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June 26, 2024
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 min read

A Guide to Secure File Sharing in Microsoft 365

Learn secure file-sharing practices in Microsoft 365 with best practices and advanced protection from Strac DLP.

A Guide to Secure File Sharing in Microsoft 365
Calendar Icon White
June 26, 2024
Clock Icon
 min read

A Guide to Secure File Sharing in Microsoft 365

Learn secure file-sharing practices in Microsoft 365 with best practices and advanced protection from Strac DLP.


  • Microsoft 365 uses encryption, access controls, and DLP for secure file sharing.
  • Enable multi-factor authentication (MFA) and conduct regular security audits.
  • Address phishing and malware threats with vigilance and preventive measures.
  • Strac DLP integration provides advanced threat detection and compliance support.
  • Use secure links and set permissions for safe file sharing.
  • Microsoft 365 has become an essential tool for businesses worldwide, providing a comprehensive suite of applications for collaboration and productivity. With the increasing reliance on digital platforms, ensuring the security of shared files has never been more critical. Protecting sensitive information while facilitating seamless collaboration is a top priority for organizations.

    This guide aims to provide an in-depth look at secure file sharing within Microsoft 365. We will explore the built-in security features, best practices, and advanced measures to enhance file-sharing security. Additionally, we'll highlight how integrating Strac DLP can further safeguard your data, making Microsoft 365 a robust platform for secure collaboration.

    Let’s get started.

    Understanding Microsoft 365 File Sharing

    Microsoft 365 offers a comprehensive suite of tools for collaboration and productivity, with file sharing being a core component. It enables users to share documents, spreadsheets, presentations, and other files seamlessly across the organization and with external partners. This functionality enhances collaboration, allowing multiple users to work on the same documents simultaneously, track changes, and communicate effectively.

    Key Platforms for File Sharing: OneDrive, SharePoint, Teams

    • OneDrive: OneDrive is a personal cloud storage service integrating with Microsoft 365. It allows users to store files securely and access them from any device. OneDrive supports file sharing through links, which can be set with various permissions.
    • SharePoint: SharePoint is a robust platform for team collaboration and document management. It provides advanced features for organizing, sharing, and managing documents within teams and across the organization.
    • Teams: Microsoft Teams combines chat, meetings, and file collaboration. It integrates with OneDrive and SharePoint, enabling users to share files within conversations and meetings, making it a central hub for team collaboration.

    Security Features of Microsoft 365 for File Sharing


    Encryption is a critical aspect of data security that ensures information is protected as it travels over networks and when stored. Encryption in transit protects data moving between users or systems, while encryption at rest secures data stored on servers or devices.

    How Microsoft 365 Encrypts Shared Files

    Microsoft 365 uses robust encryption protocols to protect files. Data in transit is secured using Transport Layer Security (TLS), which ensures data integrity and privacy. Data at rest is protected using BitLocker and Distributed Key Manager (DKM) encryption methods, safeguarding stored files from unauthorized access.

    Access Controls

    Managing Permissions and Access Levels

    Effective access control is vital for maintaining the security of shared files. Microsoft 365 allows users to set granular permissions, determining who can view, edit, or share files. These permissions can be adjusted at both the file and folder levels, providing flexibility and control over shared content.

    How to Set Up and Manage Sharing Permissions

    1. Select the File or Folder: Choose the item you want to share.
    2. Click on "Share": This will open sharing options.
    3. Set Permissions: Choose whether the recipient can view or edit the file. You can also set an expiration date for the shared link, but require a password for access.
    4. Specify Recipients: Enter the email addresses of the people you want to share with and send the invitation.

    Data Loss Prevention (DLP)

    Data Loss Prevention (DLP) is a feature in Microsoft 365 that is designed to prevent the accidental sharing of sensitive information. DLP policies help identify, monitor, and protect sensitive data across emails and files. These policies can be configured to detect content that matches specific criteria, such as credit card numbers or personal identification information.

    How to Create and Enforce DLP Policies

    1. Access the Security & Compliance Center: Navigate to the Microsoft 365 Security & Compliance Center.
    2. Create a New Policy: Select "Data loss prevention" and create a new policy.
    3. Define Policy Scope: Choose the locations (e.g., SharePoint, OneDrive) where the policy will be applied.
    4. Set Conditions: Define the conditions that will trigger the policy, such as the presence of sensitive information types.
    5. Specify Actions: Determine what actions will be taken when a policy match is found, such as blocking the sharing of the document or notifying an administrator.
    6. Review and Implement: Review the policy settings and implement the policy.

    By understanding and utilizing these security features, users can significantly enhance the protection of their shared files within Microsoft 365, ensuring that sensitive data remains secure and compliant with organizational policies.

    Best Practices for Secure File Sharing in Microsoft 365

    Use of Secure Links

    Secure links are a safer way to share files within Microsoft 365 than direct attachments. They can be created through OneDrive, SharePoint, or Teams and have options to set permissions and expiration dates.

