Are Password Managers Safe? What Businesses Need to Know

Every business faces the same problem: weak passwords get you breached, but strong passwords are impossible to remember. Password managers solve this, but are they safe to use?

The short answer: yes, when you pick the right one and use it properly. Here's what you need to know.

Why This Matters for Your Business

The average person has 100+ online accounts. Your team probably has even more when you count business systems, client portals, and SaaS tools.

When people can't remember passwords, they either:

• Reuse the same password everywhere (one breach exposes everything)
• Write them down (on sticky notes, in spreadsheets, in Slack messages)
• Use weak passwords they can remember

All three options are worse than using a password manager.

The numbers: Verizon's 2024 Data Breach Report found that 81% of breaches involved weak or stolen passwords. A password manager eliminates both risks.

How Safe Are They Really?

Modern password managers use zero-knowledge encryption. This means:

• Your passwords are encrypted on your device before they're stored
• The company can't read your passwords, even if they wanted to
• If the company gets breached, the attacker gets encrypted data they can't decrypt

The catch: Your master password is the single point of failure. If someone gets that, they get everything. This is why multi-factor authentication (MFA) is non-negotiable.

What About Breaches?

LastPass had a significant incident in 2022 where attackers accessed customer vault data. While the vaults were encrypted, it highlighted the importance of a strong master password and MFA.

Norton LifeLock saw credential stuffing attacks in 2023, affecting accounts without MFA enabled.

Open-source options like Bitwarden have avoided major incidents, partly because their code is publicly audited.

Key takeaway: No tool is perfectly secure, but a password manager with MFA is dramatically safer than the alternatives (reused passwords, written passwords, or weak passwords).

Which One Should You Use?

Here's what we recommend to London businesses based on their needs:

For Most Businesses: 1Password or Bitwarden

1Password (from £7.99/user/month)

• Excellent for teams with strong admin controls
• Integrates with SSO and identity providers
• Travel Mode protects sensitive data at borders
• Best for: Growing businesses, professional services

Bitwarden (from £3/user/month)

• Open-source and independently audited
• Self-hosting option for compliance needs
• Unlimited devices on all plans
• Best for: Budget-conscious businesses, tech companies

For Enterprises: Keeper or Dashlane

Keeper (from £3.75/user/month)

• AES-256 encryption plus elliptic curve cryptography
• Self-destruct mode for compromised devices
• Extensive compliance certifications
• Best for: Financial services, healthcare, legal

Dashlane (from £5/user/month)

• Biometric authentication built in
• Dark web monitoring included
• Simple family plan add-ons
• Best for: Businesses with remote teams

Quick Comparison

All of these have passed independent security audits and have strong track records. The "best" one depends on your specific needs, not some universal ranking.

What About Google Password Manager?

Google's built-in password manager is free and convenient, but it has limitations:

• Only works properly within Chrome/Google ecosystem
• Less sophisticated encryption than dedicated tools
• No admin controls for business accounts
• Limited sharing capabilities

It's better than nothing, but not what we'd recommend for a business.

How to Use It Safely

Having a password manager doesn't automatically make you secure. You need to:

1. Use a strong master password
   • At least 16 characters
   • Unique (never used anywhere else)
   • Not a passphrase from a book or movie
   • Consider using a long random phrase: "correct horse battery staple" style
2. Enable MFA everywhere
   • On your password manager itself
   • On every account the password manager protects
   • Use authenticator apps, not SMS when possible
3. Don't share the master password
   • Use the password manager's sharing features instead
   • Set up emergency access properly
   • Rotate shared passwords when team members leave
4. Use it for everything
   • Let it generate random passwords
   • Don't "just this once" reuse a password
   • Store recovery codes in it too
5. Keep your devices secure
   • Lock screens automatically
   • Use full disk encryption
   • Keep operating systems updated

Common Questions We Get

"What if the password manager company shuts down?"

Most let you export your passwords. Bitwarden is open-source, so the software will exist even if the company doesn't. Still, check the export process before you commit.

"What about password manager browser extensions, are they safe?"

Yes, from reputable providers. The extension communicates securely with the vault. Just make sure you download from official sources (Chrome Web Store, Firefox Add-ons) and verify the publisher.

"Should we self-host?"

Only if you have the technical capability to maintain it properly. Self-hosting adds complexity and responsibility. For most London SMEs, a reputable cloud provider is safer because they have dedicated security teams.

"What if someone forgets their master password?"

This is why emergency access and account recovery procedures matter. 1Password and Bitwarden both offer enterprise recovery options. Set these up before you need them.

What We Use (And Why)

At Stabilise, we use 1Password for our team and recommend it to most clients because:

• The admin controls make onboarding and offboarding simple
• Travel Mode is useful for our consultants
• The SSO integration works with our other security tools
• It's proven reliable over years of use

But that's our context. For a smaller team on a budget, Bitwarden is excellent. For a financial services firm, Keeper's additional security features might be worth the cost.

The Bottom Line

Password managers are safe when you use reputable providers and follow basic security practices. They're dramatically safer than the alternative (password reuse, written passwords, or weak passwords).

For London businesses, we typically recommend:

• Most businesses: 1Password or Bitwarden
• High-security needs: Keeper or Dashlane
• Budget-focused: Bitwarden
• Individual use: NordPass or Bitwarden

The most important thing isn't which one you pick from the reputable options. It's that you implement one and use it consistently across your team.

Need Help Implementing This?

We help London businesses set up password managers properly, including:

• Choosing the right solution for your context
• Setting up admin policies and emergency access
• Training your team on secure usage
• Integrating with your existing security tools
• Managing the transition from current password practices

This is part of what we mean by being your technology advisors, not just IT support. Security isn't about buying tools, it's about implementing them properly.

[Talk to us about your security setup →]

Stabilise is a technology advisory firm for London businesses. We specialise in Apple but excel across all workplace technology. Real people, every interaction.

‍