When Efficiency Outpaces Security: The SaaS Dilemma

Organizations across industries are undergoing rapid transformations fueled by the rise of SaaS (Software as a Service) and the swift integration of artificial intelligence (AI) tools. On the surface, these innovations support efficiency, drive productivity, and enable a competitive edge. But beneath this wave of innovation lies a growing risk—one that many organizations are struggling to manage: shadow IT and its not-so-distant cousin, shadow AI. The allure of quick, streamlined access to new technology makes it easy for employees to sign up for SaaS apps and circumvent traditional procurement channels. As a result, IT teams are in the dark about which tools are in use and what risks they introduce.?

The Quiet Erosion of IT Control?

Once, IT departments held firm control over the software landscape. Every new tool was carefully vetted to ensure security standards were met. However, those days are fading fast. The surge in SaaS adoption has given employees more autonomy over the tools they use, and with a simple email address, a (fingers crossed) decent password, and a few clicks, entire applications are being deployed without any oversight.?

This shift has fundamentally changed how organizations manage risk. Shadow IT—the use of unsanctioned apps by employees—leaves companies vulnerable to threats that go undetected by traditional security measures. Without visibility, the potential for security incidents grows as more and more tools escape the purview of IT departments and InfoSec teams.?

More Apps, More Identities, More Problems?

Every new SaaS application brings with it added complexity—more identities, more logins, and ultimately more targets for attackers. In organizations where access to data and systems is tightly controlled, shadow SaaS represents potential vulnerabilities. Every user account is a doorway, and cybercriminals are constantly looking to exploit even the smallest weaknesses.?

High-profile breaches demonstrate how costly these vulnerabilities can be. Once bad actors gain access to a single account, they can pivot deeper into the organization, exfiltrating sensitive data or gaining access to critical resources. The very tools designed to drive the business forward can inadvertently open the door to devastating security incidents.?

The Expanding Attack Surface?

The unchecked growth of SaaS adoption presents a paradox for organizations. On one hand, it’s hard to deny the productivity gains and innovation these tools provide. On the other, every new application deployed without IT’s knowledge creates a blind spot. This expanding attack surface is not just a technical issue—it’s a business risk. When security teams don’t know what tools are being used, they cannot effectively secure them.?

This loss of control can lead to significant consequences—regulatory violations, compliance gaps, and costly breaches can all stem from shadow IT. The problem isn’t just about technology; it’s about the pace at which the technology is adopted and the widening gap between innovation and governance.?

Popular SaaS Tools and Their Hidden Risks?

Many of the SaaS tools organizations rely on process and store sensitive data, creating an attractive target for cybercriminals if left unprotected. Here’s a look at some of the most common SaaS applications across industries and their potential risks.?

Customer Relationship Management (CRM) Systems?

Examples: Aces, Homebot, Boomtown, Big Purple Dot, Salesforce???

Purpose: CRMs store vast amounts of sensitive customer data, from contact information to transaction history. These platforms help agents manage their lead lists and customer interactions efficiently, but they also represent a significant risk. If not properly secured, they can expose critical customer information should unauthorized access occur.?

Sales Automation Tools?

Examples: HubSpot Sales Hub, Zendesk Sell, Pipedrive???

Purpose: Automating follow-up processes saves time, but when these tools are adopted without proper oversight, they create a gap in visibility for IT teams. Without knowing who has access or how these tools are configured, organizations are at risk of a breach via compromised user accounts or unvetted integrations.?

Marketing Automation Platforms?

Examples: Constant Contact, Mailchimp, Marketo???

Purpose: Marketing teams use these platforms to run email campaigns and engage customers. They handle customer data en masse, making them a prime target if compromised. Though many of these tools may undergo security evaluations, risky OAuth scopes granted by employees can act as a gateway for unauthorized access.??

Lead Management Software?

Examples: LendingTree, Zillow Premier Agent, OptifiNow???

Purpose: Designed to track and nurture potential clients, these applications help streamline sales efforts. However, when employees adopt these tools independently, customer data can be uploaded and shared with third-party platforms, often without the proper data protection protocols in place.?

Document Management Systems?

Examples: DocuSign Rooms for Mortgage, Ellie Mae Encompass???

Purpose: Handling sensitive client documents is at the core of many organizations, especially financial services. These tools store and organize critical documents, but without centralized control, sensitive documents may be exposed to unauthorized access, especially if the data is not encrypted.?

E-signature Platforms?

Examples: DocuSign, Adobe Sign, HelloSign???

Purpose: E-signature platforms facilitate remote document signing, which is crucial for today’s fast-paced, digital-first operations. However, without visibility into all the platforms employees use, IT departments can miss critical vulnerabilities—such as weak authentication practices —that can lead to unauthorized access.?

Compliance Management Tools?

Examples: ComplianceEase, QuestSoft, Compliance 360???

Purpose: Compliance is non-negotiable in many industries. These tools help track regulatory requirements, but shadow IT bypasses compliance monitoring, allowing non-compliant processes or applications to slip through unnoticed.?

Analytics and Reporting Tools?

Examples: Tableau, Power BI, Domo???

Purpose: Analytics platforms are invaluable for reviewing sales performance and understanding customer behavior. However, data from multiple sources may be combined in ways that could inadvertently expose sensitive information, particularly if employees use unsanctioned analytics tools that don’t meet organizational security standards.?

Mobile Apps for Field Agents?

Examples: Mortgage Coach, Jungo Mobile, AgentMobile???

