Secure Human Behavior – Risky Employee Behavior Fuels Shadow IT

Shadow IT—the use of unauthorized applications, devices, or cloud services by employees—poses one of the most overlooked cybersecurity risks today. Employees often turn to unsanctioned tools to boost productivity or bypass perceived slow IT processes. While the intention may seem harmless, the consequences can lead to data breaches, compliance violations, and operational disruptions.

A 2024 report by Auvik found that only 1 in 4 IT leaders prioritize shadow IT visibility, despite its increasing prevalence. Additionally, shadow IT usage has surged by 59% with remote work, amplifying security vulnerabilities.

This highlights a critical point—shadow IT is not just a technological issue, it’s a behavioral one. Employees often resort to unauthorized tools out of convenience, unaware of the risks they introduce.

In this post, we’ll explore:

• Why managing shadow IT requires addressing employee behavior.
• The financial and operational risks of shadow IT.
• How to deploy secure behavior across your workforce using Keepnet’s tools.

What Is Shadow IT and Why Is It a Threat?

Shadow IT refers to any software, application, or service used by employees without the knowledge or approval of the IT department. This includes personal email accounts, unauthorized cloud storage services, and third-party collaboration tools.

Common Shadow IT Examples:

• File sharing through unauthorized platforms like Dropbox or Google Drive.
• Using personal messaging apps to share sensitive company data.
• Adopting cloud services without informing IT, leading to unmonitored data transfers.

Why Shadow IT Is Dangerous:

• Security Gaps – Unauthorized apps may lack proper encryption and expose data to external threats.
• Compliance Violations – Use of unsanctioned tools can violate GDPR, CCPA, and other regulations.
• Operational Silos – Unsanctioned tools fragment workflows, creating inefficiencies and limiting visibility for IT teams.

To learn more about Shadow IT, check out our blog and see its root causes, risks, and impact on IT departments.

Also, explore Keepnet Security Awareness Training. This solution trains employees on why shadow IT is a risk and how to choose secure, approved tools. It also educates them on the potential fallout of unapproved applications.

The Business and Cybersecurity Impact of Shadow IT

While it can sometimes boost productivity and innovation, Shadow IT poses significant risks to businesses. It can lead to data breaches, compliance violations, and increased cybersecurity vulnerabilities.

Business Risks:

• Regulatory Fines and Legal Exposure – In 2022, the SEC fined Wall Street firms $1.1 billion for using unauthorized messaging apps.
• Data Fragmentation – Critical data stored across unmonitored platforms increases the likelihood of data loss.
• Productivity Loss – Shadow IT creates operational bottlenecks as unapproved tools don’t integrate with enterprise systems.

Cybersecurity Risks:

• Data Breaches – Shadow IT platforms lack oversight, exposing sensitive data to attackers.
• Expanded Attack Surface – Unapproved services introduce unpatched vulnerabilities into the network.
• Insider Threats – Employees misusing unauthorized tools can inadvertently leak or manipulate sensitive data.

Keepnet’s Threat Intelligence helps IT teams identify compromised accounts linked to your corporate email accounts to prevent shadow IT risks.

Learn more about Threat Intelligence.

Real-World Examples of Shadow IT Breaches

Shadow IT has been central to several high-profile cybersecurity incidents, highlighting the potential risks of unauthorized technology use. For example:

1. Finastra Data Leak (2024)

• Incident: Finastra employees used unauthorized cloud storage, exposing 400GB of client data within 24 hours.
• Impact: Confidential client records were offered for sale on dark web forums.

2. Ticketmaster Data Breach (2024)

• Incident: Hackers accessed 1.3TB of customer data due to vulnerabilities linked to unauthorized third-party software.
• Impact: Data from 560 million users was compromised and sold.

3. AT&T Insider Breach (2024)

• Incident: An employee uploaded customer data to personal cloud services, contributing to two data breaches affecting 110 million users.

These examples highlight the real financial and reputational damage caused by shadow IT.

How to Reduce Shadow IT Risks Through Behavior (Step by Step)

Reducing Shadow IT risks requires fostering secure behaviors and awareness across the organization. Here’s a step-by-step approach:

Step 1: Educate Employees on Shadow IT Risks

Many employees engage in shadow IT simply because they don’t realize the risks. Providing education on how unapproved tools lead to breaches is crucial.

Training Focus Areas:

• Risks of storing data on unauthorized platforms.
• How shadow IT bypasses security measures designed to protect the company.
• Encouraging open dialogue between employees and IT.

Keepnet’s Awareness Educator offers real-life examples of shadow IT breaches, making the risk tangible and relatable.

Launch Shadow IT Awareness Training.

Check out the YouTube video below to learn more about Keepnet's Security Awareness Training Library and how to easily assign training to your team:

Step 2: Simulate Shadow IT Scenarios

Simulation exercises can identify employees prone to using unauthorized services.

Phishing Simulations Include:

• Sending phishing emails advertising "unauthorized productivity tools."
• Tracking how many employees click or attempt to download these tools.
• Delivering instant feedback and training to correct risky behavior.

Keepnet’s Phishing Simulator helps simulate shadow IT risks and provides insights on employees who require additional guidance.

Run Shadow IT Simulations.

Step 3: Nudge Employees to Choose Authorized Tools

Behavioral nudges can redirect employees toward secure, IT-approved platforms.

Examples of Nudges:

• Automated prompts that suggest "approved alternatives" when employees attempt to download unauthorized tools.
• Alerts when external file sharing platforms are accessed.
• Reinforcing that IT can approve tools quickly if necessary.

Keepnet’s Awareness Educator automates nudges, ensuring employees consistently use approved resources.

Deploy Nudges to Prevent Shadow IT.

Step 4: Reward and Recognize Secure Behavior

Rewarding and recognizing employees for practicing secure behavior is a powerful way to reinforce positive habits and reduce Shadow IT risks. Here’s how to implement this step effectively:

• Incentivize teams that report shadow IT risks.
• Recognize departments that follow IT policies and suggest new tools through proper channels.
• Use gamification tools to track and reward shadow IT awareness.

Keepnet’s Gamification Dashboard reinforces positive behavior by rewarding employees who consistently follow secure practices.

Explore the Power of Gamification in Security Awareness Training.