Password Policy Compliance Overview: NIST 800-63, HIPAA, PCI DSS, and the GDPR

In the digital age, where cyber threats loom large and data breaches have become all too common, the humble password remains a vital security gatekeeper. Yet, with stolen credentials accounting for 31% of breaches, according to Verizon’s 2024 Data Breach Investigations Report, it’s clear that organizations often fail to protect passwords.

But how can you ensure your passwords are properly secured? In this article, we’ll take you through password security requirements under NIST 800-63, HIPAA, PCI DSS, and the GDPR. You’ll learn everything you need to know about password policy compliance under these critical standards and why it’s indispensable for your organization’s security. Additionally, you’ll explore common pitfalls in password management and gain actionable insights to strengthen your password strategies.

Why do you need a password policy?

A password policy is a set of rules and best practices established by an organization to ensure the secure creation, use, and management of passwords. You can create a separate password policy or make it part of your general data security policy.

Password policies are designed to reduce the risk of unauthorized access and data breaches by minimizing inappropriate handling of passwords.

Common password handling mistakes

Organizations and employees often unknowingly adopt poor password management practices, which can expose critical systems to cybersecurity threats. The most common mistakes are:

Using weak passwords

Weak passwords, such as “123456” or “qwerty”, are quite common but highly susceptible to brute force attacks. Prioritizing simplicity over security increases the chances of unauthorized access to your sensitive systems.

Storing passwords insecurely

Some users store passwords in plaintext files, unsecured notes, or emails, making them easy targets for cybercriminals. As the 2024 World Password Day Survey reveals, people continue to use memory (54%) and pen and paper (33%) for password management at work. On the organization’s side, security teams may fail to implement proper encryption of passwords in storage and in transit.

Sharing passwords unsafely

Sharing passwords between employees is convenient but can create vulnerabilities if not done safely. For example, passwords sent via a messenger or email can easily fall into the wrong hands, which significantly increases the risk of insider threats.

Reusing passwords

According to the 2024 World Password Day Survey, 48% of respondents reuse passwords across workplace platforms or accounts. This is why using credential stuffing for password attacks is often successful: even if only one account is compromised, attackers can use the same credentials to access others, magnifying the impact of a single breach.

Avoiding regular password updates

Failing to update passwords regularly can result in prolonged exposure of credentials, especially if they are leaked or compromised. Stale passwords become liabilities over time, as attackers have more opportunities to crack them or get them from old data breaches.

Failing to use password management software

Organizations and employees that don’t leverage password management tools struggle with maintaining strong and unique passwords. Workforce password management solutions simplify the creation, storage, and sharing of passwords for your employees, reducing human error and enhancing overall security.

Your password policy is more than just a document needed to pass a security audit, as some see it. It can help you avoid common password-handling mistakes by establishing specific rules, best practices, and tools to manage user credentials efficiently and securely.

Benefits of having a well-flushed-out password policy

While a password policy doesn’t completely eliminate the risk of a data breach, it significantly improves the protection of your most valuable assets. There are six main benefits of having a foolproof password policy, each contributing to the improvement of your organizational security:

Safe password storage

With a strong password policy in place, employees are more likely to store their credentials securely in password managers. For an additional layer of protection, your policy should enforce password encryption on an organizational level, thus enhancing the security of your credentials.

Improved user accountability

By providing your employees with individual credentials for system access, you prevent password sharing and promote personal accountability. When you deploy password management solutions, you can trace each user’s activities back to their unique login, reducing unauthorized actions and aiding in incident investigation.

Streamlined IT management

Password policies establish clear guidelines for your IT security teams, helping them to manage user accounts and passwords more effectively. Automated tools aligned with these policies reduce the burden of password resets and improve the overall efficiency of your IT security efforts.

Reduced attack surface

Enforcing strong password policies helps you keep users’ access privileges current and aligned with their roles, minimizing risks associated with outdated or unnecessary credentials. This approach ensures that users only have access to the information and systems necessary for their job duties, which aligns with the principle of least privilege.

Secure remote connections

With remote work here to stay, a strong password policy helps you prevent risks that come with employees connecting to your network through diverse access points and devices. If you train your remote employees to use strong passwords, you can better protect your organization against unauthorized access.

Better employee awareness

Educating employees about best password practices with a policy raises cybersecurity awareness across the organization. This proactive approach allows you to minimize risky behavior and make employees resilient to phishing and cyberattacks.

In turn, reduced risk of data breaches helps you maintain business continuity, protect your organization’s reputation, and avoid paying fines for non-compliance with cybersecurity requirements.

To get the most out of your secrets management policy, you need to know exactly what criteria to meet. In the next section, we summarize the password policy compliance requirements of four key security standards.

Meeting IT Compliance Requirements with Syteca

Password policy compliance checklist

Depending on your location and industry, your organization may be subject to different standards, laws, and regulations.

Documents with a bearing on password policies contain both requirements and recommendations. Below, we take a look at the four most widely referenced cybersecurity documents:

These documents were chosen because they provide the most detailed and specific requirements for password management and often set the bar for other regulations and standards.

NIST Special Publication 800-63

NIST Special Publication 800-63 provides guidelines for enhancing digital identity and access management. It is the key standard for password security. NIST Special Publication 800-63 emphasizes the importance of strong password policies and provides the requirements for password complexity, length, and regular updates.

When it comes to NIST compliance, a password policy is one of the key tools that an organization can use to meet all the requirements of this standard. Furthermore, NIST lays out fundamental password security criteria, which have been applied by acts such as HIPAA and FISMA.

