Secure Your Network: NIS2 Password, MFA & AD Best Practices

The EU’s NIS2 Directive has expanded cybersecurity obligations across numerous sectors, demanding stricter risk management and proactive identity and access management (IAM) practices. For many organizations, achieving compliance means hardening their Active Directory (AD) infrastructure, which often serves as the central hub for authentication and authorization. CISOs must now ensure robust password policies, enforce multi-factor authentication (MFA), and apply the principle of least privilege, all without disrupting daily business functions. Legacy AD environments frequently suffer from weak password rules, shared accounts, and excessive user permissions, making them insufficient for meeting NIS2’s stringent standards. The directive also introduces requirements for continuous monitoring and auditability, compelling cybersecurity leaders to maintain logs and reports that demonstrate compliance with password hygiene and AD configuration rules.

Strengthening Active Directory is critical under NIS2 because it stores identity data for users and systems and controls access to vital organizational resources. When AD is misconfigured or vulnerable, attackers can escalate privileges, move laterally through the network, and compromise critical systems. A compromised AD effectively grants access to the entire network, violating the core security principles outlined in NIS2. Common AD password policy limitations include insufficient complexity rules, failure to screen for breached passwords, lack of context-aware policies, and static rules that don’t adapt to new threats or user behavior. A strong domain password policy is essential for protecting systems and maintaining NIS2 compliance.

To align AD password policies with NIS2 standards, organizations should implement Fine Grained Password Policies (FGPP). These allow different password and lockout rules for distinct user groups within the domain. It’s also important to revise default AD password policies, which apply broadly, and use FGPP to target specific user sets. Encouraging passphrases, long, memorable combinations of words, instead of complex passwords can improve usability without sacrificing security. Integrating compromised password detection and enforcing resets for flagged accounts adds another layer of protection. Finally, setting up MFA for all users and services accessing AD is a foundational step.

While MFA is a core requirement under NIS2, not all forms offer the same level of security. Basic SMS or email-based one-time passwords (OTPs) can be vulnerable to phishing and social engineering attacks. Phishing-resistant MFA is vital for defending against these threats. The U.S. Cybersecurity and Infrastructure Security Agency (CISA) recommends phishing-resistant MFA as the gold standard, especially for high-value targets and system administrators. FIDO/WebAuthn, developed by the FIDO Alliance and standardized by the World Wide Web Consortium (W3C), is the most widely available phishing-resistant method. It supports authentication through physical security keys or built-in device authenticators, often incorporating biometrics or PINs for added security.

Managing the full lifecycle of Active Directory accounts is another key aspect of NIS2 compliance. Privileged accounts, in particular, require careful oversight. Organizations must maintain an inventory of all accounts with elevated access. Local admin accounts are especially risky, as the same password is often reused across multiple machines, enabling lateral movement by attackers. Applying only the permissions necessary for a specific role or task helps prevent credential misuse and privilege escalation. Service accounts, which enable applications and automated processes to run without human intervention, are frequently overlooked and may have excessive privileges. These non-human identities must be monitored under NIS2, just like user accounts. Dormant accounts, those inactive but still enabled, pose a significant risk and should be flagged for regular review. Secure offboarding processes are just as important as onboarding to ensure unused accounts are deactivated promptly.

NIS2 mandates that organizations maintain reporting capabilities to demonstrate compliance, including audit-ready access records and the ability to report incidents within 24 hours. This represents a significant shift from the original NIS requirements, which lacked strict timelines. Firms must also provide continuous updates as new incident details emerge, requiring robust logging and recording systems. AD event logs must be retained to support forensic investigations following a breach. Beyond incident reporting, organizations must thoroughly document their governance processes, including password reset workflows. Each reset should be logged with details such as who initiated it, from where, and when, supporting both incident reporting and forensic analysis.

Meeting NIS2 identity requirements, reporting obligations, and AD hardening can be challenging to manage alone. Partnering with a trusted supplier can ease the burden on in-house teams while ensuring compliance. Solutions like Specops Password Policy help organizations meet regulatory requirements by offering real-time breached password protection and advanced policy management capabilities. For MFA, Specops Secure Access provides phishing-resistant authentication that fulfills NIS2 mandates. Additionally, Specops Password Auditor scans AD environments to detect security weaknesses related to password settings and inactive user accounts.

NIS2 compliance is now mandatory for a broad range of organizations, requiring an active approach to cyber risk management centered on identity and access controls. Proactive measures, such as hardening Active Directory, implementing MFA, and maintaining auditable technical controls, are essential for building resilience in today’s threat landscape. Ultimately, NIS2 compliance is more than a legal obligation; it represents an opportunity to establish a foundation for long-term, proactive cybersecurity defense.

(Source: Info Security)