Microsoft 365 is the operational core of most businesses. Email, files, collaboration, and identity all run through it.. That also makes it the most targeted platform in the modern threat landscape. And the uncomfortable truth is that most M365 environments are set up, handed off, and never hardened again.
The default settings Microsoft ships are designed for ease of onboarding, not for security. Securing Microsoft 365 properly requires more than enabling default settings; it requires knowing what’s off, what’s misconfigured, and what attackers go looking for first.
This is where an expert Microsoft 365 security assessment helps identify what’s missing.
This blog covers:
- The most common Microsoft 365 security gaps,
- What attackers already know, and
- The 5 best practices to secure, monitor, and maintain your M365 environment properly.
Why Microsoft 365 Creates a False Sense of Security
There’s a pattern that plays out repeatedly: a business migrates to Microsoft 365, IT enables MFA, and the organization feels like it’s covered. It isn’t.
The Configuration Gap
Microsoft 365 security is not a switch you flip. It’s a layered setup across email, identity, sharing, admin roles, and endpoints. Most of those layers are not enabled by default, and many require deliberate decisions about trade-offs between security and convenience.
Default ≠ Secure
Default settings prioritize usability, not security.
Is your Microsoft 365 environment configured the way your IT team thinks it is; or the way Microsoft configured it at setup?
That distinction matters. Microsoft defaults favor accessibility. Legacy authentication protocols are often still enabled. External sharing is frequently open beyond what the business actually needs. Admin accounts may still lack MFA enforcement.
What Attackers Already Know
Threat actors have detailed knowledge of M365’s default configuration. They know which legacy protocols bypass MFA. They know how to abuse OAuth consent grants. They know that most tenants have overly permissive sharing settings and weak inbox rules they can exploit to silently redirect email.
5 Microsoft Office 365 Security Best Practices Your Environment Probably Doesn’t Have
Here’s where most O365 security reviews find the biggest gaps:
1. Disable Legacy Authentication
Legacy authentication protocols, SMTP Auth, POP3, IMAP, Basic Auth, bypass multi-factor authentication entirely. If these are still enabled and unused accounts exist, attackers can attempt credential stuffing attacks without MFA ever triggering.
Recommended action: Disable legacy authentication protocols via Conditional Access policies. Microsoft has been pushing this for years; many organizations still haven’t completed it.
2. Fix Admin Role Exposure
| Common Problem | What It Enables | Proper Control |
|---|---|---|
| Too many Global Admins | One compromised account = full tenant access | Limit to 2–4, use just-in-time access |
| Admin accounts used daily | Higher phishing exposure | Separate admin accounts for admin tasks only |
| No Privileged Identity Management | Standing access to powerful roles | Use PIM for time-limited elevation |
| Break-glass accounts unmonitored | Unknown if they’re accessed | Alert on any sign-in |
3. Conditional Access Policies
This is the largest gap in most M365 environments. Conditional Access is where you define the rules: who can access what, from which devices, under what conditions. Without it, MFA becomes inconsistently enforced and device compliance is meaningless.
A basic O365 best practices checklist for conditional access includes:
- Block legacy authentication protocols
- Require MFA for all users, enforced at the policy level
- Require compliant or Hybrid Azure AD joined devices for access to sensitive data
- Block access from high-risk sign-in locations when behavior is anomalous
- Set session controls for unmanaged devices (read-only, no download)
4. Sharing and External Access
How much of your SharePoint and OneDrive is accessible to people outside your organization without your IT team knowing?
Default sharing settings in Microsoft 365 frequently allow users to share files and folders with anyone who has a link, no authentication required. That means a single misdirected share can expose sensitive documents to the open internet.
Recommended action: Set sharing defaults to “Existing guests” or “Specific people” at the tenant level, and audit existing external shares quarterly.
5. Microsoft 365 Business Basic Security Features
Organizations on lower license tiers often assume they can’t access security features. Some important controls, Conditional Access, Defender for Office 365, Microsoft Entra ID P1, do require higher licenses, but several critical settings are available across all tiers:
- Security defaults (free, on by default for new tenants)
- Audit logging
- MFA through security defaults or per-user MFA
- Spam and phishing filters in Exchange Online Protection
The gap between business basic and Business Premium is real but often misunderstood, a deep assessment by a cybersecurity professional is enough to know what you’re missing, not assuming the lower license is fine.
Why Most Microsoft 365 Security Threats Go Undetected
Most businesses have Office 365 security logging enabled but nobody is reviewing it. Unified Audit Log captures sign-ins, admin changes, file access, and inbox rule modifications, but it only helps if someone is actually looking at it.
What Goes Undetected
Without active monitoring, common attacker actions in M365 go unnoticed:
- Inbox rules created to forward email silently to external addresses (a classic BEC precursor)
- New OAuth applications granted consent to read email or files
- Mass file downloads from SharePoint before an account is deactivated
- MFA method changes as part of an account takeover
The SIEM Question
Exporting M365 logs into a SIEM or managed detection platform allows correlation with other data sources, endpoint events, network traffic, and identity signals. Without it, each data source sits in its own silo, and the attack patterns that cross them stay invisible.
Make Your Microsoft Security Best Practices Operational
Implementing Microsoft 365 best practices isn’t a one-time project. The environment changes constantly, new users, new apps, new permissions granted, old ones forgotten.
A sustainable approach includes:
- Quarterly access reviews: Remove stale accounts, unnecessary admin roles, and unused external shares
- Monthly Secure Score review: Microsoft’s Secure Score gives a running benchmark of configuration against best practices; it should be tracked, not ignored
- Ongoing phishing simulation and training: Technical controls only cover part of the attack surface; the human layer needs regular testing
In Conclusion
Microsoft 365 security isn’t a checkbox; it’s a configuration discipline that most organizations have never treated seriously enough. The defaults will not protect you. Legacy protocols, permissive sharing, unmonitored admin roles, and missing Conditional Access policies are the gaps attackers are actively targeting.
BNMC conducts M365 security assessments and remediates the configurations that put businesses at risk; without disrupting daily operations.
Next in this series: even when your own environment is locked down, your vendors can become the breach vector. The next piece covers third-party risk management; what happens when a vendor you trust gets hit, and what controls should already be in place before that call comes in.
Frequently Asked Questions (FAQs)
1. We have Microsoft 365 Business Basic, is it worth adding security controls at that tier?
Yes, several high-impact controls like audit logging, MFA enforcement, and phishing filters are available across all tiers and should be configured regardless of license level.
2. How do we know if legacy authentication is still enabled in our tenant?
Sign-in logs in Azure Active Directory will show authentication protocol details, filter for “Legacy Auth” clients to see active usage before disabling.
3. Our IT team says our Microsoft 365 is already secured. What should we actually verify?
Ask them to pull the Microsoft Secure Score and show you the Conditional Access policies in place, those two items reveal most of the significant gaps quickly.
4. Can we set up automatic alerts for suspicious activity in Microsoft 365?
Yes, Microsoft Defender for Office 365 and Microsoft Sentinel both support alert rules for high-risk events like mass file downloads, new mail forwarding rules, and impossible travel sign-ins.
5. How often should we review our Microsoft 365 security configuration?
At minimum quarterly, and any time there’s a significant change, new admin roles assigned, new third-party apps connected, or a major organizational shift like an acquisition or departure of a senior employee.
