Last Updated on October 26, 2026 by Satyendra
Security teams can reduce insider risk around sensitive files by identifying sensitive data, limiting unnecessary access, monitoring file activity, detecting suspicious behavior, and investigating potential incidents.
Insider risk is difficult to eliminate because employees and other trusted users need access to sensitive files to do their jobs. The risk can come from malicious insiders, compromised accounts, or accidental actions, such as sharing a file with the wrong recipient.
Access controls are crucial because permissions define what users are allowed to do, while monitoring provides visibility into how that access is being used. Monitoring can help security teams detect potential misuse early and respond before it results in, or increases the impact of, a data breach.
Aidan Simister, CEO at Lepide
According to Lepide’s State of Identity and Data Security 2026 report, 80% of the organizations assessed had excessive permissions to sensitive data. The research also identified more than 230,000 sensitive files across the environments reviewed.
In this blog, we will discuss the key strategies security teams can use to identify, control, monitor, and investigate insider risk around sensitive files.
Five Ways to Reduce Insider Risk Around Sensitive Files
1- Identify Sensitive Files and Who Can Access Them
Knowing which files are sensitive is crucial to managing risk effectively. You must know which sensitive data you have to secure it, determine retention requirements, minimize exposure, and streamline compliance.
The first step in any insider risk program is to gain a comprehensive view of your data assets and access controls.
- Detect files and folders that contain sensitive data regarding the business, customers, finances, employees, and intellectual property.
- Determine who currently has access and who should have it.
- Identify any unnecessary, overly permissive, or outdated access permissions, including permissions from old projects or previous roles.
- Focus on high-risk data such as HR databases, finance systems, source code.
Key Takeaway: Security teams must be aware of both sensitive file locations and access to them. Without this baseline, every control that follows is guesswork.
2- Enforce Least-Privilege Access
Once security teams know where sensitive data resides and who can access it, the next step is to restrict access to users who have a legitimate business need.
- Identify Sensitive Files: Locate files containing confidential business information, financial records, personal data, or intellectual property across file servers, SharePoint, and OneDrive.
- Review Existing Permissions: Identify users and groups with access to sensitive files, including direct permissions, inherited permissions, nested group memberships, and external sharing permissions where applicable.
- Validate Business Requirements: Work with data owners and department managers to determine whether each user or group still requires access to sensitive files.
- Remove Unnecessary Access: Revoke outdated permissions, clean up unnecessary group memberships, and remove excessive or overly broad access without disrupting legitimate business operations.
- Document and Repeat Reviews: Record access review decisions, permission changes, and approvals. Conduct periodic reviews based on data sensitivity and organizational risk, and initiate additional reviews when employees change roles or leave the organization.
Regular access reviews help reduce the number of employees with unnecessary access to sensitive information, lowering the risk of accidental exposure or deliberate misuse.
Key Takeaway: Limiting access to employees with legitimate business needs reduces potential insider risk exposure. Least privilege cannot eliminate insider threats, but it can limit the impact of unauthorized access or misuse.
3- Monitor Access to Sensitive Files
Access control defines who can reach sensitive data. Monitoring clarifies what these people are doing with that access, which is where insider threat programs fail to deliver when they stop at access controls.
- Identify who is accessing sensitive files and folders and when.
- Monitor changes to permissions and security groups, as unexpected privilege changes can increase access to sensitive data and may precede or enable misuse.
- Monitor file read, write, create, and delete actions, not only logins.
- Create a benchmark for what is considered normal file activity for each user or role to make anomalies easier to identify.
- Prioritize detailed monitoring and alerting for sensitive data, privileged accounts, and higher-risk activity while maintaining sufficient broader audit coverage to detect unexpected behavior. This will help keep the number of alerts low while maintaining a high signal-to-noise ratio.
Key Takeaway: Security teams require constant visibility into their users’ file actions, not only their access rights.
4- Detect Suspicious File Activity
Now that monitoring is established, the next step is to determine how one will know when something is “suspicious.” Common indicators of potentially suspicious file activity include:
- Sudden access by a user to many sensitive files.
- File or folder access not related to job tasks.
- Activity taking place far outside normal work hours.
- Large-scale file alterations or deletions.
- Repeated failed or denied attempts to access sensitive files, particularly outside the user’s normal scope of access.
- Permission changes followed by subsequent access to sensitive information.
- Suspicious activity associated with privileged users or service accounts.
Key Takeaway: Individually, many of these actions may be completely benign, such as someone logging on during non-work hours, one failed attempt, or a permission change. The risk usually becomes visible when these events are viewed together rather than in isolation. A permission change followed shortly afterward by unusual bulk access, copying, or transfer of files from a sensitive location is a very different signal from either event on its own.
