Explanation of terms

Password vaulting is a central component of modern Privileged Access Management (PAM) strategies. Highly privileged access data such as admin passwords, root accounts or service credentials are stored in a protected, encrypted password vault. Access to this information is exclusively controlled, logged and ideally temporary.

Functionality

Instead of users having to remember passwords or enter them manually, the access data is stored centrally in an encrypted "vault". Administrators can specify which users or groups have access to certain applications. Employees can then use browser extensions or a dashboard to log in with a single click via single sign-on (SSO), even for apps without native SSO support.

Why do you need password vaulting?

Password vaulting is necessary because many applications do not support federated authentication (e.g. SSO, SAML or OpenID Connect). It enables secure and centralized management of these applications.

Advantages and reasons for use

  • Secure storage: Access data is encrypted and stored in a central vault.
  • Central management: Administrators can manage passwords, control access rights and assign apps specifically.
  • Automated login: Users log in with a click via a dashboard or browser plugin without having to enter passwords manually.
  • Closes SSO gaps: Ideal for applications that do not support federated identities.
  • Protection of sensitive accounts: Important component in Privileged Access Management (PAM) for securing privileged access.
  • Compliance & Audit: Supports security and data protection requirements (e.g. GDPR, ISO 27001).

How does a Password Vault work?

A password vault is part of a PAM solution and usually includes the following functions:

  • Central, encrypted storage location

→ All sensitive access data is stored in the vault and is protected against unauthorized access.

  • Temporary release ("check-out") with logging

→ Only authorized users can use a password for a defined period of time and every use is logged.

  • Automatic password change (rotation)

→ Passwords are changed automatically after use or on a regular basis.

  • Access without password visibility

→ Users can log in via the system without ever seeing the password.

Conclusion

Password vaulting reduces risks from weak or reused passwords and creates security even where SSO cannot be used.

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