    Steps to Generate Secure Links:

    1. Select the File or Folder: Choose the file or folder you want to share.
    2. Click on "Share": This will open the sharing settings.
    3. Set Permissions: Select the appropriate permissions (view or edit) for the link. You can also add expiration dates and passwords for additional security.
    4. Copy the Link: Once the link is generated, copy it and share it with the intended recipients.

    Benefits of Secure Links Over Direct Attachments

    • Control Access: Secure links allow you to manage who can view or edit the file.
    • Expiration Dates: Set expiration dates to limit the duration of access.
    • Password Protection: Add an extra layer of security with passwords.
    • Avoid Large Attachments: Prevent issues with email attachment size limits by sharing links instead.

    Implementing Multi-Factor Authentication (MFA)

    Multi-factor authentication (MFA) significantly enhances security by requiring users to provide two or more verification factors to access their accounts. This reduces the risk of unauthorized access due to compromised passwords.

    Steps to Enable MFA in Microsoft 365

    1. Access the Admin Center: Log in to the Microsoft 365 Admin Center.
    2. Navigate to Active Users: Select the user you want to enable MFA.
    3. Enable MFA: Click "Multi-Factor Authentication" and follow the prompts to set it up.
    4. Choose Verification Methods: Users can choose from various verification methods such as SMS, phone calls, or authenticator apps.

    Regular Audits and Monitoring

    Regular audits help ensure file-sharing practices comply with security policies and identify unauthorized access. Audits involve reviewing shared files, permissions, and user activities.

    Tools for Monitoring File-Sharing Activity

    1. Microsoft 365 Security & Compliance Center: Provides comprehensive tools for auditing and monitoring.
    2. Audit Logs: Track user activities and changes in file-sharing settings.
    3. Third-Party Tools: Consider additional security tools that offer enhanced monitoring and reporting capabilities.

    Employee Training and Awareness

    Educating employees on secure file-sharing practices is crucial for preventing data breaches and ensuring compliance. Training should focus on recognizing potential threats and following best practices.

    Topics to Cover in Security Training

    1. Recognizing Phishing Attacks: Teach employees how to identify and avoid phishing attempts.
    2. Using Secure Links: Instruct on the importance and method of using secure links instead of attachments.
    3. Managing Permissions: Ensure employees understand how to set and manage file-sharing permissions.
    4. Reporting Suspicious Activity: Encourage employees to report any suspicious activities immediately.

    By implementing these best practices, organizations can significantly enhance the security of their file-sharing activities within Microsoft 365, protecting sensitive data and ensuring compliance with security protocols.

    Common Security Concerns with File Sharing in Microsoft 365

    Phishing and Social Engineering

    Phishing attacks often exploit file sharing to gain unauthorized access to sensitive data. Attackers send deceptive emails or messages that appear to be from trusted sources, enticing recipients to click on malicious links or download infected attachments. Once the user is tricked, the attacker can steal login credentials or distribute malware, compromising shared file security.

    Tips to Avoid Phishing Scams

    1. Verify Email Sources: Always check the sender’s email address for authenticity.
    2. Inspect Links Carefully: Hover over links to view the actual URL before clicking.
    3. Be Cautious with Attachments: Avoid downloading attachments from unknown or unexpected sources.
    4. Report Suspicious Emails: Use built-in reporting tools in Microsoft 365 to flag phishing attempts.
    5. Educate Employees: Regular training on recognizing and responding to phishing attempts is crucial.

    Malware and Ransomware

    Shared files can be a vector for distributing malware and ransomware. These malicious programs can be embedded in seemingly legitimate documents, compromising systems and data when opened. Malware can corrupt files, steal data, or lock users out of their systems until a ransom is paid.

    How Microsoft 365 Scans and Protects Against Malware

    Microsoft 365 employs advanced threat protection mechanisms to scan for and block malware. Files uploaded to OneDrive and SharePoint are automatically scanned for known threats. Additionally, Microsoft Defender integrates with Microsoft 365 to provide real-time protection against malware and ransomware.

    Unauthorized Access

    Unauthorized access occurs when individuals gain entry to files without proper permissions, posing a significant threat to data security. This can happen due to weak passwords, improper sharing settings, or compromised accounts.

    How to Monitor and Control File Access

    1. Regularly Review Access Permissions: Ensure only authorized users can access sensitive files.
    2. Enable Multi-Factor Authentication (MFA): This adds an extra layer of security by requiring a second form of verification.
    3. Monitor Activity Logs: Use audit logs to track access and sharing activities.
    4. Set Expiration Dates for Links: Limit the duration of access by setting expiration dates on shared links.

    Advanced Security Measures

    Using Microsoft Information Protection (MIP)

    Microsoft Information Protection (MIP) provides a comprehensive solution for classifying and protecting sensitive data. It includes features like labels and policies that help users identify, categorize, and secure sensitive information.

