The most important security settings in Microsoft 365
A single employee's account can open the door to the company's entire email, contracts, payment information, and shared files. Therefore, the most important Microsoft 365 security settings are not just a task for the IT department. They are direct protection for the company's operations, reputation, and ability to continue when an attack or mistake occurs.
Microsoft 365 offers powerful security controls, but they are only effective if they are configured correctly, monitored, and match the company's workflow. Overly strict rules can disrupt normal work. Overly permissive rules make life easy for attackers. The goal is to reduce risk without making things unnecessarily difficult for employees.
Start with multi-factor authentication
Multi-factor authentication, or MFA, is one of the most effective defences against stolen passwords leading to intrusions. Passwords leak in data breaches, are captured by phishing sites, or accidentally fall into the wrong hands. When a user also needs to confirm a login with an authenticator app, security key, or another factor, the password alone is not sufficient.
MFA should be a requirement for all users, but especially for administrators, finance teams, and those who have access to sensitive data. SMS verification is better than no protection, but authenticator apps or physical security keys generally provide better resistance against phishing.
However, this change must be implemented sensibly. Employees need simple instructions, a defined process for lost phones, and support during the initial weeks. Older login methods that can bypass MFA must also be removed. Otherwise, the new rule will only be half-hearted protection.
Protect administrator accounts specifically
Accounts with administrator privileges should not be the same accounts used for daily email and Teams. If such an account falls victim to phishing, the damage can be much greater than when a regular user account is attacked.
Maintain separate administrator accounts, grant privileges only to those who need them, and use the strongest authentication methods for them. Regularly review who has global administrator privileges, whether external parties still require access, and whether old service account access is still active. Administrator privileges that no one remembers are a common risk.
Use conditional access in Microsoft 365
Conditional access allows the company to set rules for when and how users can sign in. Instead of relying solely on username and password, it is possible to evaluate, for example, confirmation with MFA, device status, location, and risk signals in the sign-in.
A good basic rule is to require MFA outside of trusted exceptions, block older authentication methods, and limit administrative sign-ins to approved or compliant devices. Companies with staff on the move or working remotely should specifically consider what happens when attempting to sign in from an unknown country, on an unmanaged personal device, or via an anonymous connection.
However, one rule does not fit all here. Staff on international assignments may require legitimate access from multiple countries. In such cases, it is more sensible to set risk-based rules and warnings than to automatically block all foreign sign-ins. The settings must reflect the actual working practices, not just a wish for perfect security on paper.
Strengthen defences against email phishing
Email is still the most common way into a company. A fake payment request, a shared file that appears to come from a partner, or a message from the "CEO" can be enough to get an employee to hand over login details or pay a fraudulent invoice.
In Microsoft 365, anti-spam, anti-malware, and anti-phishing protection must be configured to take the company's risks into account. Enable protection against spoofing of external domains and display names, scanning of URLs and attachments, and clear actions when suspicious messages are received. Staff should be able to report suspicious emails easily, without having to wonder where to send screenshots.
Technical filtering does not solve everything. Attacks that mimic real business communications can bypass the best filters. Therefore, payment processes must also be robust. Changes to bank details or unusual payment requests should always be confirmed via another communication channel, for example, by calling a known number.
Protect data, not just sign-ins
Unauthorized access is not the only risk. An employee might send a sensitive document to the wrong email address, share a folder too widely, or delete data the company will need later. Correct sharing settings in SharePoint, OneDrive, and Teams are therefore crucial.
Limit anonymous sharing if it is not necessary and set time limits for external access where applicable. Review whether everyone in old Teams groups still needs to see the data. Projects end, partners change roles, and the access list quickly becomes outdated if no one is responsible for it.
Data Loss Prevention can also detect or block sensitive information from leaving the company. Such rules can, for example, react to credit card information, personal data, or financial documents. However, start with monitoring and warnings before automatically blocking everything. This way, you can measure the actual data flow and adjust the rules without interrupting legitimate work.
Data classification supports better decisions
Not all documents are equally sensitive. When a company defines simple labels, for example, General, Internal, Confidential, and Highly Confidential, it becomes easier to apply the right protection. Encryption, restricting forwarding, or requiring special handling can be applied to documents containing sensitive data.
This works best when the classification is simple and linked to actual work processes. If staff have to choose from dozens of categories for each entry, the system will be ignored. Few, clear rules yield better results.
Keep devices under control
A secure Microsoft 365 setup doesn't go far if login occurs from an outdated laptop that has no encryption or clear access control. Devices connecting to company data need to be registered, updated, and have basic protection in place.
Set requirements for screen lock, disk encryption, operating system updates, and malware protection. Conditional access can then restrict access to company data from devices that do not meet these requirements. For some companies, it is appropriate to allow personal devices with limited access. For others, especially where sensitive data is processed, it is more sensible to require managed company devices.
Ensure backups, retention, and recovery
Recycle Bin and retention in Microsoft 365 are useful, but they are not the same as a comprehensive backup and recovery plan. Incorrect deletions, corrupted synchronisations, malicious encryption, or retention requirements can necessitate fast and accurate data recovery.
Define what data needs to be recoverable, how quickly it needs to be done, and who is responsible when something goes wrong. Test recovery regularly. A backup that has never been tested is a hope, not operational security.
Retention policies for email, documents, and communications also need to be defined. Some companies need to retain information due to contracts, laws, or internal traceability. Others need to delete data after a certain period to reduce risk. The right answer depends on the business, contractual obligations, and the data being processed.
Monitor labels and review rules
Security settings are not a one-time task. New staff arrive, users get changed roles, new services are connected to the system, and attack methods evolve. Regular review of logins, administrative rights, shares, and security alerts helps the company find deviations before they become incidents.
It is also important to have a clear process when an employee leaves. Access must be revoked in a timely manner, data transferred to the correct responsible parties, and automatic forwards reviewed. This is simple in theory, but negligence here can keep access open long after the employment relationship ends.
Companies that do not have their own specialist to handle this daily do not necessarily need to hire an entire team. With proper management, regular monitoring, and a responsible operator, Microsoft 365 can be kept secure without complicating the workday. At nexIT, we help companies assess the situation, fix what is missing, and follow up on security so that the technology supports the business instead of becoming a new risk.
A good start is to choose one week to review MFA, administrator privileges, external sharing, and recovery. These four items often give the clearest picture of where the risk lies – and where the company gets the most security for the next working hour.
