Organizations need to be aware of the risks of insecure file-sharing practices and
take steps to prevent data breaches, malware and other forms of cyberattack.
Team collaboration solutions enable remote and hybrid work models by allowing dispersed colleagues to remain connected, share ideas and solve problems from any location. Cloud-based file sharing has become an essential component of the collaborative experience.
Online file-sharing solutions have become nearly ubiquitous because they make it easy for team members to share electronic documents, videos and other digital media necessary to keep important projects on track. Various studies have found that nearly 40 percent of corporate data in the cloud is related to file-sharing services.
Security is a serious concern, however, particularly when employees use unauthorized, consumer-grade file-sharing tools. When employees use these “shadow IT” file-sharing services, IT teams typically have no insight into where data is stored, who is accessing it or how long it is being retained. Worse, data can be exposed to a range of security risks.
The Risks of Unsecure File-Sharing
Data breaches and leaks are a significant threat. Consumer-grade file-sharing services often have weak access controls, increasing the risk that sensitive or proprietary data is exposed. Sharing files with public links can also allow malicious actors to gain unauthorized access. Additionally, employees may share files with the wrong people or give business partners broad access permissions to company data.
Disgruntled employees or other insiders may intentionally share confidential information such as client lists with external parties. Mishandling sensitive data can lead to compliance violations, potentially resulting in legal and financial penalties.
Attackers can bundle malware, ransomware and other malicious code into files, exposing the company network to attack if an employee opens the file. File-sharing can be a vector for supply chain attacks, in which the malicious actor embeds malware into a third-party’s services to target that company’s customers and business partners.
On-Prem or Online: Which Is Better?
On-premises systems generally offer greater control and reduce the threat surface, but there are caveats. Organizations must have the staff and expertise necessary to manage and maintain file servers along with an array of security tools. Failure to patch or update systems in a timely manner can create significant vulnerabilities. This became evident in July 2025, when Microsoft warned of active attacks on SharePoint file-sharing servers.
Cloud-based solutions shift much of the security burden to service providers, who can usually deliver better protection than in-house IT teams. Because they provide services to large numbers of customers, it is easier and more economical for providers to hire a team of security specialists and implement comprehensive security measures.
Recent security breaches demonstrate that providers aren’t infallible, however. In December 2024, the Clop ransomware gang claimed responsibility for a series of attacks on three file-sharing software products. In April 2025, a provider disclosed that a critical zero-day vulnerability was being exploited in its enterprise file-sharing platform.
Essential Security Features
In light of the potential threats, organizations must do their due diligence when selecting a cloud-based file-sharing service. Look for a provider who can offer these key features:
- End-to-end encryption (E2EE). With E2EE, the sender encrypts files and the data can only be decrypted by the intended recipient. Files can’t be viewed by external hackers or the service provider.
- Rights management features. Administrators can create different permission settings to ensure only intended recipients can access and see files. Leading solutions also enable administrators to restrict forwarding, limit viewing time and recall documents after they have been shared.
- Regulatory compliance. Many regulations require some form of encryption for file transfer and storage. Others require stronger features, such as the ability to trace file management and track users in the system.
Despite the risks, file sharing is a critical component of today’s collaborative work environment. However, organizations can’t afford to be complacent about securing services designed for sharing financial data, customer records and other sensitive business information. Organizations should make it a priority to implement a secure file-sharing service for remote and hybrid workers.
