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How to Avoid Data Leakage When Using Microsoft Copilot

Josh Krodel

Microsoft Copilot has quickly become a game-changer in how we work. It’s smart, efficient, and teams are excited to put it to work. But here’s the deal: with all this convenience, there’s a risk that sensitive company info might slip out the door without us knowing.

So how exactly do you leverage Copilot’s capabilities to the fullest while keeping your data under lock and key? It’s about striking the right balance—maximizing potential without exposing vulnerabilities. Let’s dive into how you can use Copilot smartly and safely.

What kind of data leakage issues does Microsoft Copilot introduce?

First of all, it’s important to clarify that the severity of risks here will be reflective of the data privacy protocols you currently have in place. The better grasp you have on your current data permissions at different levels of your organization, the better off you’ll be.  

With Copilot’s help, it’s easy to get answers to questions we probably shouldn’t be asking—like how much the boss makes, or private company secrets. This isn’t just about nosiness; it’s a real problem for keeping personal and business information safe, especially with strict privacy laws like GDPR and HIPAA in the picture.

Laws like GDPR and HIPAA set strict rules on handling personal data. Copilot’s ability to pull up any info you ask for could accidentally step over these legal lines if it accesses or shares data it shouldn’t. For example, if Copilot accesses and processes personal data from various sources to help with your query, there’s a risk of violating GDPR principles.

Say you query Copilot about certain data on employees or customers, and it retrieves this information without a clear legal basis or necessary security measures. You might find yourself in hot water for not complying with GDPR.

How this exacerbates the risk to your organization

Now there’s also the issue of IT sprawl. With tools like Microsoft Teams, anyone can create a team and manage who gets in. It sounds great for collaboration, but can turn into a headache when you lose track of who has access to sensitive information.

With tools as powerful and interconnected as Copilot, it now becomes even easier for someone to stumble across data they have no business seeing, simply because the lines on who can access what got blurred.

Potentially more damaging, let’s say an employee goes to share a file via the company’s OneDrive, but accidentally shares the parent folder, giving external parties access to sensitive data. This type of risk is all the more reason to have a clear idea of your current permissions and protocols.

What you should be doing to prevent data leakage with Copilot?

Take an inventory

Start by taking a comprehensive inventory of access rights across your organization. This means not just listing who can see what but delving deeper into the specifics of their access levels. Begin by methodically reviewing and documenting who has the keys to various data kingdoms: from SharePoint folders to Teams channels and beyond.

This step is about painting a detailed picture of access landscapes, which often uncovers unexpected truths. For instance, you might discover that some team members have access to sensitive information that they don’t actually need for their work.

By evaluating who has access to sensitive data and how that data is protected, you can uncover gaps in your security posture. Discovering that certain employees have access to information they shouldn’t is not uncommon during these assessments.

Ensure sensitive data is secure

Any data that is sensitive or confidential must be secured. This means employing robust encryption, access controls, and other security measures to protect data wherever it resides, be it in databases, on shared drives, or within cloud services.

Maintain accurate and up-to-date permissions

Carefully manage who has access to what types of data. It’s not just about assigning people to the right access groups; it’s also about understanding the extent of access those groups provide. Sometimes, employees may have access to information that they shouldn’t, simply because permissions are broader than necessary or have not been updated to reflect changes in roles or responsibilities.

Use existing Microsoft security features

Microsoft’s technology stack includes features designed to help manage and secure access. Use these tools to inventory and monitor who has access to sensitive data. Regularly reviewing access permissions and adjusting them as needed can prevent unintended data exposure.

Monitor usage and implement guardrails

Understanding how employees use Microsoft tools, including Copilot, is essential. Establish guardrails to ensure that the use of these tools aligns with your organization’s data protection policies. This might include configuring settings to limit the types of queries Copilot can respond to or restricting access to certain data sets.

Provide proper training for Co-pilot and other AI tools

Educating your employees about the safe use of AI tools and the importance of data security is critical. Training should cover not only how to use these tools effectively but also the risks associated with improper access or sharing of sensitive information. Getting training from a reputable third party can be incredibly beneficial for both IT teams and knowledge workers alike.

Katalyst conducts thorough security assessment reviews to help organizations maintain robust security standards.

  • We start by interviewing stakeholders to understand your unique environment, and giving you tailored improvement recommendations.
  • We can then take a look at your environment to pinpoint where your security posture can be enhanced, such as correctly setting permissions and sensitivity labels, or any other improvements and best practices that are appropriate.
  • We’re then able to implement those recommendations, even within firewalls or within SaaS platforms.


Even if you decide not to work with Katalyst, we highly recommend getting a comprehensive review of your security measures. This includes ensuring your permissions are accurately managed and sensitivity labels are correctly applied, safeguarding your data effectively. It’s about knowing where you stand and where there’s room for improvement to keep your data safe and your operations running smoothly.

And remember: just because you prepare for a Copilot implementation, doesn’t mean it’s one and done. Be sure to continuously evaluate your environment and adjust permission settings as necessary.

Josh Krodel

Consulting Engineer

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