Shadow IT: How Employees Accidentally Become Insider Hackers

How can shadow IT cripple a company? The CyberFlow cybersecurity team has countless examples, but this one is the most recent. A financial services firm discovered that its biggest security breach didn’t come from elaborate phishing schemes. It came from their own marketing team using a “harmless” project management app to collaborate on client campaigns.

The app seemed innocent enough, and it solved their immediate problem of coordinating deadlines across remote teams. What they didn’t realise was that this tool was quietly syncing sensitive client data to unsecured servers in foreign countries. This represented a massive compliance violation. Essentially, the company’s employees unknowingly became insider hackers.

This is shadow IT in action, and it could be happening in your company right now.

What Is Shadow IT?

The term defines any technology, software, or online service that employees use for work purposes without official approval from the IT department. The most common shadow IT examples include:

• Personal cloud storage accounts
• File sharing apps
• Productivity tools
• AI assistants

These employees are not purposefully trying to break company rules. Most of the time, they’re simply trying to work more efficiently. However, they are unaware that they’re creating serious security vulnerabilities that could expose the entire company to cyber threats.

Why Is Shadow IT So Dangerous?

 IT teams have no visibility or control over these unauthorised tools. Thus, you cannot secure what you cannot see. The result? Your business is exposed to all kinds of insider threats in cyber security.

In our experience, the biggest shadow IT risks come from:

Unsecured Data Sharing

Employees can accidentally leak sensitive company information by using:

• Personal cloud storage accounts
• Popular email services
• Unsecured messaging apps

They are essentially making it easier for cybercriminals to intercept confidential data.

No Security Updates

IT teams regularly apply the latest updates to approved software to patch security vulnerabilities. But unauthorised apps can fly under the radar for months or even years, with no patches and security updates. Using them means leaving the entire company’s IT network wide open to hackers.

Compliance Violations

If your business operates under regulations like GDPR, DORA or PCI-DSS, using unapproved applications can lead to:

• Serious compliance violations
• Hefty financial penalties
• Legal actions from regulators and affected parties

These will not only put a dent in your budget but will also damage your reputation.

Account Hijacking

Using unauthorised tools without proper security measures, like multi-factor authentication, can expose employee credentials. This makes it easier for hackers to gain access to company systems and sensitive data.

Why Do Employees Use Shadow IT?

Most of the time, shadow IT usage isn’t malicious. Employees aren’t trying to put the company at risk. They are just trying to find a way to overcome productivity challenges and workplace frustrations.

They typically turn to unauthorised applications because:

They Find Company-Approved Tools Outdated

Legacy systems are slow, difficult to use, or lack modern features. They are the main reason why employees start looking for better alternatives on their own. They just want to use solutions that help them be more productive.

They Don’t Realise the Security Risks Involved

Many employees assume that popular apps with good reviews must be safe. Many of them do not understand the hidden dangers of unauthorised software.

They Think IT Approval Takes Too Long

If your company has lengthy approval processes for new tools, employees are likely to take shortcuts and find immediate solutions to their productivity challenges.

How to Stop Shadow IT Before It Hurts Your Business

The first step in addressing shadow IT requires a comprehensive, proactive approach that includes:

Creating an Approved Software List

Work closely with your IT team to establish a comprehensive catalogue of trusted, secure applications that employees can use. Update this list regularly with new approved tools and share it with the entire company.

Implementing Strong IT Security Governance

Create a clear information security policy that defines acceptable technology use and creates streamlined processes for requesting new tools. Your IT security governance framework should balance security requirements with legitimate business needs.

Educating Employees About Real Risks

Regular training programs help employees understand that shadow IT isn’t just a policy violation, but a genuine security risk that can:

• Expose customer data
• Violate compliance requirements
• Potentially cost jobs

Use real-world examples and case studies to make the risks tangible.

Providing Secure Alternatives

For every tool you prohibit, offer an approved alternative that meets the same need. If employees have legitimate productivity requirements, help them find secure solutions rather than simply saying “no.”

Let CyberFlow Help You Prevent Shadow IT Problems in Your Company!

Shadow IT is one of the biggest and most overlooked security challenges in an increasingly digital business world. Your employees are rarely acting with malicious intent. However, their use of unauthorised applications creates serious vulnerabilities that cybercriminals can and will exploit.

Don’t wait for a security incident to discover the shadow IT lurking in your organisation. Take action now to protect your business while empowering your employees to work efficiently and securely. Contact CyberFlow today!