    How to Use MIP for Protecting Sensitive Files

    1. Classify Data: Apply sensitivity labels to files and emails based on the level of confidentiality.
    2. Configure Policies: Set up policies to enforce encryption and access controls on labeled data.
    3. Monitor and Respond: Use activity logs and alerts to monitor for unauthorized access and respond to potential security incidents.

    Conditional Access Policies

    Conditional Access Policies in Microsoft 365 allow administrators to define conditions under which access to resources is granted or denied. These policies can be based on factors such as user location, device compliance, and risk level.

    Benefits of Conditional Access in Securing File Sharing

    1. Enhanced Security: Restrict access based on specific conditions, reducing the risk of unauthorized access.
    2. Flexibility: Customize policies to meet the unique security needs of your organization.
    3. Real-Time Protection: Automatically enforce security measures based on real-time risk assessments.

    By addressing these common security concerns and implementing advanced security measures, organizations can significantly enhance the security of their file-sharing activities within Microsoft 365, ensuring sensitive data remains protected against various threats.

    How Strac DLP Enhances File-Sharing Security in Microsoft 365

    Strac DLP (Data Loss Prevention) is a comprehensive solution that protects sensitive data across various platforms, including cloud services like Microsoft 365. It leverages advanced technologies such as machine learning and artificial intelligence to provide real-time threat detection, data classification, and policy enforcement. Strac DLP helps organizations prevent data breaches, ensure compliance, and protect sensitive information from unauthorized access and cyber threats.

    Integration with Microsoft 365

    Strac DLP integrates effortlessly with Microsoft 365 through OAuth-based API connections. This seamless integration allows Strac to monitor and protect data across OneDrive, SharePoint, Teams, and Exchange without disrupting user workflows. The integration process is quick and straightforward, requiring minimal configuration.

    Benefits of Using Strac DLP with Microsoft 365

    1. Continuous Monitoring: Strac provides real-time monitoring of file-sharing activities, ensuring any anomalies or threats are detected and addressed immediately.
    2. Automated Redaction: Sensitive information is automatically redacted from shared files, preventing unauthorized access and data leaks.
    3. Enhanced Compliance: Strac helps ensure compliance with various regulatory requirements by enforcing data protection policies and maintaining audit trails.
    4. User-Friendly Interface: The intuitive dashboard allows administrators to manage security settings and monitor data protection efforts easily.

    Advanced Threat Detection

    Strac’s Machine Learning Algorithms for Detecting Threats Strac employs sophisticated machine learning algorithms to detect and mitigate a wide range of security threats. These algorithms analyze patterns and anomalies in data-sharing activities, identifying potential risks such as unauthorized access, data exfiltration, and malicious file uploads.

    Examples of Threats Detected and Mitigated by Strac

    • Phishing Attempts: Strac identifies and blocks phishing links and malicious attachments in emails and shared files.
    • Malware and Ransomware: Advanced scanning features detect and neutralize malware and ransomware threats before they can compromise data.
    • Unauthorized Access: Continuous monitoring flags unauthorized access attempts, preventing data breaches and ensuring that only authorized users can access sensitive information.

    Compliance and Regulatory Support

    How Strac DLP Helps in Meeting Compliance Requirements (GDPR, HIPAA, etc.) Strac DLP is designed to help organizations comply with stringent regulatory standards, such as GDPR, HIPAA, and PCI DSS. It provides tools and features that ensure data is handled in accordance with these regulations, offering:

    1. Data Encryption: Ensures that sensitive data is encrypted both in transit and at rest, protecting it from unauthorized access.
    2. Detailed Audit Logs: Maintains comprehensive logs of all data access and modifications, aiding in compliance reporting and forensic investigations.
    3. Policy Enforcement: Automates the enforcement of data protection policies, ensuring that sensitive information is managed according to regulatory requirements.
    4. Regular Compliance Audits: Facilitates regular audits to ensure ongoing compliance with regulatory standards, helping organizations avoid penalties and breaches.

    By integrating Strac DLP with Microsoft 365, organizations can significantly enhance their file sharing security, protect sensitive data, and ensure compliance with regulatory requirements. This makes Strac DLP an invaluable tool for any business looking to safeguard its digital assets in the modern digital landscape.


    Microsoft 365’s robust tool suite facilitates secure file sharing and collaboration. However, maximizing shared file security requires a proactive approach, leveraging both built-in features and additional security measures. By following best practices and staying vigilant against potential threats, organizations can ensure their data remains secure and compliant with regulatory standards.

    For enhanced security and peace of mind, consider integrating Strac DLP with your Microsoft 365 environment. Strac DLP offers advanced threat detection, seamless integration, and comprehensive compliance support, making it an invaluable tool for protecting sensitive data. Schedule a demo with Strac DLP today to see how it can bolster your organization's file-sharing security and help safeguard your digital assets against a wide array of threats.

    Founder, Strac. ex-Amazon Payments Infrastructure (Widget, API, Security) Builder for 11 years.

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