Integrating Azure Key Vault for secure credential management in D365 F&O

In modern enterprise integrations, protecting sensitive credentials such as API keys, client secrets, and certificates is essential. Traditional methods—hardcoding secrets in X++ code, storing them in parameters, or saving them in plain-text tables—introduce significant security and compliance risks.

Azure Key Vault solves this challenge by providing a secure, centralized, and encrypted store for all secrets. With native support in Dynamics 365 Finance and Operations (D365 F&O), developers can retrieve secrets programmatically without exposing them in code.

This guide provides a clear overview of Azure Key Vault, explains what it is, and walks through the complete process of integrating Key Vault with D365 F&O, including configuration steps and X++ examples.

Why use Azure Key Vault with D365 F&O?

Using Azure Key Vault as your secret management solution provides several core advantages:

1. Eliminates hardcoded secrets

Credentials are no longer stored in X++ code, configuration forms, or custom tables.

2. Secure, encrypted storage

Secrets are stored using Azure’s industry-leading encryption, including support for Hardware Security Modules (HSMs).

3. Supports secret rotation

Credentials can be updated or regenerated without modifying or redeploying code.

4. Role-based access control (RBAC)

Access is governed through Azure Active Directory, ensuring only approved services and users can retrieve secrets.

5. Compliance & auditing

Azure Key Vault meets major compliance standards (ISO, SOC, GDPR) and provides detailed access logs for monitoring and audit trails.

Azure Key Vault architecture (High-level)

Understanding the Azure Key Vault architecture helps clarify how D365 F&O interacts with secured secrets:

1. Azure Active Directory (AAD) authenticates D365 via an App Registration.
2. D365 uses the App Registration’s Client ID and Secret to request access.
3. At runtime, D365 retrieves secrets from Key Vault in Azure using a secure REST API.
4. Secrets are never stored in application code, configuration parameters, or database tables.

Read more: Is your Dynamics 365 environment really secure? Uncover the hidden risks

This provides a clean separation between application logic and confidential credentials.

Step 1: Create Azure Key Vault

To configure Azure Key Vault:

1. In the Azure Portal, select Create a resource.
2. Search for Key Vault, then select it.
3. Click Create.
4. Fill in the required details:
   1. Name: e.g., Contoso-Vault2
   2. Subscription
   3. Resource Group
   4. Location
5. Keep default encryption settings.
6. Click Create to deploy.

This completes the first part of setting up the vault.

Step 2: Create a secret in Azure Key Vault

Once your vault is deployed:

1. Open your Key Vault (e.g., Contoso-Vault2).
2. Locate the Vault URI — example:
   https://contoso-vault2.vault.azure.net/
3. Navigate to Secrets → Generate/Import.
4. Add your secret value (e.g., API key, client secret).

This prepares the Key Vault for use by D365 F&O.

Step 3: Configure Azure Key Vault in D365 F&O

In D365 F&O, navigate to:

System administration → Setup → Azure Key Vault parameters

Enter:

Save the settings and validate the connection.

This step authorizes D365 to securely read from Azure Key Vault.

Step 4: Add secret references in D365 F&O

In the Azure Key Vault Parameters page:

• Add a row for each secret you want D365 to read.
• Enter the name exactly as defined in Key Vault.
• Click Validate to test connectivity.

Once validated, D365 can retrieve the secret at runtime.

Retrieve secret in X++

Below is a typical X++ example for retrieving secrets:

Best practices for Azure Key Vault in D365 F&O

To maintain a secure and reliable implementation of Azure Key Vault with D365 F&O, follow these recommended practices:

1. Use secret versioning

Version secrets to prevent accidental overwriting and to support controlled rollbacks when needed.

2. Apply RBAC permissions

Restrict access using Azure Role-Based Access Control so only authorized applications and users can read or modify secrets.

3. Rotate secrets regularly

Update credentials periodically to comply with internal security policies and reduce exposure risks.

4. Leverage Key Vault for all integrations

Ensure every integration—especially those that consume external APIs—retrieves credentials from Azure Key Vault rather than from local configuration.

5. Avoid storing secrets in parameters or custom tables

Do not store sensitive credentials in SysParameters, custom tables, or hardcoded X++ logic.

Following these practices ensures your secret management approach remains secure, scalable, and compliant with enterprise standards.

Conclusion

Azure Key Vault delivers a secure, centralized, and scalable approach to managing credentials for Dynamics 365 Finance and Operations. By integrating Key Vault with D365 F&O, organizations remove the risks tied to hardcoded secrets, maintain compliance with security standards, and ensure sensitive values are retrieved only through controlled, audited access. This approach strengthens overall system security while simplifying long-term maintenance across integrations and customizations.

For guidance on implementinag Azure Key Vault with D365 F&O, contact marketing@confiz.com.