Shadow IT is Sabotaging Your Company

The rise of personal email accounts and unauthorized applications in the workplace is creating hidden vulnerabilities, making shadow IT a growing security concern for businesses of all sizes. Often referred to as a "silent IT epidemic," shadow IT exposes businesses to very serious risks, from data breaches to compliance violations.

A recent report highlighted the alarming scale of this issue: In just one year, there was a 182% increase in employees sharing company-owned assets via personal email accounts. Additionally, more than 5,860 encryption keys were found stored in SaaS apps, and organizations saw a 49% rise in sensitive assets being exposed company-wide—with an average of 21,000 new assets shared externally each week.

Shadow IT is a concern for all organizations in today’s world, as employees could potentially access any of thousands of free or cloud-based apps, possibly without the knowledge of their IT departments. While these apps often promote themselves as being helpful, AI-assisted work productivity enhancers – they could also pose risks for business data security. 

The Growing Risks of Shadow IT 

In our increasingly digital workplace, employees have access to thousands of free and cloud-based applications, often without IT oversight. While many of these tools claim to enhance productivity—especially AI-driven applications—they can erode business data security and increase legal risks.

The fact is that employees will use whatever technology is available to them. Some will use it for efficiency, while others may use it to avoid public disclosure. In addition, Bring Your Own Device (BYOD) policies allow employees to use their personal devices for work, but also make it nearly impossible for IT departments to control what workers do with those devices. 

Organizations that fail to address shadow IT face serious consequences. If sensitive data is shared via unauthorized applications, companies may violate legal and regulatory compliance requirements—leading to potential lawsuits, fines, and other penalties. Employees using encrypted or self-destructing apps like Signal or Confide to discuss sensitive matters may inadvertently create compliance gaps if records are not properly archived. The issue isn't just the use of these apps—it's the lack of official recordkeeping and security controls.

It’s the responsibility of a company’s Chief Technology Officer (CTO), IT department, or IT service provider to find ways to highlight shadow IT issues and to recommend ways of mitigating risks. This should be part of a comprehensive information governance plan that ensures the company’s compliance with legal and regulatory requirements.

How to Manage Shadow IT

Although shadow IT may seem like an impossible challenge, there are proven strategies for controlling and containing the threats. Below are six best practices Elevity recommends to our clients who are concerned about unauthorized IT use.

Six Best Practices to Combat Shadow IT

1. Understand Employee Needs
   Identify the tools and technologies employees need to work efficiently and securely. Where possible, offer approved alternatives to reduce the temptation of using unauthorized applications.
   
   
2. Develop a Strong Information Governance Policy
   Ensure your organization has a comprehensive policy that directly addresses shadow IT risks and provides clear guidelines on acceptable technology use.
   
   
3. Educate Employees on Secure Practices
   Regularly train staff on the risks of using personal devices and unauthorized apps for work, emphasizing the importance of data security and compliance.
   
   
4. Leverage IT Security Solutions
   Implement enterprise-grade security tools to monitor, detect, and prevent unauthorized access or data sharing across cloud applications and personal devices.
   
   
5. Simplify Compliance for Employees
   If your organization is subject to regulatory audits or legal record-keeping requirements, make it easy for employees to copy or forward messages to company-approved storage systems.
   
   
6. Prohibit the Use of Self-Destructing Messaging Apps for Work
   Ban the use of encrypted and self-destructing communication apps, such as Signal, Confide, WhatsApp, and Snapchat, for business purposes unless proper compliance measures are in place.

Cybercriminals frequently use shadow IT loopholes to infiltrate networks, steal data, and hold systems hostage, and employees may unknowingly create access points for them by using unapproved applications. Learn more about the five biggest cybersecurity risks employees pose (and how to mitigate them by downloading our complimentary “Shining a Light on Shadow IT” infographic now.