5- Investigate and Respond to Potential Insider Threats
Detection only has value if it leads to a clear, fast investigation. When suspicious activity is flagged, security teams typically need to:
- Identify which user and account was involved.
- Understand exactly when files were accessed, changed, or deleted.
- Know the user’s permissions and any recent changes in them.
- Examine activity before and after the suspicious event to understand the full sequence, not just the trigger.
- Determine whether the activity was legitimate, accidental, malicious, or the result of account compromise.
- Determine what action should be taken next, including removing unnecessary access or alerting the appropriate teams.
Key Takeaway: Audit trails provide evidence that helps security teams reconstruct what happened, identify which account performed the recorded actions, determine when they occurred, and understand which resources were affected.
Implementing these five practices helps organizations reduce unnecessary access to sensitive files and improve visibility into potentially suspicious activity. However, as organizations increasingly adopt AI tools such as Microsoft 365 Copilot, they must also consider how these technologies affect the discoverability of sensitive information. Employees may be able to discover and retrieve information from files they already have permission to access, including sensitive content they might not otherwise have located.
How Microsoft Copilot Can Increase Insider Risk Around Sensitive Files
Microsoft 365 Copilot does not grant users additional permissions. However, it can make sensitive information they already have permission to access easier to discover through natural-language queries. This can increase insider risk in organizations with excessive permissions, outdated group memberships, or overshared sensitive files in SharePoint and OneDrive.
For example, an employee who retains access to confidential financial documents after moving to another department may be able to discover information from those documents through Copilot, even if they were previously unaware the files existed.
To reduce Copilot-related insider risk, security teams should:
- Identify Overshared Sensitive Files: Locate sensitive files in SharePoint and OneDrive that are accessible to more users than necessary.
- Review User Permissions: Examine direct access, inherited permissions, group memberships, and external sharing settings to identify unnecessary access.
- Remove Unnecessary Access: Revoke outdated permissions and restrict sensitive information to users with legitimate business requirements.
- Monitor Relevant Activity: Use Microsoft Purview audit logs and other available monitoring tools to investigate relevant Copilot interactions and file access activity. Correlate available events where appropriate, recognizing that Copilot interactions do not always generate corresponding file access events.
For a detailed walkthrough, see our guide on How to Identify What Sensitive Data Microsoft Copilot Can Access.
How Lepide Helps Reduce Insider Risk Around Sensitive Files
Lepide helps security teams reduce insider risk by providing visibility into who has access to sensitive data, how that access is being used, and when user behavior becomes unusual. It monitors user interactions with sensitive data across key on-premises and cloud data stores and uses user behavior analytics and anomaly detection to identify changes in behavior that may indicate an insider threat or compromised account.
Security teams can identify privileged users, understand how they gained access, and find users with excessive access to sensitive data based on data usage patterns. Custom policies can also be used to automate the remediation of excessive permissions, helping organizations enforce least privilege and reduce the potential impact of compromised accounts.
For threat detection and response, Lepide combines real-time alerts with pre-defined threat models and workflows to identify suspicious activity and accelerate containment. When signs of account compromise are detected, response actions such as disabling the affected account can be automated.
Lepide also maintains searchable audit trails of events, changes, and user interactions, giving security teams the context needed to investigate what happened, which users or accounts were involved, and what data was affected.
Schedule a demo with our engineers to see how Lepide can help you identify excessive access, detect suspicious file activity, and reduce insider risk around your sensitive data.
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Frequently Asked Questions
Insider risk in file security is the possibility of employees or authorized personnel misusing their access privileges to sensitive organizational files, potentially leading to a data breach. This can involve a malicious employee, a compromised account, or someone making a genuine mistake.
Organizations can prevent unauthorized access to sensitive files by identifying where confidential data files are stored, implementing an approach in which users are given only the minimum level of permissions necessary, revoking unnecessary or outdated rights, and continuously checking who has access to high-risk data.
Security teams should monitor file creation, modification, deletion, and permission changes in vital system directories, configuration files, and sensitive data repositories, including changes to permissions and groups related to sensitive files and privileged accounts.
Security teams can establish baselines of normal behavior and look for meaningful deviations, such as unusual bulk file access, off-hours access, activity unrelated to a user’s role, or permission changes followed by data access.
File auditing offers the comprehensive activity log required to help security teams investigate incidents thoroughly, distinguish potentially normal activity from suspicious behavior, and provide evidence that supports applicable audit and compliance requirements.
Organizations can balance insider risk monitoring with employee privacy by focusing on security-relevant activities, such as unauthorized access to sensitive files, unusual permission changes, and suspicious data transfers. Security teams should limit monitoring to legitimate security purposes, restrict access to audit logs, apply appropriate data retention policies, and comply with applicable privacy laws and organizational policies. Organizations should also avoid unnecessary collection of employee activity data and provide appropriate transparency about monitoring practices.