Overcoming Shadow IT: The Dark Side of Identity Management Explained

Executive Summary

The modern epoch has provided enough room for the expansion of technology that further assists businesses’ digital transformation journey. With the ongoing digital transformation of a business, there are specific challenges that IT and security teams within the enterprise need to gear up. Since the main areas where IT seeks the help of external partners are cloud operations and migrations, there’s a massive risk of shadow IT.

Those who aren’t familiar with the term “shadow IT”, they are the products or services that your employees use outside your organization’s IT team views. Whether we talk about data breaches, phishing attacks, insecure networks, or malware activity, the growing use of workstream collaboration coupled with shadow IT has severely impacted businesses in the past couple of years. As per reports, the global market revenues from collaboration software are incrementing in recent years and are expected to swell around 13.58 billion U.S. dollars in 2024. These collaborating software services offer sharing, management, and processing capabilities for files and documents and other similar data types among different users and systems.

Let’s learn how shadow IT is becoming a tough nut to crack for businesses securing employees’ and consumers’ identities.

Introduction

With the rise in collaborating services, the risk of shadow IT increases substantially in a CIAM (consumer identity and access management) ecosystem. IT teams need to put their best foot forward to ensure stringent security measures are in place to avoid any data breach that may lead to losses in terms of finances and market reputation. But besides endless security measures, employees still use shadow IT as they aren’t aware of the security risks associated and eventually find it an efficient way of performing their job.

Here are the stats that depict the global collaboration software market revenue from 2015-2024:

This data was about using third-party services under the supervision or administration of IT professionals working within an organization. But what about the ones that didn’t come to the notice of the IT professionals? Well, here’s where the most significant threat lies. Shadow IT projects that are managed without the knowledge of IT professionals leads to considerable losses in terms of finances and business that secures identities of consumers and ends up tarnishing their brand reputation.

Shadow IT and Consumer IAM: What’s the Big Deal?

Every business that collects user information online, including sensitive information regarding consumers, is undeniably at risk from shadow IT as their employees can get into the lucrative traps of utilizing services and apps that aren’t approved by their IT management. Moreover, amid the global pandemic, when businesses that didn’t even plan to sell their services and products were left with no other choice but to go with the flow, the risk of identity theft and security breaches increased significantly.

The poor line of defense and newly adapted remote learning working culture contributed to the increased data breaches and identity thefts, leading to millions of dollars of losses. So does it mean every business collecting user information must consider securing their network through a reliable defense system? Yes, undoubtedly! The risk of shadow IT for businesses in today’s era can be vanished by utilizing a reliable CIAM (consumer identity and access management) solution that shuns any security threat, including shadow IT, for enhanced security.

Let’s dig deep about shadow IT and how businesses can secure their consumer identities and sensitive business information through LoginRadius CIAM.

Security Risks and Challenges Associated with Shadow IT

If your organization’s IT isn’t aware of the use of an application or cannot ensure its security, your business could end up losing the most sensitive information and even consumer identities. Since shadow IT isn’t going anywhere, the risk for businesses utilizing user data and
storing it over the cloud is increasing day by day.

Here are the most common risks for businesses:

Many companies invest in educating their employees, but the majority of them fail to do so, which is perhaps the reason there are more data breaches in companies whose employees aren’t educated. A company’s employees may find certain applications and tools that may seem secure and capable to bump-up their efficiency. Still, they aren’t aware of the potential risks associated with third-party applications that are not under the radar of their IT team. This is inherently dangerous as certain features like file sharing and storage can quickly lead to data leaks causing millions of dollars of losses in just a blink of an eye.

What’s more alarming is the fact that many businesses are not able to detect a breach even after months. And all this happens just because your employees aren’t aware. Apart from this, there are several instances where employees share their work-related documents over personal email, especially in a work-from-home environment. This again increases the risk of a data breach as IT teams cannot monitor certain networks outside the enterprise. This scenario occurs when employees send work documents on their personal emails and devices.

Why Employees Prefer Shadow IT and How to Overcome this Dilemma?

Working more efficiently and saving time is perhaps the most common reason behind employees inclining towards shadow IT. The lucrative offers made by third-party applications to create and manage documents is undeniably the root cause of the increasing number of shadow IT
instances in enterprises. However, not everyone is in favor of working against the company’s policies regarding the use of third-party applications or programs. Some of the employees prefer working around their company’s security policies as it makes them feel safe and secure when it comes to their personal identity and the company’s crucial information. While on the other hand, many of them prefer relying on tools that speed up their processes and help them minimize efforts. Apart from this, a majority of employees agree that they don’t feel like using the long credentials again and again for signing in into the network, while the same work can be done efficiently without the need for login credentials through third-party applications.

