10 Hidden Microsoft 365 Security Risks Your Business Can’t Afford to Ignore

Keiran J

In today’s hybrid work world, Microsoft 365 (formerly Office 365) has become the backbone of communication and collaboration for most businesses. But while it offers incredible flexibility and productivity, it’s not immune to cyber threats — especially if your Microsoft tenant isn’t configured properly.

As a business owner or manager, you probably assume that Microsoft “has it covered.” But here’s the truth: Microsoft operates on a shared responsibility model. That means you’re responsible for securing your users, data, and tenant settings.

So, what could go wrong? Here are 10 common security gaps we see in everyday businesses — and how a security assessment can help protect you.

1. No Multi-Factor Authentication (MFA) Enabled

Passwords are no longer enough to protect business accounts. Cybercriminals can easily buy or guess passwords, and without MFA, that's all they need to access your email, documents, and customer data. MFA adds a second layer — usually a code sent to your phone — making it almost impossible for someone to log in without your permission.

Shockingly, many New Zealand businesses still haven’t enforced MFA across all staff accounts. It’s a simple step that reduces the risk of account breaches by over 99%. If you only make one change after reading this article — make it MFA.

2. Excessive Admin Access

Think of a Microsoft 365 admin as someone who holds the keys to your entire digital office. If their account is hacked, an attacker can change passwords, delete files, or create new accounts to stay hidden.

Many small businesses give too many staff admin rights just to “make things easier.” But this creates massive risk. Your business should have no more than 2-3 global admins, and ideally only IT personnel. Reducing admin access is one of the quickest ways to lock down your environment.

3. No Email Threat Protection Policies

Microsoft 365 does offer some built-in email protections — but out of the box, they’re not set up to catch more advanced scams.

Without configuring anti-phishing and malware rules, your team is more likely to receive fake invoices, scam messages from “the CEO,” or links to malicious websites. These scams are becoming harder to spot — even by trained users.

Setting up policies that filter out risky content before it hits inboxes is critical to preventing human error and protecting your data.

4. Users Sharing Files Publicly by Default

OneDrive and SharePoint make file sharing easy, but that convenience can lead to mistakes. Many businesses don’t realise their files can be shared with “anyone with the link” by default — even outside the company.

That means sensitive documents — like customer records, invoices, or contracts — can end up in the wrong hands, and you may never know. A proper security assessment reviews your sharing settings and recommends safer defaults that still allow collaboration without unnecessary exposure.

5. Unmonitored Sign-ins from Overseas or Suspicious Locations

If someone logs into your Microsoft account from an unfamiliar country, would you know?

Attackers often use bots or stolen credentials to log in from overseas. Without alerting and conditional access policies in place, these suspicious activities go unnoticed. Your staff may not even realise their account has been hijacked until data starts disappearing or spam gets sent.

We help businesses set up alerts and access restrictions so that only authorised users from expected locations can get in.

6. No Data Loss Prevention (DLP) Rules

Do your staff ever send client info, ID numbers, or credit card details over email? Without DLP in place, these actions can happen freely — and lead to compliance breaches or fines.

DLP allows you to set rules like: “don’t send emails containing credit card numbers outside the organisation.” It can prevent mistakes before they happen and shows customers that you take data security seriously.

We often find businesses are entitled to use DLP features, but haven’t activated them. We can help you change that.

7. Inactive Accounts Still Enabled

When a staff member leaves, their Microsoft account often stays active for “just in case” access. But these unused accounts become a big risk over time — especially if the passwords are weak or already leaked.

An attacker can easily target these orphaned accounts to gain entry without setting off any alarms. Part of our assessment includes identifying inactive or forgotten accounts and helping you secure or remove them safely.

8. Weak or Non-Expiring Password Policies

It’s tempting to allow passwords that never expire or don’t follow strong rules — especially if you want to avoid calls from staff who forget them. But this creates a serious weakness.

Hackers use automated tools to try thousands of passwords a second. If your password is weak or old, it won’t stand a chance. Worse, leaked passwords from unrelated sites (like LinkedIn or Dropbox) often match ones people reuse at work.

We recommend using modern password policies along with MFA — and checking for compromised accounts using Microsoft’s own security score.

9. Teams and SharePoint Sprawl

Microsoft Teams and SharePoint are fantastic for collaboration — but without proper setup, they can become cluttered and hard to manage.

You might have dozens of unused Teams or SharePoint sites, with important data left sitting there unmonitored. Files can be forgotten, shared inappropriately, or even deleted without anyone noticing.

We help clean up unused sites, set permissions correctly, and make sure important information is stored in the right place with the right people.

10. No Backup or Recovery for Emails and Files

Here’s something most people don’t realise: Microsoft does not back up your data in the way you think. Yes, it offers a recycle bin and some version history — but if a file is permanently deleted or overwritten, you may not be able to get it back.

Accidental deletions, ransomware, or malicious insiders can wipe out critical files forever. A third-party backup ensures you can recover emails, OneDrive files, or SharePoint data — even months later.

We’ll show you where your risks are and recommend options that keep your business safe, without breaking the bank.