Guest Blog: What is a Password Manager?

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Password Management

We’re pleased to share an important guest post from The average person has many passwords to remember, so a password manager is becoming essential for a variety of reasons.

Many people log in to multiple online accounts every day, including financial, email and social media accounts. Having strong passwords for each websites helps protect consumers from identity thieves. A strong password is complex, long and unique, and, therefore, can be hard to create and/or remember.

Password managers generate and securely store passwords so that consumers don’t have to remember them, but different ones offer slightly different services and levels of protection. Consumers who understand these features can choose one to meet their security needs.

What features matter most?

Password encryption

Saving your passwords in a password manager program isn’t safe if anyone who breaks into the software can immediately access them. Password encryption adds a layer of security by making it harder for thieves to access stolen passwords.

  • Multiple encryption layers: Most password managers require consumers to unlock them with a password, but that’s not good enough; if thieves get the master password, they can view the passwords. Passwords should have at least two or three layers of encryption to make it hard to retrieve them after unlocking the password manager.
  • Restricted access: Some password managers allow users to restrict the geographical locations that can access the software so that thieves in other countries can’t get a consumer’s passwords.
  • Two-factor authentication: Password managers may require users to put in a flash drive as a “key” before unlocking passwords.

Secure resource usage

If passwords are saved using insecure resources, thieves can retrieve them by breaking into the user’s computer itself. Using secure resources eliminates this problem.

  • Secure memory: The password manager writes password information only to secure memory components so that if a hacker accesses the user’s hard drive, he or she can’t easily find passwords.
  • Cryptographic signing: The software requires internal processes to verify their authenticity using cryptographic signing. This prevents hackers from hijacking these processes for malicious purposes, including password theft.
  • Secure mobile integration: Password managers have safeguards in place to verify the authenticity of commands sent from mobile devices. These processes ensure that only authorized devices are used to access the password manager and that the user authorized such access.


Rather than using third-party applications, the password manager stores passwords and attempts logins itself. This is more secure because the password manager itself has control over all such processes.


  • Local storage: Passwords are stored in encrypted form on the user’s computer rather than in the cloud or on a third-party application’s server.
  • Local encryption: The password manager is responsible for all levels of password encryption.
  • Local site certification: The password manager searches for and verifies site certificates before entering the user’s login credentials rather than relying on a third-party credentialing service.

User friendliness

If a password manager service isn’t easy for consumers to use, it defeats the purpose of using it. User-friendly services make it easy for even the least computer literate users to store and retrieve passwords.

  • Intuitive controls: The service has large buttons and clearly-named menu commands to make it obvious what to click or where to go to save, retrieve and input passwords.
  • Provides password creation hints: Users may not know how to create secure passwords. The most user-friendly password managers provide tips and hints to help accomplish this task.
  • Offers password recovery: Password managers must have their own password protection to keep personal info safe, but what if a user forgets the password? Some password managers have user-friendly options for recovering lost passwords without compromising security.

Verifiable design

Password managers need to be secure so that consumers can be comfortable using them. A verifiable design goes a long way towards increasing comfort level because users can check out the programming and find out how the software works.

  • Open source code: The programming code used to design and run the software should be available online for anyone who wants to see it.
  • Design and execution code matches: The same programming used to design the software should be used to run specific functions.
  • Peer review access: Source code should be peer-reviewed prior to the password manager’s release. Users should have access to the peer reviews so that they can learn about any potential weaknesses and how they were resolved prior to release.

Master password security

The password manager’s master password is like the key to a house’s front door; anyone who has it can open the software. Effective security requires that password managers take precautions to stop master passwords from falling into the wrong hands.

  • Password requirements: Some password managers require users to include numbers, letters and sometimes symbols such as # or %. In addition, sometimes passwords are required to be a certain length, and passwords that spell words may be banned. Requiring users to follow these rules ensures that master passwords are more secure than they otherwise might be.
  • Password expiration: Requiring users to change their passwords periodically helps increase security because even if thieves get the old password, they still won’t be able to get into the system. Some password managers also don’t allow users to recycle passwords; the new password must be substantially different from any password used over the past several months.
  • Full password recovery is disabled: If a user loses his or her password, the best password managers don’t provide it. Most software first displays a hint the user has set up when he or she reports a lost password. If the user cannot retrieve the password and requests a reset, he or she receives an email to a link with a temporary password that will only work for 24 hours. This reduces the risk that a thief will request a “lost” password.

What are different types of password managers?

Integrated password managers

Some password managers are integrated into other software. For example, web browsers may ask users if they want to save a password when they log in to a website.

Standalone password managers

Some password managers are separate pieces of software that must be installed on a user’s computer.

Web-based password managers

The user signs into a website in order to access and use his or her passwords.

Hardware-embedded password managers

The user’s computer contains a microchip or other piece of hardware that can save passwords and authenticate the identity of the person trying to retrieve the password.

Who’s it for?

CEOs, managers and other executives

Upper-level employees at large companies may have dozens of passwords they must keep track of to log in to the secure systems they use to do their jobs. For these people, a password manager is an indispensable productivity tool.

People who can’t remember passwords

Some consumers have a hard time remembering passwords and may be tempted to use the same password for every online account or use insecure passwords like “password.” These people need a password manager to help promote the security of their accounts.

Small business owners

Small business owners have a ton of things to remember and may need to log in to various online accounts. Using a password manager gives them one less thing to worry about.

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