This can help cybercriminals to exploit an employee’s credentials to access sensitive information regarding the company and its consumers. Moreover, this is undoubtedly the biggest threat to businesses that are utilizing consumer information as the chances of consumer identity theft increases in this scenario. Only a robust CIAM solution can help businesses in ensuring the finest security for their consumers by adding multiple layers of security in the overall defense system. Enterprises can leverage LoginRadius CIAM to enhance their consumer identity protection and, at the same time, can prevent any data theft, whether it’s caused by an employee’s negligence or through a random attack on the network by cybercriminals. Whether it’s multi-factor authentication (MFA) or risk-based authentication (RBA), LoginRadius ensures every single bit of information regarding a consumer and the organization is securely managed, retrieved, and stored over the cloud.

How Businesses Overcome Shadow IT

Knowingly or unknowingly, overcoming shadow IT is becoming a steep climb for almost every online business that secures user identities during sign-up and registration processes. Here are some of the ways through which enterprises can minimize the risk and ensure their network and consumer information remains secure.

1. Access Management. Access refers to determining that the correct user can access the right resource securely inside a network at the right time. It’s the processes and tools used to control and monitor network access for both on-premises and cloud-based systems. Using an access control solution like LoginRadius CIAM can drastically reduce the chances of a data breach even if cybercriminals have access to the credentials of an employee sacrificed to shadow IT. Controlling access to only the information that is required at a particular level of administration can help businesses overcome shadow IT vulnerabilities since the attackers can only access a limited amount of data, which can’t cause a big threat to consumers and the organization.
2. Enhancing the Effectiveness of Firewalls and Proxies. Businesses need to understand the importance of firewalls and proxies in order to reduce security threats, especially if they are dealing with a huge base of consumer identities. Adding stronger layers of security in the overall network and all the devices could stop employees from leveraging shadow IT as they won’t be able to access susceptible website links and applications. Moreover, time-to-time updating these security firewalls and proxies could surely reduce the chances of data breach from new threats as attackers are always finding new ways to sneak into a network or bypass weak defense systems.
3. Employee Awareness Training. A typical cybersecurity awareness training covers all the aspects that educate individuals about various shadow IT threats, including- phishing, social engineering, and malware attacks. However, organizations seeking the greatest learning impact must include some awareness activities along with real-life examples. This ensures awareness is memorable and employees could quickly analyze a situation and respond sensibly. Moreover, things aren’t predictable when it comes to shadow IT as threats keep changing with time. It’s crucial for everyone leveraging the digital space to stay up-to-date regarding the latest security breach trends. Also, the attackers are now more interested in stealing sensitive data from organizations, their employees, and their customers. This way, they can eventually blackmail the organization and even can ask for a ransom. The targets of these individuals include employees, which is perhaps why organizations should think about investing in cybersecurity and shadow IT training.
4. Avoiding Privileged Accounts. The Principle of Least Privilege (also known as The Principle of Least Authority) applies to the practice of assigning minimum levels of access – or permissions to a consumer that is essential to accomplish their roles and corresponding duties. Though privileged accounts are necessary for some tasks, they should not be followed as an everyday practice. Because if a data breach happens to such accounts, the result may be drastic. An efficient way to reduce the possibility of internal and external data breaches is through role-based access control (RBAC) or the restriction of non-essential access to sensitive information. You can apply this identity and access management best practice through LoginRadius CIAM. For instance, you can offer access to a consumer for a specific timeframe (for example, 30 minutes) and then automatically revoke access. Micromanaging access in this way can improve the overall cybersecurity quotient.
5. Go Passwordless. As the name suggests, passwordless login is the method of authenticating consumers without entering a password. The benefits of going passwordless are endless— it improves overall consumer experience as consumers no longer need to memorize any credential, saves time and productivity, more robust security against attacks like phishing, credential stuffing, and brute force, and greater ease of access. This is a game-changer as it shuns any chances of unauthorized access even if an employee compromises its credentials to shadow IT or a cyberattack. Passwordless login in LoginRadius can be implemented through different approaches. A few of the common ones include:
   • Email-based login: Consumers can log in through a unique code sent to the
     associated email ID.
   • SMS-based login: Consumers can log in through a unique code sent to the
     associated phone number.
   • Biometrics-based login: Consumers can log in through biometric technologies
     like fingerprint, face, or iris scans.
   • Social login: Consumers can log in through their existing social media
     accounts like Facebook, Twitter, or Google.

Final Thoughts

Shadow IT can drastically impact a business financially and even ruin the brand image. Businesses could not even figure out the root cause for even months. It’s crucial for businesses to understand the importance of a robust defense system against the rising security threats, especially those caused by shadow IT. LoginRadius’ cutting-edge CIAM solution can help businesses overcome the challenges of shadow IT as it flawlessly shuns any chance of data breach by any means and secures consumer identities, crucial information, and organizational data through stringent layers of security. The aspects mentioned above can help businesses in improving their first line of defense. Enterprises can consider consulting LoginRadius for invoking the highest level of security that maintains a flawless user experience for consumers.