Shadow data is any data not actively monitored and managed by an organization’s IT or security team. This data often includes that which has been copied, backed up, or stored in ways not aligned with an organization’s security protocols.

This type of data has become common in recent years, with the ease at which users can copy and store information. For example, an employee can copy a sensitive document to a personal cloud storage account like Google Drive, Dropbox, or OneDrive in mere seconds. Since the personal account may not be as secure as a corporate account, there is a risk that the data might be exposed.

Read More about Shadow Data

We’ll dive deeper into this type of data below.

How Is Shadow Data Related to Shadow IT?

Shadow IT and shadow data are closely related. Shadow IT emerges when employees use software or hardware without the IT department’s approval or knowledge. When employees use unauthorized tools, they often create and store data outside the organization’s controlled environment. This data becomes shadow data.

While shadow IT is one of the causes of unmanaged data, other factors lead to the creation of such data.

What Causes the Emergence of Shadow Data ?

The main factors contributing to the rise in unmanaged data are technological advancements, user behaviors, and organizational factors. We’ll talk about these in greater detail below.

Causes of shadow data

Technological Advancements

The sheer volume of data we create and store has exploded. The Internet of Things (IoT) and devices like smartphones, smart home gadgets, and countless online services generate massive amounts of data every day. This rapid growth makes it difficult for organizations to track and secure all the data they handle.

Additionally, the rise of cloud computing has made it easier for individuals to store and share data without IT oversight. Cloud services like Google Drive and Dropbox allow people to quickly copy and save documents, often outside their organizations’ control. This behavior can lead to the creation of shadow data.

User Behaviors

Employees often use personal devices to access and store company data. While convenient, it bypasses an organization’s security measures. The data may be stored on these devices without proper encryption or backup measures, making them vulnerable to loss or theft.

Also, employees are increasingly using shadow IT or unauthorized software or apps for work, leading to data silos and shadow data since the data may be stored in formats that are incompatible with an organization’s systems.

Organizational Factors

Organizations often have legacy or outdated systems that they no longer actively maintain. If these systems are not decommissioned correctly, the data they hold can become unmanaged shadow data, vulnerable to unauthorized access or loss.

Incomplete or improper data migration and backup processes can also lead to unmanaged data. When data is migrated or backed up, it’s crucial to ensure that all the data is accounted for and securely stored. If data is accidentally left behind or stored in unsecured locations, it can become shadow data.

Finally, poor data governance practices can contribute to the rise in unmanaged data. Organizations need to have clear data classification, retention policies, and access controls in place to manage data effectively. These measures are necessary to store data in various locations with proper oversight.

What Are the Risks Associated with Shadow Data ?

Since any data that is not being monitored cannot be properly secured, shadow data is associated with several cyber risks. In fact, IBM says that 35% of data breaches in 2024 had to do with this type of data.

Organizations could face hefty fines and legal repercussions if sensitive data is not properly protected. Therefore, unmanaged data can lead to noncompliance with data privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

A breach involving this type of data can severely damage an organization’s reputation, which leads to loss of customer trust and business opportunities.

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Shadow data poses a significant threat to organizations of all sizes. This hidden data can lead to serious security risks, compliance violations, and reputational damage.

Organizations should implement strong data governance, conduct regular audits, and invest in data discovery tools to combat this type of data. Educating employees on data security best practices is also crucial to prevent its creation.

Key Takeaways

  • Shadow data is unmanaged data outside an organization’s official systems and not subject to its security and governance policies.
  • It usually stems from user behaviors, technological advancements, and organizational factors, such as poor data migration and lack of data governance.
  • Data breaches, compliance violations, and reputational damage are among the risks it poses.

Sources

  • https://www.rubrik.com/blog/technology/22/11/how-to-combat-shadow-data-the-data-security-risk-lurking-in-the-shadows
  • https://www.imperva.com/blog/three-keys-to-securing-shadow-data/
  • https://cloudsecurityalliance.org/blog/2023/01/10/hunting-shadow-data-a-guide-for-security-and-compliance-teams