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June 12, 2024
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 min read

Shadow IT and its Nemesis: DLP

Definition, Risks, and Solutions of Shadow IT

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Shadow IT and its Nemesis: DLP
Calendar Icon White
June 12, 2024
Clock Icon
 min read

Shadow IT and its Nemesis: DLP

Definition, Risks, and Solutions of Shadow IT



  • Shadow IT refers to unauthorized IT activities within organizations, posing security risks and compliance issues.
  • Real-world examples show how Shadow IT can lead to data breaches and regulatory violations.
  • Violates standards like HIPAA, SOC 2, and PCI DSS by compromising data security and privacy.
  • Data Loss Prevention (DLP) solutions, like those offered by Strac, help mitigate Shadow IT risks.
  • Strac's DLP solutions provide comprehensive data monitoring, policy enforcement, incident response, and compliance support to address Shadow IT challenges.

In today's rapidly evolving technological landscape, the term "Shadow IT" has become increasingly significant. Shadow IT refers to the use of information technology systems, software, devices, applications, and services without explicit organizational approval. This phenomenon presents both opportunities and risks, necessitating a comprehensive understanding and strategic management approach. In fact, according to the IBM Security® Randori® State of Attack Surface Management 2022 report, “nearly 7 in 10 organizations have been compromised by shadow IT from 2021 to 2022”.We'll delve into the definition of Shadow IT, explore real-world examples, discuss its implications for standards like HIPAA, SOC 2, and PCI, and examine how Data Loss Prevention (DLP) solutions, particularly those offered by Strac, can help mitigate these risks.

What is Shadow IT?

Shadow IT encompasses any IT-related activities and systems deployed within organizations without the knowledge or consent of the IT department. Employees often engage in Shadow IT to improve efficiency and productivity by leveraging tools they find more user-friendly or effective than the sanctioned alternatives. However, this practice can lead to significant security vulnerabilities and compliance issues.

Key Characteristics of Shadow IT

  • Unapproved Usage: Employees using software, hardware, or services without IT department approval.
  • Data Management Issues: Potential for data leakage, unauthorized access, and non-compliance with regulatory standards.
  • Security Risks: Increased risk of cyber threats and breaches due to lack of oversight and security measures.

Real-World Examples of Shadow IT

Case Study 1: Sony Pictures Entertainment

In 2014, Sony Pictures Entertainment faced a massive cyberattack, which was exacerbated by Shadow IT practices. Employees used unapproved software and devices to store and share sensitive information, leading to significant data breaches and financial losses. This incident highlighted the need for strict controls over IT resources and compliance with security standards.

Case Study 2:  Healthcare

In many healthcare organizations, employees have turned to collaboration tools like Slack for communication and coordination, often without IT department approval. While these tools enhance productivity, they also pose risks of non-compliance with healthcare regulations such as HIPAA. Unauthorized sharing of patient information on these platforms can lead to severe legal and financial repercussions.  That is why we recommend solutions like Slack DLP.

In April of 2024, Kaiser Permanente confirmed that third party vendors, such as those of Twitter, Google and Bing, collected and transmitted patient information for over 13,000,000 users. Change Healthcare experienced a significant ransomware attack where the perpetrators stole 4TB of critical data and ransomed it for $22 million USD.. A DLP solution, such as the one Strac provides could’ve helped to prevent these breaches.

Case Study 3: Dropbox in Financial Services

Financial institutions have strict regulations regarding data security and privacy. However, employees in some banks and financial services companies have been known to use personal Dropbox accounts to store and share work-related files. This practice can violate compliance requirements such as SOC 2 and PCI DSS, exposing the organization to data breaches and regulatory penalties. Strac offers a Dropbox DLP just for this case.

How Shadow IT Violates Standards

HIPAA (Health Insurance Portability and Accountability Act)

HIPAA mandates strict controls over the handling of Protected Health Information (PHI). Shadow IT can lead to unauthorized access and sharing of PHI, violating HIPAA requirements. For example, using unapproved cloud storage or communication tools to share patient information can result in significant breaches and penalties.

SOC 2 (Service Organization Control 2)

SOC 2 compliance focuses on the management of customer data based on five "trust service principles"—security, availability, processing integrity, confidentiality, and privacy. Shadow IT can undermine these principles by creating security gaps and uncontrolled data flows, making it challenging to ensure the integrity and confidentiality of customer data.

PCI DSS (Payment Card Industry Data Security Standard)

PCI DSS requires organizations that handle payment card information to maintain a secure environment. Shadow IT can lead to the use of unapproved systems that lack necessary security controls, increasing the risk of data breaches and non-compliance with PCI DSS requirements.

