The Hidden Risks Lurking in Shadow IT

30 Oct 2025, by Micron21

When it comes to securing your infrastructure, visibility over all your assets is paramount. Without the ability to monitor and manage your systems, ensuring your organisation is truly secure becomes an impossible task. One area that is often overlooked is the software and tools your staff choose to use, which can pose a significant risk to your organisation.

This practice is known as "Shadow IT"—the unapproved and sometimes unknown tools, applications, and services that staff use to perform their jobs. While often adopted with good intentions, these unsanctioned resources can introduce serious risks to your systems and data.

This article will explain what Shadow IT is, why it happens, and what we can learn from it. Most importantly, we will outline practical ways you can protect your organisation from the vulnerabilities it creates.

What is Shadow IT?

Shadow IT refers to the use of any software, hardware, or information technology resources within an organisation without the explicit approval or knowledge of the IT department. This can range from using personal cloud storage accounts to transfer work files, to adopting new project management tools or even using unauthorised AI platforms to assist with daily tasks.

The primary danger of Shadow IT lies in its lack of oversight. Because these tools operate outside of the organisation's established security protocols, they can create significant vulnerabilities. The main risks include:

• Data Leakage and Theft: When employees use unsanctioned applications to store or share sensitive company information, the risk of data breaches increases dramatically. These platforms may not have the robust security measures your organisation requires, leaving data exposed.
• Malicious Software: Unvetted software can be a trojan horse for malware. Malicious code can be hidden within seemingly legitimate applications, giving attackers a backdoor into your network.
• Compliance Issues: Many industries are subject to strict data protection regulations. The use of unapproved tools can lead to non-compliance, resulting in hefty fines and reputational damage.

This is why we have previously discussed the importance of managing and monitoring all connected devices through robust endpoint security. As noted in a previous article, with 80% of malware evading traditional antivirus applications, signature-based protection is no longer sufficient. However, to properly address the risks of Shadow IT, we first need to understand why employees turn to it in the first place.

Why Does Shadow IT Occur?

While it might be easy to blame staff for using unapproved applications, Shadow IT often highlights an unmet business need. The tools, services, and software that employees independently adopt are usually chosen because they help them complete tasks more quickly and efficiently.

The presence of Shadow IT can indicate that:

• The tools provided by the company are inadequate or outdated.
• Staff are unaware of approved tools that are already available to them.
• There are gaps in the company's existing software stack.

In many cases, these "shadow" tools actually help your staff become more productive. Instead of simply banning these applications, a more effective approach is to treat their emergence as a learning opportunity. It allows you to discover:

• Tool Gaps: Identify any deficiencies in the software and services available to your staff.
• Alternative Solutions: Uncover new tools that could help your employees perform their jobs more effectively if officially adopted and secured.
• Training Needs: Pinpoint areas where additional training is required, so staff are aware of the approved resources at their disposal.

How to Protect Your Organisation from Shadow IT

Once you have identified existing gaps, the next step is to implement controls that ensure only approved applications are used on your infrastructure.

Implement Application Allowlisting

One of the most effective methods for controlling Shadow IT is through application allowlisting. This security practice involves creating a list of approved applications that are permitted to run on your network endpoints. Any application not on this list is automatically blocked. This "default deny" approach is a core feature of solutions like ThreatLocker, which helps prevent unauthorised software, including ransomware and other malware, from executing.

Control Browser-Based Applications

With the rise of SaaS (Software as a Service), many applications and services are now browser-based. This presents a new challenge, as employees can access a vast array of tools directly through their web browser, bypassing traditional endpoint controls.

The rapid adoption of AI tools is a perfect example. A report from Palo Alto Networks, "Threat Frontier: Prepare for Emerging AI Risks," predicts that AI tools will accumulate a billion users within seven years. Many of these tools are free and accessible to anyone with a browser, making it crucial to consider what is allowed and disallowed.

Controlling which websites your staff can access might be the only foolproof way to protect against this. While some organisations might opt to block access to all but a list of pre-approved websites, a less heavy-handed approach is to block specific domains that are deemed risky or unapproved.

Addressing the Root Cause of Shadow IT

Shadow IT is more than just a security risk; it's a clear signal that your employees' needs are not being fully met by your current IT environment. By taking a proactive and understanding approach, you can turn this challenge into an opportunity for improvement.

If you have questions about how to prevent Shadow IT within your organisation—or better still, how to address the problems it highlights—we are here to help.

You can email us at sales@micron21.com or call us on 1300 769 972 (Option #1).