

Password managers provide a secure encrypted vault or digital locker for storing all your passwords. This vault is encrypted using advanced algorithms like AES-256, XChaCha20 or Argon2. You unlock the vault using a master password that only you know.

Once your vault is unlocked, the password manager can automatically log you into websites and apps by inputting saved passwords. A browser extension gives easy access to save new passwords or fill credentials on sites you visit.

Your encrypted vault syncs seamlessly between desktop, laptops, tablets and mobile devices regardless of operating system. This gives you perpetual access to all your passwords when you need them.

Here are some key features that enable password managers to securely store and fill credentials:

• Password generator – Creates long, random, and complex passwords that are impossible to crack.
• Auto-fill – Automatically inputs saved usernames and passwords on websites and in apps.
• Browser extension – Tight integration to easily save new passwords or fill logins.
• Cross-platform sync – Vault syncs seamlessly across desktop, laptop, tablet and mobile.
• Biometrics – Fingerprint or facial unlocking on mobile for convenience.
• Security alerts – Warnings if logins appear in breaches or on the dark web.

Reputable password managers also undergo frequent independent audits by cybersecurity firms to certify their safety and security. For example, Dashlane employs firms like KPMG, Cure53, and Synack for comprehensive security testing.

What Makes Password Managers Secure?

With something as critical as your passwords, the security of a password manager is paramount. Here are key aspects to look for:

Powerful Encryption

Military-grade encryption like AES-256, XChaCha20, Argon2 and similar algorithms are essential. Open source encryption code also allows transparency into their methods. These prevent decryption of your vault without the master password.

Zero-Knowledge Architecture

This means your encrypted vault is only stored locally on your devices, not on company servers. So the password manager provider has no means of accessing your passwords. This prevents company insiders, hackers, or governments from obtaining your data.

Key Derivation

Your master password is run through key derivation algorithms like PBKDF2, SCrypt, BCrypt or Argon2. This turns it into a complex encryption key that can‘t be cracked through brute force or dictionary attacks.

Leak Monitoring

Monitoring sites like the dark web for appearance of your passwords provides breach alerts. You can immediately change compromised credentials before damage is done.

Security Audits

Reputable firms have independent security assessments done regularly by firms like KPMG, NCC Group and Cure53. Audits validate encryption methods, architecture, vulnerabilities and other aspects.

Breach Reports

Some password managers provide breach reports showing all leaked sites you have accounts on. This allows you to quickly change passwords on any compromised logins.

Password Manager Benefits

Here are the major benefits you gain by using a password manager for both personal and business account security:

Prevents Password Reuse

The password manager generates a long, fully random password for each new site or account you use. This prevents using the same passwords across sites, eliminating a major point of compromise.

Blocks Phishing

When you visit a phishing site masquerading as a legit login page, the password manager won‘t automatically fill anything since the URL is fake. This foils phishing attempts.

Stops Keylogging

Basic keyloggers won‘t capture your complex random passwords that the manager fills in. And the master password is only entered occasionally.

Saves Time

Logging into accounts manually and resetting forgotten passwords is highly inefficient. Password managers reduce wasted time through convenient auto-fill login.

Improves Memory

Humans can only manage 7-10 passwords effectively. Password managers offload the impossible task of remembering 100+ complex passwords.

Facilitates Best Practices

Very few users can manually handle the requirements of different passwords on every account, password rotation, and proper complexity. Password managers make best practices easy.

Provides Peace of Mind

By effortlessly handling strong unique passwords for every account, a password manager gives great peace of mind that your accounts are secured.

Password Manager Statistics & Data

Let‘s examine some surprising statistics that demonstrate the widespread problems caused by weak and reused passwords:

81% of hacking related breaches are due to compromised passwords

The 2022 Verizon DBIR report analyzed thousands of breaches and found password compromise continues to be the biggest attack vector by far.

66% of people admit reusing passwords across accounts

A 2018 Google survey showed 66% of respondents acknowledge reusing passwords on multiple accounts. Just 3% claimed they don‘t reuse passwords.

91% of hacking breaches occur in under 15 minutes

IBM research found that the vast majority of successful hacking attacks are able to penetrate defenses and complete their mission in under 15 minutes.

187 million new malware samples were recorded in 2022

Anti-malware firm Avast reported that new malware samples increased by a massive 48% compared to 2021. All types of cyberthreats are proliferating.

average cost of a corporate data breach is $4.35 million

IBM‘s 2022 report put the average total cost of a corporate data breach at $4.35 million globally, a 2.6% increase over 2021. Breaches get more expensive every year.

70% of people regularly forget passwords and account details

A recent Keeper Security survey showed 70% of people admit to regularly forgetting passwords and other account details, prompting frequent resets and lockouts.

average person has over 100 online accounts

According to Keeper‘s research, consumers have on average over 100 online accounts from social media, deliveries, subscriptions, work apps, and more that require passwords and login.

How to Choose the Best Password Manager

Don‘t trust just any password manager with protecting your sensitive data. Use the following criteria to select the best solution for your needs:

Provider Reputation

Go with an established, reputable provider with a long track record of security and transparency. Avoid unknown brands and free options.

Independent Audits

Verify the password manager undergoes frequent third-party audits by respected cybersecurity firms. Look for public audit reports.

Powerful Encryption

Bank-grade encryption like AES-256 is essential. Also look for open source or reviewed encryption code for transparency.

Zero-Knowledge

Your encrypted vault should only be stored on your devices, not company servers. This prevents unauthorized access.

Breach Alerts

Dark web monitoring and alerts if your logins appear in leaked dumps is highly beneficial for responding to breaches.

Usability

Ensure convenient features like biometric unlock, browser extensions, and auto-fill for easy logins.

Customer Support

Knowledgeable support via chat, email and phone provides help when you need it.

Affordable Pricing

Leading password managers are priced competitively for individuals and teams. Avoid free versions with limited features.

Conclusion

In closing, adopting a secure password manager is now a mandatory step both for personal and professional digital security. The overwhelming advantage of unique complex passwords on every account combined with biometric convenience and encryption cannot be overstated. Evaluate leading commercial password managers using the criteria outlined here to find the best solution for your needs and budget. Your online identity and data will be far better protected.