Shadow AI: The Hidden Risks You Need to Know

AI is revolutionizing businesses, offering new tools and solutions that boost productivity. But with the rise of AI, a hidden issue has emerged: shadow AI.

This refers to the use of AI technologies without the approval or oversight of an organisation’s IT department.

It’s more common than many realise and poses significant risks to business security and compliance.

In this post, we’ll explain what shadow AI is, why its a problem, and how businesses can protect themselves.

What is Shadow AI?

Shadow AI happens when employees or external partners use AI tools outside of official IT governance. These tools, often accessed through free cloud services or open-source platforms, bypass company protocols, making them difficult to monitor or control.

For example, tools like ChatGPT are easy to adopt without going through proper channels and ensuring tools are set up correctly as to not train from your data inputs.

While these tools might seem like quick productivity boosters, they introduce serious risks, especially when that data may not be held securely.

Why Shadow AI is Risky

Shadow AI can expose your business to several serious dangers:

Data Security

Unapproved AI tools may handle sensitive data like customer details or financial records without proper protection, leaving your business vulnerable to breaches.

Cybersecurity Risks

Unvetted AI tools often lack the robust security measures of official solutions and therefore may steal and learn from the data you share with them.

How to Protect Your Business from Shadow AI

To guard against the risks of shadow AI, businesses should take these proactive steps:

Educate Employees

Train your staff on the dangers of using unauthorized AI tools and the importance of sticking to company-approved solutions.

Establish Strong IT Governance

Create clear policies outlining which AI tools are approved and encourage collaboration with IT before using new technologies.

Centralise AI Management

Ensure all AI initiatives are managed by your IT team or an external partner to ensure proper oversight and alignment with business goals.

Conclusion: Harness AI, Responsibly

AI has the power to transform your business, but only if used responsibly. By educating your employees, strengthening governance, and having a clear AI strategy, you can safely reap the benefits of AI while avoiding the dangers of shadow AI. At Solsoft, we specialise in helping organisations, including SMEs and not-for-profits, maximise the value of their IT. Contact us today to see how we can support you.