Purpose: These tools offer on-the-go access to client information, enabling agents to stay productive from anywhere. But mobile apps increase the risk of data exposure, especially if security measures like device encryption or multi-factor authentication aren’t enforced uniformly across all applications.?

Communication Platforms?

Examples: PhoneBurner (VoIP), Zoom, RingCentral, Slack???

Purpose: Communication platforms have become the backbone of client interactions, from video calls to internal collaboration. However, if employees use unsanctioned communication tools or the tool has AI note taking features enabled, sensitive discussions or data can be inadvertently shared, violating company policies and industry regulations.?

Navigating Regulatory Compliance in a Shadow IT Landscape?

In industries subject to regulatory standards, staying compliant with regulations becomes increasingly difficult with shadow IT. When unsanctioned tools don’t meet security requirements, organizations risk non-compliance, which can lead to fines, reputational damage, and operational disruption. Here’s a look at a few of the regulations and the risks that shadow IT introduces.?

Sarbanes-Oxley Act (SOX)???

SOX mandates the secure management of electronic financial records, focusing on access controls, monitoring, and auditing. Organizations must ensure that sensitive data is protected through robust controls like multi-factor authentication (MFA) and single sign-on (SSO). However, shadow IT bypasses these security measures, making it harder to track and protect sensitive financial information.?

Gramm-Leach-Bliley Act (GLBA)???

GLBA regulates how financial institutions handle customers' personal financial information. A requirement under the Safeguards Rule mandates that covered companies assess the risks to customer information and the effectiveness of the existing security controls—which is impossible to do with shadow IT.???

Payment Card Industry Data Security Standard (PCI DSS)???

PCI DSS applies to organizations that process or store cardholder data, requiring strict access controls and monitoring of employee activity. Shadow IT complicates compliance, making it difficult to track who has access to sensitive data and whether proper security protocols are being followed.?

NYDFS Cybersecurity Regulation (23 NYCRR 500)??

This New York regulation mandates stringent cybersecurity measures for companies under NYDFS jurisdiction. It requires the protection of nonpublic information, including MFA on systems accessing sensitive data, but without control over which SaaS applications are being used, companies struggle to meet these cybersecurity standards. One of the significant challenges that companies have faced in complying with 23 NYCRR 500 is their tendency to prioritize traditional Software as a Service (SaaS) solutions while neglecting the critical issue of shadow IT.?

In this regulatory environment, shadow IT isn’t just a security problem—it’s a compliance risk that could result in severe financial and reputational damage if not addressed.??

Overcoming Shadow IT Risks: A Modern Approach?

The challenges of shadow IT and SaaS security are daunting, but they’re not insurmountable. Operating in a SaaS-driven world requires a modern, proactive approach to containing the risks; enter SaaS Identity Risk Management (SIRM).?

Designed for today’s SaaS landscape, SIRM uses identity as a means to detect and secure both managed and unmanaged SaaS applications. By focusing on user identities and their access to various tools, SIRM enables organizations to regain visibility, mitigate risks, and ensure compliance.?

Key SIRM outcomes include:?

Implementing Robust Access and Identity Controls???

At the heart of SIRM is the ability to enforce strong access control mechanisms, such as Multi-Factor Authentication (MFA) and Single Sign-On (SSO) to securely manage user access to SaaS applications. Beyond initial access, SIRM also manages the entire lifecycle of user identities—from onboarding to offboarding, ensuring that no unnecessary access persists.?

Mitigating Risks from Shadow IT???

One of the biggest challenges SIRM addresses is the proliferation of shadow IT. By detecting and securing unauthorized SaaS applications, SIRM eliminates the blind spots that increase the organization’s vulnerability to security breaches. Even for unapproved but tolerated apps, SIRM provides oversight to ensure that security standards are still met.?

Ensuring Regulatory Compliance???

When an organization gains visibility into all the SaaS applications in use, by whom, and how they are being accessed, the risk of non-compliance is minimized. SIRM helps align SaaS usage with the regulatory mandates of SOX, GLBA, PCI DSS, and NYDFS.???

Improving Visibility and Control?

SIRM delivers one of the most critical capabilities organizations need: visibility.? With comprehensive insight into SaaS application usage across the organization, security teams can understand who is using what tools, when, and how. This level of transparency allows for constant risk monitoring and swift intervention if unauthorized access or risky behavior is detected.?

Adapting to the Evolving Threat Landscape???

An organization’s SaaS ecosystem is constantly changing, and so are the threats targeting it. SIRM ensures that organizations can quickly address new security risks, such as those introduced by generative AI tools or other emerging technologies.??

Enhancing Operational Efficiency?

Security should never come at the cost of productivity, and vice versa. SIRM streamlines risk and access management processes, reducing administrative overhead and freeing up IT teams to focus on more strategic initiatives. By automating key tasks like password rotation and account deprovisioning, SIRM enhances operational efficiency while maintaining SaaS security standards.?

Improving your SaaS Security?

Customers expect personalized and secure services, and organizations rely on SaaS applications to deliver them. However, shadow IT and shadow AI threaten all that organizations seek to protect. With a programmatic approach like SaaS Identity Risk Management, you can regain control, reduce risk, and ensure that your SaaS ecosystems are secure, transforming shadow IT into managed IT.??

See the shadow SaaS and dangling account access that exists in your organization. Book a free shadow SaaS assessment now and take proactive steps toward securing your SaaS environment!?

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?This article was originally published on Grip.Security