How Data Loss Prevention (DLP) Can Help

Data Loss Prevention (DLP) solutions play a critical role in mitigating the risks associated with Shadow IT. DLP tools monitor and control data flows within an organization, ensuring that sensitive information is not exposed to unauthorized users or systems.

Key Functions of DLP Solutions

  • Data Monitoring: Continuously track data movement across networks, endpoints, and cloud services.
  • Incident Response: Detect and respond to data breaches and security incidents in real-time.
  • Compliance Management: Ensure adherence to regulatory standards by monitoring data handling practices.

Strac's DLP Solutions

Strac offers advanced DLP solutions designed to address the challenges posed by Shadow IT. Their comprehensive approach includes the following features:

Comprehensive Data Monitoring

Strac's DLP tools provide continuous monitoring of data flows across all IT environments, including networks, endpoints, and cloud services. This helps identify and mitigate unauthorized data usage and sharing associated with Shadow IT practices.

Robust Policy Enforcement

Strac's solutions allow organizations to define and enforce robust data security policies. By setting specific rules and protocols for data handling, organizations can ensure that all employees adhere to approved IT practices, reducing the risk of Shadow IT.

Real-Time Incident Response

Strac's DLP tools are equipped with real-time incident detection and response capabilities. This ensures that any unauthorized data access or breaches are promptly identified and addressed, minimizing potential damage and compliance violations.

Regulatory Compliance Support

Strac's DLP solutions are designed to help organizations maintain compliance with critical regulatory standards such as HIPAA, SOC 2, and PCI DSS. By monitoring data handling practices and enforcing compliance policies, Strac helps organizations avoid the risks associated with Shadow IT.

Data Encryption and Access Control

Strac provides advanced encryption and access control features to protect sensitive data. By ensuring that only authorized users have access to critical information. Strac's DLP solutions help prevent data breaches and unauthorized sharing.

Shadow IT - Google Drive DLP‎

User Activity Monitoring

Strac's DLP tools include comprehensive user activity monitoring, allowing organizations to track and analyze employee actions related to data handling. This helps identify potential Shadow IT practices and address them proactively.

Shadow IT & DLP:

Shadow IT presents significant challenges for organizations, including security vulnerabilities and compliance risks. However, by understanding the nature of Shadow IT and implementing robust Data Loss Prevention solutions, organizations can mitigate these risks effectively. Strac's advanced DLP solutions offer comprehensive monitoring, policy enforcement, incident response, and compliance support, helping organizations navigate the complexities of Shadow IT and maintain a secure and compliant IT environment.

By leveraging these solutions, organizations can not only protect their sensitive data but also ensure that their IT practices align with regulatory standards, ultimately fostering a more secure and efficient technological landscape.

What Does Strac Additionally Do:

  • Unmatched Detection: Strac boasts advanced technology that recognizes a wide range of confidential data, including PII (Personally Identifiable Information), PHI (Protected Health Information), and PCI (Payment Card Industry) details. It even tackles compliance regulations like PCI, SOC 2, HIPAA, and GDPR, ensuring your data handling is top-notch (for a detailed list of supported regulations, visit Strac Integrations:
  • Effortless Integration: Setting up Strac is a breeze, taking less than 10 minutes. This allows you to quickly leverage its Data Loss Prevention (DLP) features, including real-time scanning and redaction across popular cloud applications.
  • Sharp Accuracy: Strac leverages machine learning models to precisely detect sensitive information. This translates to minimal errors, ensuring only the intended data is redacted.
  • Works Everywhere: Strac seamlessly integrates with a vast array of SaaS and cloud services, providing extensive protection. It even offers endpoint data redaction solutions for added security (learn more about Strac Endpoint DLP:
  • AI on Lock: Strac safeguards sensitive data within AI environments by integrating with prominent platforms like ChatGPT and Bard. (Further details are available in the Strac Developer Documentation:
  • Developer Friendly: Strac empowers developers with robust APIs that enable them to programmatically identify and redact sensitive data (access the API documentation here:
  • Seamless User Experience: Strac redacts sensitive content within attachments without compromising user experience.
  • Customization is Key: Strac offers pre-built compliance templates alongside customizable options, allowing you to tailor your data protection strategy to your specific needs.
  • Customer Satisfaction: Many users have found success with Strac's solutions, as evidenced by positive reviews on G2.

G2 - Strac Shadow IT

By implementing Strac, you can gain visibility and control over shadow IT, ensuring your sensitive data remains protected regardless of where it resides.

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