What types of compliance should your password manager support?
Lost credentials and weak authentication controls still sit at the center of many security incidents. IT leaders and CISOs know this problem well. They also know that regulators watch how organizations protect passwords, track access, and document security decisions. That is why password managers have become part of compliance conversations rather than optional add ons.
Alex Muntyan, CEO at Passwork, describes it this way: “When teams store passwords in scattered places, they create blind spots. A password manager helps bring order to something that can get messy fast.”
This raises a practical question. What types of compliance should your password manager support, and how do you judge whether a tool meets those expectations.
The regulatory pressure behind password management
Passwords are not only a technical issue. They are tied to laws that govern how sensitive data is protected. In the European Union, the General Data Protection Regulation covers credentials as personal data, which means they must be stored and processed securely. The NIS 2 Directive places cybersecurity responsibilities on essential and important entities, including expectations for access control and secure authentication practices.
In the United States, healthcare organizations follow the HIPAA Security Rule, which requires protections around access to electronic health information. Financial institutions must comply with the Gramm Leach Bliley Act Safeguards Rule, which mandates access control and secure data handling programs.
These laws differ in scope, yet all of them expect strong control over who can reach sensitive systems and how authentication data is protected. A password manager becomes a practical tool to demonstrate that an organization treats credential handling as part of its compliance program.
Muntyan added, “Auditors want to see that you have control over access. When everything is logged, structured, and easy to review, you show that the organization takes its obligations seriously.”
Security management frameworks set the baseline
Independent frameworks shape how organizations evaluate vendors. Two of the most recognized are ISO 27001 and SOC 2.
ISO 27001 outlines how an information security management system should be structured. It covers risk management, access controls, asset management, encryption, and audit logging. The standard is one of the most common benchmarks for cloud and on premises software providers.
SOC 2, created by the AICPA, assesses how a service organization protects security, availability, confidentiality, processing integrity, and privacy. Many companies use SOC 2 reports as a measure of whether a vendor has strong internal controls.
A password manager that aligns with these frameworks gives security teams confidence that the platform follows disciplined practices. This matters when tools store and handle credentials for entire organizations.
Passwork uses these frameworks to guide its own security design. Muntyan explained, “Certified frameworks help keep us honest. They show customers that we treat our own processes with the same seriousness that they apply to theirs.”
Authentication guidance shapes specific requirements
While ISO and SOC 2 cover broad controls, the technical details for password management are influenced by NIST Special Publication 800 63B. This document guides how passwords should be created, stored, and verified, and how multi factor authentication should be implemented. It also encourages long passphrases, safe hashing practices, and resistance to common attacks.
Auditors often look for alignment with this guidance since it shapes many US federal expectations and sets a reference point for private sector security teams.
OWASP offers additional guidance through its Application Security Verification Standard and its authentication and password storage cheat sheets. These resources describe best practices for credential handling, hashing algorithms, rate limiting, and session security.
A password manager should support these expectations. It should allow long generated passwords, enforce MFA for administrators, store secrets using strong encryption, and offer integration with enterprise identity systems.
Muntyan said, “People expect a password manager to take the hard parts out of authentication. That means getting the details right, not only the big ideas.”
Cryptographic expectations cannot be ignored
Some organizations require that cryptographic modules follow the FIPS 140 3 standard. This validation is often necessary for government contractors or industries that handle sensitive records. FIPS 140 3 describes requirements for how encryption modules are designed, tested, and implemented.
Even when FIPS validation is not mandatory, many CISOs view it as a sign of strong engineering discipline. A password manager should be transparent about which encryption methods it uses, how keys are generated, and how those keys are protected.
Passwork documents its encryption design and makes its approach understandable to technical teams. Muntyan noted, “Encryption should never feel mysterious. Customers want plain answers about how their data is protected and who can access it.”
Sector specific compliance adds more expectations
Different industries expect different controls. For organizations that work with payment data, the PCI Data Security Standard requires strong access controls, use of unique credentials, and safe storage of authentication information. PCI DSS v4.0.1 contains testing procedures and requirements that influence how tools should handle secrets.
Healthcare providers must meet HIPAA expectations for access management and audit logging. This means a password manager must help document who accessed which passwords and when. Financial institutions covered by GLBA rely on detailed logging, role based access control, and risk assessments.
A password manager that provides comprehensive logs, separation of roles, encrypted storage, and administrative oversight can help fulfill these obligations.
EU guidance influences expectations beyond law
Outside of binding laws, the European Union Agency for Cybersecurity publishes advice that many organizations follow when designing authentication practices. ENISA encourages the use of password managers, MFA, and long passphrases as part of safe authentication.
While these recommendations do not have legal force, they carry weight in assessments and security reviews. Using tools that follow this advice strengthens an organization’s compliance story.
Why vendor design and deployment model matter
Compliance does not depend only on product features. It also depends on where and how the tool runs. Some organizations must keep authentication data inside their own infrastructure because of regional, contractual, or regulatory requirements.
Passwork offers an on premises deployment option that keeps credential storage within the company’s infrastructure. This model supports organizations that need tight control over data residency and network boundaries.
Muntyan explained, “Many customers want the benefits of central credential management without sending sensitive data outside their environment. On premises deployment gives them that choice.”
Vendor transparency also matters. Companies should ask how products are tested, how updates are reviewed, and what monitoring exists for abnormal activity. They should also confirm that the vendor provides logs that meet audit expectations.
Build compliance awareness into your credential strategy
A password manager is only one piece of a compliance program. Organizations should map requirements across GDPR, NIS 2, HIPAA, GLBA, PCI DSS, and other applicable rules. They should document configuration decisions, enforce MFA, and review logs during audits.
Password managers strengthen compliance when they centralize credential handling, reduce risky workarounds, and provide the records that regulators expect.
Muntyan summed it up this way: “Security leaders want tools that help them stay organized. If a password manager helps them answer tough questions during audits, then it becomes more than a convenience. It becomes a strategic asset.”