File sharing is a standard part of running a business, but it also introduces security risks and cyber threats that can put your data in the wrong hands. Many companies don't realize just how exposed their sensitive information is when files are shared without proper precautions.
Regardless, there are ways to keep your business safe while still allowing seamless collaboration. This blog uncovers seven major file-sharing security risks and actionable strategies for protecting your business with secure file-sharing practices.
What Is File Sharing?
File sharing is the process of distributing or granting access to digital files, documents, and data across devices, networks, or users. Businesses rely on file sharing for seamless collaboration, allowing teams to work on projects, share reports, and exchange critical data in real time.
File sharing can occur through various methods, including:
- Cloud-Based Platforms: Services like Microsoft OneDrive, Google Drive, and Dropbox allow businesses to store and share files securely in the cloud.
- Email Attachments: One of the most common methods, though often unencrypted and susceptible to cyber threats.
- File Transfer Protocol (FTP): A traditional method used for transferring large files between servers, though outdated versions lack security features.
- Peer-to-Peer (P2P) Sharing: This method directly shares files between devices. It is often used for collaboration but can be risky if security measures aren’t in place.
- USB Drives and External Storage: Physical file sharing via flash drives or external hard drives can pose risks if devices are lost or infected with malware.
7 File-Sharing Security Risks That Can Harm Your Business
Your confidential business data is constantly at risk when secure file sharing isn't a priority. Here are seven file-sharing security risks to watch out for:
1. Unprotected Transfers Expose Sensitive Data
Sending files over unencrypted email, outdated FTP servers, or unsecured cloud services is like leaving your office door unlocked. Cybercriminals exploit these vulnerabilities using tactics like packet sniffing and man-in-the-middle (MITM) attacks to intercept data in transit, gaining unauthorized access to financial reports, client information, and intellectual property.
2. Weak Access Controls Lead to Unauthorized Data Exposure
Not everyone in your company needs access to every document. Yet, many businesses use broad access permissions that allow too many employees or external vendors to view, edit, or download sensitive data. If unauthorized users gain access to confidential documents, they can copy, delete, or share them externally, leading to data breaches.
The problem worsens when employees use weak passwords, reuse credentials across platforms, or fail to log out of shared devices, making it easier for cybercriminals to exploit vulnerabilities.
3. Shadow IT Creates Security Gaps
Shadow IT occurs when employees bypass approved enterprise file-sharing or cloud-based platforms and instead store and share work files using unauthorized tools like personal Google Drive, Dropbox, or WeTransfer accounts. While convenient, these platforms often lack enterprise-grade security features such as file encryption and access controls, making them easy targets for cybercriminals.
4. Phishing Attacks Exploit Employee Trust
Cybercriminals frequently use phishing tactics to steal login credentials and gain access to file-sharing systems. Your employees may receive emails that appear to be from trusted sources, instructing them to download a malicious file or enter their cloud-based platform login details.
Once attackers gain access, they can spread malware, exfiltrate sensitive data, or even lock you out of their files through ransomware attacks.
5. Compliance Failures Lead to Legal and Financial Consequences
Industries like healthcare, finance, and legal services must follow strict regulations to protect client and business data. Organizations that fail to use secure file-sharing methods can face legal consequences, financial penalties, and loss of customer trust.
Regulatory bodies such as HIPAA, GDPR, and CCPA require businesses to implement encryption, access controls, and audit logs when handling sensitive data.
6. Inactive Accounts Create Ongoing Security Risks
Many organizations fail to update access permissions after employees leave or a vendor contract ends. This creates significant file-sharing security risks because old accounts with outdated credentials can still access your internal systems.
7. Public Wi-Fi Turns File Transfers into a Security Risk
Employees who access company files over public Wi-Fi, such as in coffee shops, airports, or hotels, unknowingly expose confidential data to cybercriminals. Hackers often set up fake Wi-Fi networks or use packet-sniffing tools to intercept data transmitted over unsecured connections. They then use these networks to intercept file transfers, steal login credentials, and install malware.
