--- title: "Which Shadow IT Risks Should I Be Aware of for 2026?" date: "2021-01-18T10:41:36+00:00" url: "https://faddom.com/shadow-it-risks/" description: "Shadow IT is the use of hardware, software, and cloud or AI services without IT approval, spanning its benefits, security and compliance risks, current trends including the rise of shadow AI, and best practices for gaining full visibility and control." --- # Which Shadow IT Risks Should I Be Aware of for 2026? Shadow IT is a growing problem for enterprises of all sizes. Let’s look at what you need to know. The conversation around Shadow IT has also shifted as employees adopt cloud and AI tools faster than IT can review them. A new wave of unsanctioned artificial intelligence use has emerged as one of the fastest-growing sources of hidden risk, reshaping how organizations think about visibility, governance, and data protection. Table of contents1. [What is the Meaning of Shadow IT?](#what-is-the-meaning-of-shadow-it) 2. [The Shadow IT Examples that are Beneficial to Your Company](#the-shadow-it-examples-that-are-beneficial-to-your-company) 3. [The Rise of Shadow AI](#the-rise-of-shadow-ai) 4. [Shadow IT Trends to Watch, to Avoid Shadow IT Risks ](#shadow-it-trends-to-watch-to-avoid-shadow-it-risks) 5. [Make Visibility Company-Wide, Even in the Shadows](#make-visibility-company-wide-even-in-the-shadows) **Editor’s note:** Updated the article to add recent market research, a new section on the rise of shadow AI, and refreshed statistics and trends as of 2026. ## What is the Meaning of Shadow IT? Gartner defines Shadow IT as meaning “IT devices, software and services outside the ownership or control of IT organizations.” Shadow IT can be hardware or software, and in particular, it has risen exponentially in recent years alongside the growth of cloud computing. It has become usual for employees to download new software solutions and cloud products to assist them with their day to day work, and this has led to a huge increase in Shadow IT, where systems, software and processes are running inside the network, and IT has no idea. (For more information, see our [Guide to Business Continuity Plans](https://staging-faddomnew-staging.kinsta.cloud/business-continuity-plan/).) ***This is part of a series of articles about [Network Security-FM](https://faddom.com/network-security-in-2025-threats-security-models-and-technologies/)*** ## The Shadow IT Examples that are *Beneficial* to Your Company While this may sound like a negative trend, and of course, the reality of Shadow IT has to be managed carefully and with security in mind. However, there are actually quite a few benefits to Shadow IT, meaning that it isn’t something to be simply stamped out, or nipped in the bud. Between [30%-40% of IT spending is going on Shadow IT.](https://www.cio.com/article/3188726/how-to-eliminate-enterprise-shadow-it.html) Like it or not, your employees are using their own solutions, and they’re seeing its success, in real-time. Companies can’t wait for lengthy procurement processes, bureaucratic buy-in, and hierarchical approvals. Teams are being pushed to transform faster, with more agility, and without creating bottlenecks that allow the competition to grab the lead. In that case, Shadow IT is a must, allowing employees to hit the ground running and step out of the cumbersome sales cycles that so often hold enterprises back. *So, here’s the real question. If Shadow IT can be beneficial, why do the C-suite have to worry? What are the risks of Shadow IT?* Simply put, it’s about knowing what’s happening within your own four walls. [Cisco estimates ](https://www.cio.com/article/2968281/cios-vastly-underestimate-extent-of-shadow-it.html)that while IT managers think they have an average of 51 solutions running on their cloud, the real number is an astonishing 730! As employees become more tech savvy, solutions become easier to onboard, and companies experience a lack of developers or time to build in-house, this problem is only going to grow. Moving from unknown Shadow IT risks, to *managed* Shadow IT is essential. That gap is widening with AI: research finds that the majority of organizations now have AI coding assistants and browser-based AI extensions in their environments, with much of that adoption happening from the bottom up rather than through centrally managed programs. ## The Rise of Shadow AI The newest and fastest-growing form of Shadow IT is shadow AI, the use of generative and agentic AI tools without IT approval or security oversight. Because these tools do not just store data but actively process, generate, and sometimes retain it, many security teams now treat shadow AI as a distinct risk category rather than a subset of Shadow IT. The scale of the problem has grown sharply. According to recent industry research, the share of breached organizations affected by shadow AI more than doubled in a single year, rising from one in five to well over two in five, while breaches linked to shadow AI added hundreds of thousands of dollars to the average incident cost. Governance has struggled to keep pace. Industry findings show that more than two-thirds of breached organizations still lack processes to manage shadow AI, and the share with any AI policy in place