Credential sprawl is outpacing SSO and PAM controls in 2026

At a glance

What this is: This webinar frames credential sprawl as the gap between SSO, PAM, and the unmanaged credentials employees create across SaaS apps, AI tools, and departments.

Why it matters: It matters because IAM teams must govern credentials wherever people and tools actually work, not only where SSO or PAM already has coverage.

👉 Read 1Password's live demo on credential sprawl and AI tool access

Context

Credential sprawl is the accumulation of unmanaged logins, secrets, and work accounts across tools that sit outside identity controls. In this case, the primary problem is not a lack of authentication technology, but a mismatch between where work is happening and where governance is actually enforced.

The article argues that SSO protects provisioned applications and PAM protects privileged accounts, but exposure now lives in the gaps between them. That gap matters for NHI governance because employees, builders, and departments are creating credentials in SaaS, AI tools, and shared business systems faster than central teams can see or review them.

For IAM programmes, the issue is no longer limited to access provisioning. It is about maintaining visibility, ownership, and lifecycle control across human accounts, service-adjacent workflows, and the unmanaged credentials that accumulate when teams bypass the normal entry point.

Key questions

Q: What breaks when employees create accounts outside SSO and PAM coverage?

A: Accounts created outside SSO and PAM usually lack central ownership, lifecycle records, and consistent authentication controls. That creates hidden access paths that security teams cannot easily review, revoke, or audit. The practical failure is not just weak passwords. It is that the organisation no longer knows which credentials exist or which department is responsible for them.

Q: Why do unmanaged SaaS and AI tool logins increase IAM risk?

A: Unmanaged logins bypass the identity processes that give teams visibility into access, ownership, and offboarding. Once business users create accounts directly, those credentials can persist beyond role changes or project end dates. That raises both human and non-human identity risk because the organisation cannot reliably apply lifecycle controls to what it cannot see.

Q: How do teams know if credential sprawl is actually under control?

A: Credential sprawl is under control only when the organisation can identify every active credential, assign an owner, and prove that revocation and review are happening on a repeatable cadence. If departments still rely on local workarounds or shared logins, the programme is still operating with blind spots rather than governance.

Q: Who should own the gap between SSO, PAM, and unmanaged credentials?

A: Ownership should sit with identity governance, but execution must be shared with application, department, and security teams. The key is to make every credential accountable to a named business and technical owner, because no single tool can close the gap if the organisation has not defined responsibility for it.

Background and context

Why credential sprawl forms outside SSO

Credential sprawl emerges when work teams create accounts with work email addresses, local passwords, or social logins instead of using centrally governed identity paths. SSO only controls what has been provisioned into the identity plane, so anything created directly in SaaS, AI tools, or external portals sits outside those controls. The result is a parallel credential estate with weak ownership, inconsistent authentication standards, and no reliable lifecycle linkage to the enterprise identity record.

Practical implication: map the systems where users can self-create credentials and treat those as unmanaged identity entry points.

Why PAM does not close the full credential gap

PAM is built to govern elevated access, not every credential an employee uses across daily work. That makes it effective for privileged sessions but insufficient for departments that hold unmanaged logins in marketing tools, finance portals, or AI platforms. When credentials are created and reused outside privileged workflows, the control problem is not escalation alone. It is the absence of complete credential inventory, scope, and ownership across the organisation.

Practical implication: separate privileged access governance from broader credential governance and cover both in policy and tooling.

What wall-to-wall credential management changes

Wall-to-wall credential management extends visibility and control across the full credential estate, including accounts that never entered SSO and secrets that were created outside IT processes. In practice, this means centralising ownership, enforcing stronger authentication where possible, and creating reviewable lifecycle records for accounts that would otherwise remain ad hoc. The architectural shift is from protecting known identities to governing all the credentials that actually enable work.

Practical implication: build a complete credential inventory before trying to standardise rotation, review, or offboarding.

NHI Mgmt Group analysis

Credential sprawl is a governance failure, not just an authentication problem. SSO and PAM solve different parts of the identity surface, but neither controls the long tail of accounts created directly by business users in SaaS or AI tools. That means the real exposure sits in identities that were never formally provisioned yet still hold operational access. Practitioners should treat unmanaged credential creation as an identity governance blind spot, not a user convenience issue.