When creating a password policy, follow these password requirements:

• Length of passwords created by humans — 8 to 64 characters
• Length of passwords generated by a service or system — 6 to 64 characters
• No mandatory password changes
• No password hints
• No knowledge-based authentication, such as secret questions
• Check new passwords against a list of weak and previously compromised passwords
• Store secrets in a form that is resistant to offline attacks
• Support all ASCII and Unicode characters, including the space character

Additionally, NIST recommends using longer passphrases instead of complex passwords, focusing on length over complexity.

PCI DSS

PCI DSS, or the Payment Card Industry Data Security Standard, is a set of policies and protocols established by the PCI Security Standards Council to ensure the security and protection of cardholder payment data. Implementing a PCI DSS password policy is mandatory for all organizations that work with cardholder data from Visa and Mastercard payment systems.

Most of the password security criteria can be found in Requirement 8 of PCI DSS 4.0 [PDF]. Key PCI DSS password requirements are:

• Passwords must be at least 12 characters long (Until 31 March 2025, passwords must be a minimum length of 7 characters in accordance with PCI DSS v3.2.1 Requirement 8.2.3)
• Passwords must contain both numeric and alphabetic characters
• Passwords must have special characters, uppercase, and lowercase letters
• Passwords must be rotated at least once every 90 days
• Newly created passwords must be different from the last four passwords
• Passwords must be encrypted during transmission and storage
• Default passwords must not be allowed
• First-time passwords for new users must be unique for each user and changed after being generated
• Multi-factor authentication (MFA) must be implemented for access to the cardholder data environment and remote access
• After 10 failed login attempts, the user’s account must be blocked for 30 minutes before being renewed by an administrator
• At least two different types of authentication factors must be used

Note that PCI DSS compliance solutions that apply two similar authentication methods, such as two passwords, aren’t considered true MFA. To learn more about what true MFA is and how to implement it, read our article on two-factor authentication categories, methods, and tasks.

GDPR

The GDPR, or General Data Protection Regulation, regulates how entities handle the personal data of individuals located in the European Union. Since many organizations worldwide have customers in the European Union, they must meet GDRP requirements. Your organization may do this with the help of GDPR compliance software.

The German Conference of Data Protection Authorities (Datenschutzkonferenz) released a paper with detailed guidance on how to ensure password security and GDPR compliance. They outlined the following GDPR compliance checklist:

• Passwords should be at least ten characters in length
• Passwords should use numbers and special characters
• Don’t use weak, default, or compromised credentials
• Require password changes in the case of a data breach
• Block a user account if there is a high number of failed login attempts (the exact number is not specified)
• Block login attempts if the same password is used to log in to different accounts
• Use MFA or one-time passwords for accessing critical systems and data
• Encrypt secrets in transit and at rest
• Require secure authentication for password resets

Note that these recommendations are provided by German experts and are not part of the official set of GDPR requirements. However, they can make it easier for you to evaluate your secrets management processes and implement an appropriate password policy for GDPR compliance.

HIPAA

HIPAA, or the Health Insurance Portability and Accountability Act, is the key cybersecurity law for all US organizations that deal with protected health information (PHI). Organizations HIPAA applies to include healthcare providers, health insurers, caregivers, and subcontractors with access to PHI.

HIPAA-compliant password policy requirements are explained in the Administrative Safeguards section of the HIPAA Security Rule under §164.308(5D). HIPAA mandates that covered entities implement “procedures for creating, changing, and safeguarding passwords”.

HIPAA does not specify exact password characteristics (such as length or complexity) but emphasizes the need for robust password policies to prevent unauthorized access to PHI. While it allows flexibility in how organizations implement these policies, adhering to best practices such as those outlined by NIST can significantly enhance security and help organizations remain compliant with HIPAA regulations.

Another HIPAA requirement under §164.312(D) states that covered entities must have processes in place to verify the identity of a person seeking access to electronic health information. This could mean implementing two-factor authentication (2FA).

HIPAA also requires healthcare organizations to implement policies and procedures to ensure that all members of its workforce have appropriate access to health data, which aligns with the principle of least privilege.

Additionally, HIPAA suggests implementing a special procedure for emergency access to restricted data. However, emergency access should only be enabled with proper controls in place to prevent misuse of personal information and data leakage.

To comply with HIPAA requirements and avoid the consequences of HIPAA violations, organizations use specialized HIPAA security software.

Meet IT requirements and master password management with Syteca

Syteca is a comprehensive cybersecurity platform featuring robust capabilities that help you manage insider risks and protect sensitive data from external intruders.

From access management and account discovery to alerts and incident response, Syteca’s rich set of features can help you comply with NIST 800-53, HIPAA, the GDPR, PCI DSS, and other regional and industry-specific security requirements.

In regard to password protection, Syteca allows you to take full control over password management in your organization. Syteca’s workforce password manager provides all the functionality for safe password storing, provisioning, and sharing, enabling a user-friendly and secure experience. Among other capabilities, Syteca allows you to:

• Enable automated password rotation
• Provide temporary secrets to sensitive data
• Verify user identities with two-factor authentication
• Approve access to secrets on request
• Protect privileged account passwords in an encrypted vault
• Identify users of shared accounts
• ​​Securely share credentials among teams
• Manage SSH keys

Conclusion

A strong password management policy is not just a regulatory checkbox but an essential cornerstone of organizational security. Required by NIST 800-63, HIPAA, PCI DSS, and the GDPR, robust password policies help your organization mitigate cybersecurity risks, protect your reputation, and maintain business continuity.

To implement and enforce these password policy best practices effectively, consider an advanced password management solution like Syteca. With its comprehensive feature set, the platform empowers you to get out in front of threats while meeting regulatory requirements. Equip your organization with the Syteca platform to ensure your password policy translates into actionable, secure practices that safeguard your business.