The NIS2 Directive (NIS2) is now in effect, but some organizations still haven’t taken action – risking a sharp reckoning as the directive marks a major shift in compliance requirements.
Compared to other cybersecurity legislation, NIS2 is less about ticking compliance boxes and more of a ground-up rethink of an organization’s entire security posture, especially when it comes to privileged access.
We’ve seen this before with GDPR. The General Data Protection Regulation required organizations to completely rewrite their privacy policies and overhaul their approach to data protection. NIS2 brings a similar disruption – this time forcing organizations to reevaluate how they manage their most privileged accounts.
The illusion of security provided by a simple spreadsheet of admin accounts simply won’t cut it under NIS2, coming nowhere near the robust privileged access management (PAM) strategy organizations need in the eyes of NIS2.
With enforcement in place since October 2024, any organization lacking clear visibility into privileged activity is already dangerously behind the curve.
What NIS2 means for access controls
The NIS2 Directive is the EU’s upgraded cybersecurity playbook and matters particularly for entities providing essential or important services to the European economy and society.
At its core, NIS2 demands a fundamental shift in how organizations manage and secure access to their critical systems and data. That includes stricter and more specific security measures across technical, operational and organizational aspects.
Amongst these specific demands, access control measure stands out, including a few non-negotiable requirements:
- Real-time: NIS2 emphasizes the need for continuous monitoring and management of access permissions. This goes beyond static permissions to include dynamic enforcement and the ability to detect and respond to suspicious activities as they occur.
- Risk-based authentication: The directive advocates for robust authentication mechanisms, specifically mentioning multi-factor authentication (MFA) or continuous authentication solutions. Granting access must be informed by the level of risk associated with the user, the resource, and the context of the access attempt.
- Audit-ready: NIS2 includes stringent incident reporting obligations, with notification deadlines and a 24-hour "early warning". To meet this obligation, organizations need comprehensive, detailed audit trails that can prove who accessed what, when, and why.
- Zero trust alignment: NIS2 explicitly encourages the adoption of zero-trust principles. This security model, characterized by "never trust, always verify," challenges users each time they attempt to access an asset, establishing their privileges dynamically.
Broadly, the approach is to significantly limit potential breaches – and aligns perfectly with NIS2's objective of mitigating threats against essential services and the supporting supply chains.
What are the stakes?
Fail to meet the strict demands NIS2 makes on access control, and the implications are severe. Organizations that are unable to produce clean, complete audit trails proving adherence to NIS2 principles are flirting with big financial penalties.
Companies classified as essential entities could face fines of at least EUR 10,000,000 or up to 2% of their total worldwide annual turnover, whichever is higher, while organizations classified as important entities face a maximum of at least EUR 7,000,000 or 1.4% of turnover.
Beyond the financial hit, non-compliance can lead to mandated security audit recommendations and public disclosure of non-compliance – which impacts organizational reputation.
In extreme cases, authorities can even ban CEOs and other legal representatives from exercising managerial functions. This underlines that NIS2 is not just about rules; it’s about accountability – and rules with real teeth.
The challenges of NIS2 compliance
Despite the hazard of non-compliance, inaction stems from significant hurdles in preparing for NIS2, largely due to a pervasive lack of visibility into privileged access.
Many companies simply can't answer fundamental audit questions: who accessed what, when and why? Without a robust PAM solution, this critical data either doesn't exist or is scattered across disconnected spreadsheets and unchecked logs, making it impossible to meet NIS2's stringent reporting and accountability demands.
This issue is compounded by outdated or inadequate access controls, where persistent "standing privileges" violate NIS2's core principles of least privilege and risk-based control.
Manual processes or legacy tools are simply incapable of supporting the real-time enforcement and comprehensive reporting that the directive mandates, leaving organizations vulnerable and non-compliant.
This lax approach is especially dangerous given the inherent risk from admin and third-party accounts, which are essentially the "keys to the kingdom" and prime targets for cybercriminals. And, needless to say, any successful attack could lead to a compliance audit.
PAM is the secret weapon (but only if it’s smart)
The stark reality is that credential abuse remains a top cause of data breaches, with a significant percentage of attacks leveraging stolen credentials. So, it’s no surprise that NIS2 contains stringent demands around privileged accounts.