Wall-to-wall credential management is the right framing because the attack surface is now departmental. Marketing, finance, sales, and engineering are all shown as separate sources of sprawl, which means identity risk is being created where local work habits override central policy. This is a named concept worth using because it captures the shift from account-by-account control to end-to-end credential coverage. Security teams should reorient governance around where credentials are born, not only where they are expected to be used.

Secret sprawl and credential sprawl are converging into the same failure mode. The source article points to AI tools, SaaS apps, and unmanaged passwords, while NHIMG research shows 88% of security professionals are concerned about secrets sprawl and 43% cite lack of central management. The underlying issue is fragmented ownership across humans and non-human workflows. Practitioners should assume the next access problem will be a blended one, not a single control failure.

Identity programmes that stop at the SSO boundary are already behind the operational reality. The article shows that employees are adopting tools faster than IT can provision them, which means the identity graph is expanding outside formal lifecycle processes. That breaks the assumption that access can be governed only at the point of onboarding. Practitioners should redefine coverage to include shadow accounts, departmental app accounts, and any login created outside the central joiner-mover-leaver flow.

From our research:

• 54% of organisations are dissatisfied with their current secrets management solution because not all secrets are secured, and 43% cite lack of central management, according to The 2024 State of Secrets Management Survey.
• 88% of security professionals are concerned about secrets sprawl, with 49% of those in larger organisations described as "very concerned".
• If sprawl is already the operational problem, the Guide to the Secret Sprawl Challenge shows how teams can narrow the gap between discovery and control.

What this signals

Secret sprawl is becoming the organising concept for identity programmes that used to be split between SSO, PAM, and application governance. Once teams acknowledge that credentials are being created outside central provisioning, the programme conversation shifts from enforcement at the edge to inventory, ownership, and lifecycle coverage. The practical challenge is not whether to add another control, but whether the organisation can still see the full identity estate.

With 88% of security professionals concerned about secrets sprawl, the pressure on IAM teams is to stop treating unmanaged credentials as exceptions and start treating them as a baseline operating condition. That shift should influence control design, audit evidence, and remediation prioritisation across both human and non-human access paths.

The next maturity step is not more login friction. It is a broader governance model that ties department-level app usage, shadow accounts, and secret ownership back to a single identity record, so offboarding and review can work across the whole estate.

For practitioners

• Inventory unmanaged credentials across departments Start with SaaS apps, AI tools, and business systems that allow account creation outside SSO. Build a list of who owns each account, where it was created, and whether it has a documented business purpose.
• Extend governance beyond privileged access Do not limit review cycles to PAM-scoped accounts. Include everyday work accounts, shared logins, and local credentials that appear in marketing, sales, finance, and engineering workflows.
• Create lifecycle ownership for shadow accounts Assign accountable owners to any account that was created with a work email and never provisioned through the identity platform. Require explicit offboarding and review steps for those accounts.
• Prioritise central management over ad hoc fixes Replace one-off password resets and manual exception handling with a single inventory, review, and remediation process for all credentials that sit outside SSO.

Key takeaways

• Credential sprawl exposes the gap between what SSO and PAM cover and what employees actually create in daily work.
• The scale is already material, with most teams worried about secrets sprawl and many dissatisfied with central management.
• Practical control starts with complete inventory and ownership, because you cannot govern accounts you cannot see.

Key terms

• Credential Sprawl: Credential sprawl is the uncontrolled growth of logins, passwords, tokens, and shared accounts across business tools. In practice, it appears when teams create access outside central identity processes, leaving security teams without a complete inventory or consistent lifecycle control.
• Shadow Account: A shadow account is an identity created outside formal IT provisioning or governance. It may be legitimate for a business task, but it still creates risk when ownership, authentication strength, and offboarding responsibility are unclear or inconsistent.
• Wall-to-Wall Credential Management: Wall-to-wall credential management is the practice of governing credentials across the entire estate rather than only privileged or centrally provisioned accounts. The goal is to connect discovery, ownership, review, and revocation into one operating model that covers both human and non-human access paths.

Deepen your knowledge

Credential sprawl, unmanaged secrets, and lifecycle ownership are core topics in our NHI Foundation Level course, the industry's only accredited NHI security programme. If your team is trying to govern accounts that live outside SSO, the course provides a useful starting point.

This post draws on content published by 1Password: Live Demo EMEA on the credential sprawl tour. Read the original.