Shadow AI: The sneaky staff habit putting your business at risk

If you think cyber threats only come from dodgy hackers, it’s time for a rethink. The latest risk to Aussie businesses is coming from a lot closer to home: your own staff.

So what’s threatening businesses? It’s called Shadow AI, and it’s what happens when employees use artificial intelligence tools, like ChatGPT and other public platforms, without official approval or oversight. According to new research from HP and Microsoft, a whopping 81 per cent of employees admit they’ve shared confidential business info through these public AI tools. That’s a big yikes!

Even more worrying, one in three Aussie businesses are already using free AI tools, yet only one in ten managers reckon their teams know how to use them safely.

Don’t ignore the risk of Shadow AI

Kosala Aravinda, Chief Operations Officer at Blockstars Technology, says it’s a risk no small business can afford to ignore.

“The recent research shows that businesses really need to pivot fast towards enterprise solutions that protect them from a security and data standpoint. It’s simply risk-taking that businesses cannot afford,” he said.

The Microsoft survey found the most common uses for AI at work include replying to emails, drafting reports and presentations, and even handling finance tasks. While there is no denying it’s saving time and money, it’s also giving IT teams a serious headache.

“Security teams are burning out trying to defend against AI-powered attacks and internal misuse of AI by their own employees,” Aravinda said.

The trend behind AI adoption

So why are staff turning to these tools in the first place? Mostly it’s about convenience. People are already familiar with public AI platforms, and they’re free, but that’s exactly where the danger lies. Once sensitive company data is entered into a public AI tool, it’s out there for good.

Aravinda says it’s vital that business owners set clear rules around AI use.

“The first thing businesses can do right now is set their own AI policy on how to safeguard their company and how employees can use these online AI platforms.”

He also recommends a smarter long-term fix: bringing AI in-house.

“The key advice I would urge to any Australian business actively integrating and using AI in their operations right now is to integrate their own in-house AI agent,” he said. “This can be developed and tailored to your business, where employees can use it freely, all information can be kept securely within legal frameworks, and you can clearly set a boundary on how to use AI within your company.”

So before your staff’s AI use turns into a privacy nightmare, it might be time to shine a light on Shadow AI and set some ground rules.

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