⬇️ Explore the top benefits of a VPN in remote work ⬇️
8 Ways to Secure File Sharing in Your Business
Now that you know the file-sharing security risks that can affect your business, it’s time to take action. Here are eight ways to ensure safe and secure file sharing for your business:
1. Choose Encrypted File Sharing Solutions
A secure file-sharing platform should offer end-to-end encryption, ensuring files remain protected during transfer and storage. Microsoft SharePoint and Datto provide strong encryption standards, protecting your data from unauthorized access.
Datto offers a secure file-sharing solution with built-in ransomware protection and automated data backups. Your business can quickly recover files without paying a ransom if a cyberattack occurs. Datto’s solutions also provide immutable backups, meaning files can’t be altered or deleted by unauthorized users.
On the other hand, Microsoft SharePoint provides secure file sharing with advanced compliance controls, access management, and real-time collaboration. SharePoint also integrates with Microsoft 365 security features, protecting against phishing attacks, malware, and unauthorized access.
➡️ Learn how to encrypt your emails
2. Use Role-Based Access Control (RBAC)
Instead of giving everyone access to every document, assign permissions according to business needs. This reduces exposure and minimizes file-sharing security risks by ensuring only authorized personnel handle sensitive data.
Implementing RBAC also helps prevent insider threats and accidental leaks, as employees can’t access or share files beyond their designated scope. Regularly review and update access permissions to align with job changes, promotions, or departures.
3. Implement Multi-Factor Authentication (MFA)
Adding an extra verification step, like a one-time passcode, makes it harder for attackers to gain access to your file-sharing system. Even if a hacker steals login credentials, MFA prevents them from getting in. Enforcing two-factor authentication or MFA across all file-sharing platforms reduces the risk of unauthorized access, even in cases where employees reuse weak or compromised passwords.
4. Train Employees on Secure File Sharing Practices
Many data breaches happen due to human error. Providing regular training on file encryption, phishing detection, and secure file-sharing methods helps your employees avoid mistakes that could put your business at risk.
Teach them to recognize social engineering tactics cybercriminals use to trick them into sharing sensitive files. Conduct hands-on security drills like simulated phishing attacks to reinforce best practices and maintain security awareness.
5. Monitor File Activity with Security Audits
Regularly auditing file access logs helps detect unauthorized activity. Secure file-sharing solutions include built-in monitoring tools that provide real-time alerts on suspicious behavior.
Tracking file movement can identify unusual patterns, such as an employee downloading large amounts of data before leaving the company. Automated alerts also allow IT teams to respond quickly to potential threats, stopping data breaches before they escalate.
6. Encrypt Files Before Sharing
Before uploading files to cloud-based platforms or sending them via email, use file encryption tools to secure the data. Encryption scrambles the file’s contents, making it unreadable without the correct decryption key. Many secure file-sharing platforms, including Microsoft SharePoint, offer built-in encryption.
7. Avoid Public File-Sharing Links
Many file-sharing security risks arise when employees use public links that allow unrestricted access. Instead of sharing files with open links, use secure file-sharing options that require authentication. Platforms like Microsoft SharePoint and OneDrive let users set expiration dates, password protection, and access restrictions on shared files, ensuring only authorized individuals can view or download them.
8. Secure Data Transfers with VPNs
When accessing or transferring files remotely, always use a virtual private network (VPN) to encrypt internet traffic. A VPN creates a secure tunnel between devices and the cloud storage provider, preventing hackers from intercepting data. Pairing a VPN with a secure file-sharing platform minimizes exposure to potential security breaches.
69% are not likely to know whether employees are using unapproved and
risky file-sharing toolsSource: Toppan
Eliminate File-Sharing Security Risks with Pulse Technology!
File-sharing shouldn’t be a gamble, but weak security turns your business into an open target. At Pulse Technology, we offer robust cybersecurity solutions, including advanced encryption, secure access controls, and real-time monitoring, to protect your business from file-sharing security risks.
Contact us today to ensure your file-sharing processes are secure, compliant, and efficient.
