How should organisations compare password managers with passkeys?

Why the comparison is really about control strength and recovery burden

For most organisations, the right comparison is not “which one stores secrets better?”, but “which control best reduces repeated password risk while remaining supportable during the migration?”. Password managers still have value because they improve reuse, uniqueness and operational hygiene. Passkeys shift the centre of gravity away from shared or reusable secrets, which is why they are a stronger target state where application support is mature.

The practical difference is that password managers help people manage passwords more safely, while passkeys reduce the number of passwords that exist in the first place. That matters because the strongest control is the one that removes the attack path, not just one that helps users cope with it. For broader password and transition guidance, Password Security and Password Manager Guide is a useful starting point.

Passkeys also change the fallback design. If an application, help desk process or recovery flow still relies on passwords, organisations have not fully escaped password risk. That makes transition planning, recovery handling and support workflows part of the comparison, not side issues.

Where passkeys outperform password managers in real-world security

Passkeys are stronger because they are phishing-resistant by design when implemented correctly. A user does not type a reusable secret into a site, which removes credential replay and makes adversary-in-the-middle collection much less effective. By contrast, a password manager can generate strong unique passwords, but it still depends on a password-based login path and on the integrity of the places where those passwords are entered.

That distinction is why passkeys should be treated as the preferred long-term control for supported applications. They are especially valuable where phishing, MFA bypass, session theft or credential stuffing are realistic threats. Passwordless and Passkeys Guide covers the operational and assurance differences in more depth.

Password managers are still useful in mixed estates. They reduce reuse, support stronger random passwords, and make it easier to manage accounts that cannot yet move to passkeys. But their protection is bounded by the password model itself, which is still vulnerable to phishing, reset abuse and downstream account takeover if the secret is captured elsewhere.

How to compare them without creating a false either-or choice

Organisations should compare the two controls by application support, user population, recovery maturity and attack-path reduction. If the service supports passkeys well, they should usually be the first choice. If the service does not support passkeys, a password manager remains the better way to handle passwords until migration is possible.

• Use password managers to reduce password reuse, support migration, and improve user behaviour where passwords remain unavoidable.
• Use passkeys wherever the application, device mix and recovery process can support them end to end.
• Keep a fallback plan for accounts that still need passwords, but do not let the fallback become the default forever.
• Review recovery and account reset workflows as carefully as the sign-in method itself, because weak recovery can undo a strong authenticator.

For organisations that want a concrete identity-and-authentication reference point, NIST SP 800-63 Digital Identity Guidelines is the most directly relevant external baseline for phishing-resistant authentication and authenticator strength.

Risk and Threat Considerations

The main risk is treating password managers as a substitute for modern authentication when they are really a bridge. If an attacker gets a reusable password through phishing, malware, a breach or weak recovery, the password manager has not removed the core exposure. Passkeys reduce that exposure by removing the reusable secret from the normal sign-in path.

Failure mechanism: Password-based sign-in remains vulnerable to phishing, reuse, credential stuffing and recovery-channel abuse, while a compromised password manager vault can concentrate many accounts into one failure point. Passkeys fail more safely when deployment is incomplete, because fallback recovery or unsupported applications can reintroduce password risk.

Impact: The consequence is not just one account compromise, but a larger blast radius if passwords are reused, synced broadly or used for privileged recovery. Organisations that delay passkeys without tightening password-manager hygiene may keep the convenience benefits while preserving the same attack surface.

Practitioner Guidance

What to prioritise: Prioritise passkeys for high-value and phishing-prone applications first, then keep password managers only for the residual password estate. The comparison should be driven by which control removes the most meaningful attack path for each application, not by which tool users prefer.

What to verify: Verify whether the service supports passkeys natively, whether recovery can be completed without falling back to weak knowledge-based checks, and whether shared or privileged accounts still depend on passwords. If the answer is “yes” to the last item, the organisation is still in transition, not finished.

Practitioner takeaway: Password managers are a migration aid and passkeys are the destination, so the best programme is one that uses the former to reduce immediate risk while actively retiring password dependence wherever the application stack allows it.

Related resources from NHI Mgmt Group

• What do organisations get wrong about enterprise password managers?
• What should organisations do differently when password managers also hold secrets and shared vaults?
• Should organisations keep enterprise password managers after passkey adoption starts?
• What do organisations get wrong when they treat passkeys as a full password replacement?