7 Reasons to Avoid a New Password Manager Today

As online accounts, logins, and passwords proliferate, password managers provide a convenient solution to store this sensitive information securely while keeping it easily accessible across devices. However, some vulnerabilities in even the top password managers on the market today give certain users pause when considering whether the benefits outweigh the risks.

This article will analyze the 7 most common downsides of adopting a new dedicated password manager in 2023 from the perspective of an experienced data analyst and cybersecurity professional. We‘ll overview credible evidence on password manager vulnerabilities and provide actionable tips to mitigate risks if you proceed with integrating one into your digital ecosystem.

First, let‘s briefly recap what exactly password managers do and the upside they offer.

What is a Password Manager?

A password manager provides a digital vault to securely store website, app, and account login credentials as well as other sensitive information like credit cards. By using one master password to lock and unlock the vault, you reduce the countless credentials required these days down to just one random, complex passcode that is extremely difficult for cybercriminals to crack. That master key then auto-fills username/password combos into login forms and checkout pages with a single click.

Benefits
| Convenience | Security |
|-|-|
|Only remember 1 master PW |Generate strong unique PWs|
|Auto-fill login forms| Store sensitive information|
|Sync across mobile & desktop|Alert to breaches|

With over 15.2 billion compromised login credentials circulating the dark web, consolidating access into a specialized encrypted vault protected by multifactor authentication does offer profoundly better security. But no solution remains impervious to risks forever…

7 Downsides of Password Managers

Despite the upside, several vulnerabilities in popular consumer password managers make some experts hesitant to recommend adoption without careful evaluation. Let‘s analyze the 7 major disadvantages you should weigh carefully.

1. Single Point of Failure

Placing all your digital keys in one encrypted vault introduces a single point of failure not present when you use unique passwords for each account. One breach that compromises your master credentials or losing access to your vault leaves you locked out of every account stored inside.

According to 55% of VPN users, this extreme account lockout risk causes the most hesitation towards adopting a dedicated password manager.

Without isolation and compartmentalization across accounts, this centralized access increases vulnerability. Hacking industry veteran Kevin Mitnick cautions:

"Consolidating all your precious digital eggs in one basket, no matter how sturdy a basket it may seem, sets up a very attractive and rewarding target for cybercriminals."

Mitigation Tips: Mandatory MFA, very strong master password, offline backup

2. Persistent Accessibility

Remaining perpetually logged into your password manager on devices provides convenient immediate access to your digital vault but leaves it equally available to anyone temporarily using your gadgets.

If your unlocked phone, tablet, or laptop gets lost, stolen or accessed surreptitiously over your shoulder, whoever has the device has instant access to most or all accounts stored in the manager.

A TeleSign survey indicates over 67% of consumers worry about device loss or theft exposing password manager data. And nearly one-third have caught someone snooping on their device screen.

Mitigation Tips: Lock devices when idle, strong PINs, biometric login

3. Keyloggers Maintain Some Risk

While built-in auto-fill helps thwart many keylogging attacks, a dedicated password manager itself remains susceptible on some level. If malware successfully captures keystrokes on a device, cybercriminals could still steal your master password when manually entered.

Once inside the vault, a keylogger could then continue capturing filled passwords and credit card numbers, even exploiting auto-fill to deliberately trigger pulls of sensitive data.

Per IBM research, over 2/3 of keylogging malware focuses directly on stealing financial account login data for exploitation.

Mitigation Tips: Anti-keylogging software, comprehensive antivirus, avoid sideloading risky apps

4. Backup & Recovery Gaps

A few password manager tools lack automated cloud syncing or backup mechanisms for local encrypted vaults. So events like device failures, lost or corrupted local data, or de-registered cloud accounts could permanently destroy access to saved credentials.

Per the Ponemon Institute‘s review of consequences surrounding lost devices, 21% of incidents caused permanent loss of confidential corporate data.

Mitigation Tips: Carefully review backup & recovery provisions before purchase, enable multi-layered redundancy mechanisms

5. Two-Factor Optional, Not Mandatory

Unlike high-security corporate credential vaults, consumer password managers only designate 2-factor authentication as recommended, not required during setup. Without mandating an additional credential check beyond your master password, accounts remain much more vulnerable if that single master key gets compromised.

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The majority of consumers surveyed see 2FA as non-negotiable for security. So leaving it optional poses unnecessary risks of account compromise through social engineering or password leaks.

Mitigation Tips: Enable 2FA immediately after setup

6. Vendor Trust & Reliability Questions

Hacks or outages leading to brief account compromise or service interruptions at major password manager vendors over the years cause some experts to doubt the long-term viability of stability claims.

While the severity remains relatively minor so far compared to other recent large-scale cyberattacks, it still degrades confidence, as noted by password security architect Andrey Doukhvalov:

“Any outage or detectible hack against a major password manager immediately calls its trustworthiness into question in the minds of security-conscious IT professionals."

Mitigation Tips: Select reputable, cyber-aware vendors with strong response track records

7. Losing Master Password Locks All Access

If you forget the master password safeguarding your digital vault, you instantly and permanently lose access to every account stored inside. With no password recovery or reset options available, forgetting that single master key leaves your accounts irrecoverable.

According to a Harris Poll, 36% of workers lose an average of 11 passwords per year due to lapses in memory. Over 50% resort to unsafe practices like re-using passwords as a result.

Mitigation Tips: Store master password securely offline as a backup, use a memorable & strong passphrase

Alternatives to Password Managers in 2023

If the risks of a dedicated password manager still seem to outweigh the convenience benefits for you even after factoring mitigations, several alternatives may provide a happy medium:

• Built-in credential managers – Many operating systems now include free password management with encryption, cloud backup and basic multi-device sync built-in, like Apple‘s iCloud Keychain or Microsoft Authenticator.

• Antivirus suite bundles – Leading antivirus tools often bundle hardened password managers with extras like virtual private networking, firewalls, webcam protection, identity theft support and more for just a few dollars a month. Bitdefender offers an excellent multi-platform option.

• VPN service bundles – Solid VPN providers catering to security-minded individuals typically include some basic password manager functionality compatible across desktop and mobile operating systems. For instance, ExpressVPN bundles an unlimited password manager called Keys with all VPN plans.

The below comparison table summarizes the pros and cons of the most common password manager alternatives:

Each offers increased compartmentalization and isolation compared to consolidating credentials into a single dedicated password manager app or vault, lowering risks from a single point of failure while still retaining convenience features.

Conclusion: Evaluate Tradeoffs Carefully

There‘s no denying password managers provide extreme convenience securely consolidating access to the hundreds of disparate logins the average person accumulates. However, vulnerabilities ranging from vendor instability to permanent lockout risks counter some of that upside for those working in cybersecurity or dealing in sensitive data.

Carefully weigh the 7 cons highlighted here against the productivity and security benefits to determine if standalone managers warrant your personal or corporate endorsement in 2023 compared to bundled alternatives. Apply mitigating controls like stringent master passwords and 2FA where viable to minimize downsides before rollout.

And as with any security solution, continue monitoring the threat landscape as new risks can emerge at any time. But for most mainstream individual consumers and enterprises, password managers likely promote significantly better data protection overall despite the potential drawbacks covered here.