Without a robust PAM solution, organizations are vulnerable to "permission sprawl," where uncontrolled access privileges dramatically increase the risk of security incidents. Thankfully, privileged access management (PAM) emerges as your critical frontline defense.
Smart PAM solutions protect against both sophisticated external threats and the often-overlooked risks posed by insider actions, and lax credential practices – which works together to boost NIS2 compliance.
A truly "smart" PAM solution, like One Identity Safeguard, goes beyond basic password vaulting. It transforms your security posture, ensuring you're not just compliant with NIS2, but that your security posture is inherently more resilient and "future-proof" against evolving cyber threats:
- Just-in-time (JIT) access: To eliminate standing privileges, NIS2 explicitly champions the principle of least privilege and zero-trust principles. A smart PAM solution eliminates persistent, standing privileges (a common violation of NIS2’s minimum-access principles), significantly reducing your attack surface and bringing you within compliance.
- Session monitoring: NIS2 places a strong emphasis on comprehensive auditing and reporting, including demanding notification deadlines for incidents. Your PAM solution provides robust monitoring and recording, allowing for evidence-ready audit trails and logs for accurate reports to authorities.
- Real-time threat detection: Advanced PAM tools offer real-time monitoring of privileged account activities, enabling immediate detection of suspicious behavior or anomalous access patterns before they can escalate into a full-blown breach.
Being proactive gains time to react and contain an incident – long before it leads to a compliance investigation.
From regulation fatigue to regulatory resilience
The cybersecurity compliance landscape can feel like an endless marathon of new acronyms and ever-stricter mandates. From NIS2 through to the latest PCI DSS 4.0 ruleset and indeed, DORA.
Such a large volume of overlapping regulations leads to "regulation fatigue," which means trying to comply just becomes a tiresome box ticking exercise without ever addressing the fundamentals.
It’s not effective in terms of what the compliance regulation is trying to achieve, and it could well mean that the organization fails an audit because it met the rules on paper – but not in spirit.
As regulators intensify their focus on pervasive threats like supply chain risk and the persistent danger of insider threats, your administrative accounts – and indeed, all privileged access pathways – have rapidly become the new high-risk asset, the place where the regulatory battles are fought.
Yet a smart PAM strategy transcends mere compliance and delivers true organizational resilience, offering true resilience:
- PAM provides the granular control needed to enforce role-based, time-limited access for external vendors and internal teams alike.
- It establishes least privilege access to sensitive data and critical systems, detects unauthorized data access, and can even identify unusual remote user behavior that might indicate an insider threat, thereby eliminating shadow admin accounts or excessive privileges that are so often exploited.
- A comprehensive PAM solution ensures consistent policy enforcement, centralized credential vaulting for passwords and secrets across hybrid and multi cloud.
- Instead of scrambling to compile disparate logs and spreadsheets when auditors knock, PAM ensures you are audit-ready on demand.
- With automated session logs, comprehensive access records, and risk-based controls continuously enforced, you can confidently demonstrate compliance.
This proactive stance significantly reduces regulatory risk exposure, minimizing the chance of fines, reputational fallout, or business disruption due to non-compliance or cyber incidents.
PAM provides the necessary transparency and accountability, ensuring that you can always prove who accessed what, when and why – turning potential audit anxiety into assured peace of mind.
Achieving compliance with the spirit of NIS2
NIS2 is unequivocally clear: It's not enough to simply have cybersecurity policies in place; the directive is rigorously checking for proof of their implementation and effectiveness.
And time and again, the management (or rather mismanagement) of privileged access is precisely where most companies find themselves exposed and vulnerable.
The October 2024 deadline for NIS2 transposition is long past. If you cannot definitively show who accessed your critical systems last Tuesday at 3:14 p.m. - and, crucially, why they had that access, regulators will assume the worst if a breach did occur. And they will fine accordingly.
A robust, "smart" PAM solution is your essential shield, providing the real-time visibility, granular control, and undeniable audit trails necessary to satisfy NIS2's demands not just by checking boxes – but by complying with the true intent of the regulation: Protecting you and your users from cybercrime.
