How to reduce credential risk while passwords and passkeys coexist
For most organizations, passwords remain deeply embedded across enterprise identity systems. Active Directory, legacy business applications, customer login portals, VPN access, third-party SaaS tools, and privileged administrative workflows continue to rely on password-based authentication across large parts of the enterprise. That makes one thing clear: for the foreseeable future, most organizations will operate in hybrid authentication environments.
Recent industry research reinforces this reality. According to Okta’s 2025 Secure Sign-in Trends Report, overall password usage still reached 93% of users in workforce environments as of January 2025, demonstrating how deeply password-based authentication remains embedded in the enterprise. In addition, 56% of organizations still kept passwords as an authentication method even after deploying passkeys. For security teams, the challenge is no longer deciding what comes next. The real challenge is reducing credential risk across environments where both coexist.
This is where identity security becomes more complex—not less. When organizations deploy passkeys, the remaining password layer often becomes the most actively targeted part of the authentication chain. Attackers know this, and increasingly they are succeeding not by breaking in, but by logging in. Threat intelligence continues to show that credential compromise remains one of the most common paths to initial access, reinforcing how often attackers succeed by abusing authentication rather than exploiting software vulnerabilities. This is exactly why hybrid authentication needs its own security strategy.
Authentication modernization gets attention, but it does not remove the need to protect passwords.
Authentication modernization rarely happens all at once. Enterprise identity environments are layered across decades of technology decisions, including on-premises Active Directory, older line-of-business applications, third-party vendor systems, customer login platforms, SSO and federation layers, and privileged access paths. Many of these systems cannot transition to passkeys immediately, and others may never fully transition.
This is why hybrid authentication is the operational reality for most enterprises. Passwords remain widespread, and risk persists wherever password-based access still exists. Treating selective modernization as a complete identity-security solution leaves the most exposed layer untouched. Passwords continue to represent a viable and highly targeted access path. For most enterprises, this is not a temporary inconvenience—it is the operating model that will define identity security for years to come.
This is the part many organizations underestimate. As organizations change selected sign-in paths, the password-based systems that remain often become concentrated points of risk. Attackers increasingly exploit this reality, and recent incident-response reporting continues to confirm what many security teams are already seeing in the field: attackers are logging in with valid access.
This matters even more in hybrid environments. When attackers obtain exposed passwords through phishing kits, infostealer malware, credential dumps, reused personal passwords, or help desk resets, they can still access the systems that continue to rely on passwords. This includes some of the most critical enterprise environments, such as Active Directory, administrative accounts, remote access, and customer-facing portals.
Passkeys do not protect those systems unless they have been explicitly modernized. That means the password layer that remains often carries disproportionate risk. As organizations strengthen newer authentication layers, attackers naturally shift toward the legacy paths that still trust password-based access. In many environments, those paths still connect directly to high-value systems and privileged workflows.
One of the biggest mistakes organizations make is treating authentication as the start of identity risk. It isn’t. Identity attacks often begin long before the login event. The risk starts when credentials are exposed, whether through breach data, dark web marketplaces, infostealer logs, prior credential reuse, or endpoint compromise.
By the time an attacker attempts authentication, the credential may have already been circulating for weeks or months. This is why identity-based attacks are so difficult to detect. The login itself may appear legitimate. There is no obvious exploit, no malware signature, and no vulnerability chain—just successful authentication.
The issue is not only detection. The issue is that exposed credentials often remain valid after exposure. This is especially dangerous in hybrid environments where older systems still trust password-based access. A credential that was exposed in one system can often be reused across cloud services, legacy applications, workforce identity systems, and customer authentication workflows. That is exactly how credential stuffing and account takeover continue to succeed.
This is also why security teams cannot rely solely on traditional access controls. By the time suspicious login behavior is detected, the attacker may already be inside the environment using valid credentials.
Newer authentication methods do not change the operational reality that passwords still protect many critical systems. That distinction matters.
Risk remains concentrated in legacy systems, Active Directory, service accounts, administrative workflows, and unsupported customer applications that still trust passwords. legacy systems, Active Directory, service accounts, administrative workflows, or unsupported customer applications. This is why hybrid environments need layered identity controls.
Security teams should focus first on continuously reducing risk in the password layer that remains while hardening any modern authentication layer already in place. That second part is where credential intelligence becomes critical. The objective is not simply to modernize authentication where possible. It is to ensure the remaining credential layer does not become the weakest path to valid access.
Traditional password policy is no longer enough. Length and complexity requirements can improve baseline hygiene, but they do not answer the most important question: has this credential already been exposed?
A password can be 16 characters long, contain uppercase letters, symbols, and numbers, and still create significant risk if it already exists in breach data. This is the core challenge in hybrid authentication environments.
The systems that still rely on passwords need controls that go beyond static policy. That means screening credentials during password creation and reset, validating them during authentication workflows, and continuously monitoring for newly exposed credentials after deployment. The objective is not simply better passwords. It is preventing previously exposed credentials from being used as valid access paths.
This is especially relevant across Active Directory, workforce identity systems, customer login APIs, and account recovery workflows. As identity attacks increasingly rely on valid credentials, continuous credential screening becomes one of the most effective ways to reduce risk upstream. This aligns directly with the broader market trend that attackers are no longer primarily exploiting systems—they are exploiting trust.
Passwords are not disappearing from enterprise environments any time soon.
Most organizations will continue to operate hybrid authentication environments for years. That means identity security is less about predicting the next authentication model and more about reducing exposure in the password layer attackers can still use today.
Organizations that reduce identity risk most effectively will be the ones that prioritize continuously reducing exposure across the password layer that remains. Because while authentication evolves, attackers will continue targeting the weakest path to valid access—and today, in many environments, that still means passwords.