Power Platform Data Loss Prevention: Why Your Business Data Leaks Through Microsoft 365

Your finance team just built a Power BI dashboard showing profit margins. Marketing created a Power Automate flow that processes customer data. Sales built a Power App that connects to your CRM.

Here's the problem: none of them know what data they can legally share. And Microsoft's default settings? They assume everyone in your organisation should see everything.

We've audited dozens of UK SMEs using Power Platform, and 90% have the same issue - sensitive business data flowing freely with zero governance.

The Hidden Data Governance Crisis in SMEs

Most business owners think data governance is for big corporations with compliance teams. But if you're using Power BI, Power Automate, or Power Apps, you're already deep in data governance territory.

Last month, we worked with a Manchester recruitment firm. Their HR team had built a brilliant Power BI dashboard showing candidate pipelines. The problem? It included salary expectations, rejection reasons, and interview notes. And thanks to default sharing settings, their entire sales team could see it.

That's not just embarrassing - it's a GDPR nightmare waiting to happen.

What Power Platform Data Loss Prevention Actually Does

Data Loss Prevention in Power Platform isn't about backing up your files. It's about controlling how data flows between different services and who can access what.

Think of it as digital plumbing rules for your business data:

• Which connectors can talk to each other (can your Mailchimp connector share data with SharePoint?)
• Who can create apps and flows (should your apprentice have the same permissions as your operations manager?)
• What data can leave your organisation (can customer details flow to external services?)
• How sensitive information gets classified (is your pricing spreadsheet treated the same as your marketing content?)

Without proper DLP policies, you're essentially letting anyone in your business create data highways with no speed limits or safety barriers.

The Three Data Leakage Points Every SME Misses

1. Connector Mixing Gone Wrong

Power Platform has over 600 connectors. That sounds brilliant until your marketing person connects your customer database to a social media scheduling tool, and suddenly customer emails are sitting in a third-party service you've never heard of.

We see this constantly. Someone builds a "quick automation" that moves data between services without thinking about where it ends up.

2. Default Sharing Permissions

Here's what happens by default when someone creates a Power BI dashboard:

• Everyone in your Microsoft 365 tenant can potentially access it
• Data sources remain connected to the creator's permissions
• Sensitive filters can be modified by viewers
• Mobile access is automatically enabled

That recruitment firm we mentioned? Their dashboard was accessible to 47 people across the company. Only 3 actually needed to see it.

3. Shadow IT Through Low-Code Tools

Power Platform is designed to let business users build solutions without IT involvement. That's powerful, but it means data governance decisions get made by people who've never heard of GDPR Article 32.

Setting Up Data Loss Prevention That Actually Works

Step 1: Audit Your Current Data Flows

Before you build walls, you need to know what you're protecting. We use this process with every client:

Step 2: Create Realistic Connector Groups

Microsoft's default approach creates three connector groups: Business, Non-Business, and Blocked. But that's too simplistic for real businesses.

Here's what we recommend for most SMEs:

Highly Sensitive Connectors: CRM, accounting, HR systems, banking Internal Business Connectors: SharePoint, OneDrive, Microsoft Teams
Approved External Connectors: Mailchimp, trusted analytics tools Blocked Connectors: Social media, file sharing, unknown services

The rule: connectors in different groups can't share data without explicit approval.

Step 3: Set Granular Permissions

Don't just block everything - that kills productivity. Instead, create permission levels that match how people actually work:

{
  "role": "Marketing Team",
  "permissions": {
    "canCreateFlows": true,
    "canShareOutsideOrg": false,
    "allowedConnectors": ["Mailchimp", "SharePoint", "Microsoft Forms"],
    "dataClassificationAccess": ["Public", "Internal"]
  }
}

The SME-Friendly DLP Implementation Process

Most DLP implementation guides assume you have a dedicated IT team. Here's our approach for SMEs who need to get this done without hiring consultants:

Week 1: Discovery and Documentation

• Run Microsoft's Power Platform Centre of Excellence toolkit
• Export all existing apps, flows, and reports
• Document current data sources and their sensitivity levels

Week 2: Policy Design

• Define your connector groups based on actual business needs
• Create user permission templates for different roles
• Design approval workflows for exception requests

Week 3: Gradual Rollout

Start with the most restrictive settings that don't break existing solutions. You can always tighten up later, but fixing broken workflows under pressure is stressful.

Common DLP Mistakes That Cost SMEs Time and Money

Mistake 1: The Nuclear Option

Blocking everything external because "security". This usually lasts about a week before someone needs to connect to a legitimate service and bypasses the controls entirely.

Mistake 2: Set-and-Forget

Implementing DLP policies once and never reviewing them. Business needs change, new services emerge, and yesterday's blocked connector might be today's essential tool.

Mistake 3: No Communication Strategy

Rolling out new restrictions without explaining why. Your team will find workarounds if they don't understand the business reasoning.

Integration with Your Existing BI & Data Strategy

DLP isn't separate from your data strategy - it's the foundation that makes everything else possible. When you know your data flows are controlled and compliant, you can:

• Build more comprehensive Power BI dashboards without worrying about accidental data exposure
• Let teams create automated workflows through automation tools without constant oversight
• Expand into customer-facing applications knowing your backend data stays protected

What This Means for Your Business

Proper Power Platform DLP isn't about restricting your team - it's about creating guardrails that let them move fast while keeping your business safe.

The recruitment firm we mentioned? After implementing proper DLP policies, they actually expanded their Power Platform usage. Teams felt confident building solutions because they knew the boundaries were clear and the risks were managed.

The cost of getting this wrong keeps going up. GDPR fines, customer trust issues, competitive data leaks - these aren't theoretical risks for SMEs anymore.

But the cost of getting it right is surprisingly low. Most SME DLP implementations take 2-3 weeks and cost less than £5,000. Compare that to the average data breach cost of £2.4M.

If you're using Power Platform for anything beyond basic reporting, you need DLP policies that match your business reality. Not tomorrow, not next quarter - now.

Want to see how your current Power Platform setup measures against proper data governance standards? Get in touch and we'll run a quick audit of your data flows and permissions.