has actually declined. The practical takeaway mirrors classic Shadow IT advice: provide sanctioned, well-supported alternatives, set clear usage policies, and gain full visibility into what tools are actually running. ## Shadow IT Trends to Watch, to Avoid Shadow IT Risks So how can you keep the benefits of Shadow IT solutions including productivity and employee morale and empowerment, without opening your company up to risks such as breaking compliance laws, threatening the privacy of company data, disrupting business continuity, or widening the likelihood of a security incident? Here are a few top tips, in line with today’s Shadow IT trends. **Spread the Word About Shadow IT:**[ The main reason](https://www.entrust.com/digital-security/c/shadow-it?utm_source=BusinessWire&utm_medium=social-post&utm_campaign=1910-ShadowITBusinessWire&edc_sfid=7011O000002T8zE) why employees don’t feel comfortable talking about Shadow IT is that they don’t want to get their colleagues into trouble. Shadow IT might be the worst kept secret at your company, but no one is willing to bring it into the light. Be honest and open about Shadow IT as an issue that you’re looking to manage. Let your staff know that you aren’t looking to ban their use of Shadow IT, you just want to manage the situation better. Share best practices widely, as education is your strongest first line of defense. ***Top tip:*** *Offer your employees a one-off ‘come clean, no consequences’ strategy for Shadow IT. If they find that they have got into trouble by onboarding a new technology, application, or device – they can bring it to IT, explain what’s going on, and they don’t have to worry about the penalties of speaking up.* **Put Some Shadow IT Policies in Place:** 17% of employees say that company leaders evade or ignore technology policies, so the problem is likely starting at the top. Have a meeting about Shadow IT solutions in your business, and discuss what you want to do about it. Do you have a policy in place for using private devices for work-related activity, for example? How about home computers, especially during this WFH period we find ourselves in during COVID-19? Do managers themselves indulge in Shadow IT examples via their favorite software solutions, without even realizing it’s a problem? Policies should now explicitly cover AI tools, since research shows nearly half of generative AI users access these tools through personal, unmanaged accounts that bypass enterprise controls entirely. **Change the Way that You Approach Shadow IT Examples:** Bringing Shadow IT into the open means creating processes for Shadow IT that aren’t prohibited, but are seen as a valuable part of your business. This could be anything from creating an approval and vetting process that employees need to go through to get Shadow IT solutions on the ‘allow’ list, all the way to onboarding low-code/no-code platforms that can be pre-approved, and give employees more freedom to find the solutions that they need. Examples include [Claim Technology](https://claimtechnology.co.uk/) in the Insurance sector, and [Mambu ](https://www.mambu.com/?utm_term=mambu&utm_campaign=01.00_Search_Brand&utm_source=adwords&utm_medium=ppc&hsa_acc=9105258888&hsa_cam=9899443381&hsa_grp=103446525794&hsa_ad=432179236536&hsa_src=g&hsa_tgt=kwd-370861402443&hsa_kw=mambu&hsa_mt=e&hsa_net=adwords&hsa_ver=3&gclid=CjwKCAiAtej9BRAvEiwA0UAWXmpbekPxjci5pGws2gUA7Eu191uXBtiWcLtal83daexKnuQj3P1xJhoCRLsQAvD_BwE)in Banking and Finance. **Layer [Cybersecurity](https://faddom.com/top-10-cybersecurity-frameworks-to-know-in-2025/) Across the Business:** You can lower the risks of Shadow IT through your own internal security processes, by segmenting user access, ring fencing critical data, or protecting at the network level. Whatever you choose to do, you can only fully protect your organization if you understand the extent of the problem, and can factor this into any cybersecurity proposal, through full visibility at the start. ***Related content: Read our guide to [network security threats](https://faddom.com/top-10-network-security-threats-in-2026-and-how-to-mitigate-them/)*** ## Make Visibility Company-Wide, Even in the Shadows With Faddom’s [application dependency mapping](https://faddom.com/application-dependency-mapping/), organizations can see across their entire IT ecosystem, including all hardware, software, and cloud systems that are communicating with your data center. This means you have one clear view into all virtual and physical servers, with accurate traffic analysis that is updated in near real-time. This kind of visibility matters more than ever as AI-enabled tools and agents spread rapidly across the enterprise, often adopted by individual teams before IT is aware of them. No need to rely on staff reporting on one another’s Shadow IT usage, you can keep an up to date list of all devices, applications and software that’s being used, and see the benefits and risks in real time. Use this map to educate your staff better, to set up smart usage or access policies, or to put into place intelligent segmentation rules to keep critical assets away from harm. Best of all, you can download this tool for free – [right here](https://staging-faddomnew-staging.kinsta.cloud/free-trial/).