Discovering Shadow AI: Securing SaaS in the AI Era

Discovering Shadow AI: Securing SaaS in the AI Era

Understanding Shadow AI: The Hidden Risks in SaaS Security

As Software as a Service (SaaS) providers rapidly incorporate artificial intelligence (AI) into their offerings, a pressing issue has arisen: shadow AI. Shadow AI refers to the unauthorized use of AI tools within organizations, which can pose significant security risks. For instance, developers might use ChatGPT for coding assistance, sales staff may download AI-driven transcription software, and customer support representatives could utilize Agentic AI for task automation—all without proper oversight. This unauthorized use can jeopardize sensitive company data and compromise security protocols.

The Challenge of Detecting Shadow AI

Shadow AI tools present unique detection challenges that set them apart from traditional shadow IT. Unlike conventional shadow applications, which can often be identified through network monitoring, shadow AI tools frequently integrate themselves into approved business applications via AI assistants and copilots. This makes them harder to detect because they share IP addresses and domains with legitimate applications.

Moreover, employees may use standalone AI tools linked to personal accounts, such as individual ChatGPT instances. Although these tools do not connect to corporate networks, there remains a significant risk of data leaks if sensitive information is inadvertently shared.

Security Risks Associated with Shadow AI

Shadow AI applications extend the attack surface of an organization by introducing unmonitored integrations and APIs. They often operate with weak configurations—such as excessive permissions and lack of multi-factor authentication (MFA)—which makes them susceptible to exploitation. Studies indicate that around 15% of employees inadvertently share company data with AI tools, creating a risk of sensitive information exposure and misinformation.

How Reco Tackles Shadow AI Detection in SaaS

Reco, a leading SaaS security solution, employs advanced AI-based graph technology to identify and catalog shadow AI within organizations. Here’s an overview of how Reco functions:

  • Active Directory Integration: Reco connects with your Active Directory (e.g., Microsoft Azure AD or Okta) to compile a list of approved applications and AI tools.

  • Email Metadata Analysis: By analyzing email metadata from platforms like Gmail and Outlook, Reco identifies communications with unauthorized tools, filtering out internal communications and focusing on usage indicators.

  • GenAI Module Matching: Reco utilizes a proprietary model based on interaction patterns and natural language processing (NLP) to match identities with corresponding applications, creating an inventory of all SaaS and AI tools in use.

  • Shadow Application Detection: Comparing the compiled list against known applications, Reco identifies unauthorized tools and shadow AI, ensuring comprehensive visibility.

Insights Offered by Reco on Shadow AI Tools

After identifying shadow AI applications, Reco can provide critical information, including:

  • Current SaaS Applications: Insights into which SaaS applications are in use and which utilize AI assistants.

  • App-to-App Connections: Understanding inter-application interactions to manage risks effectively.

  • Identity Management: Consolidating identities across multiple applications to manage permissions and access controls.

  • Activity Tracking: Monitoring user actions across applications to identify suspicious behavior, such as unusual downloads or permission changes.

Limitations of Reco’s Shadow AI Security

While Reco offers robust detection capabilities, it operates in a read-only capacity and cannot perform certain actions:

  • Prevent Data Input: Reco cannot stop users from entering sensitive data into unauthorized AI tools.

  • Block Shadow AI Tools: The platform cannot disable shadow AI integrations since it does not interfere with application functionality.

  • Restrict User Behavior: Reco cannot enforce policies or prevent access to unauthorized tools; it only detects and alerts on such activities.

Continuous Security Management with Reco

Once Reco identifies shadow applications and AI tools, it ensures ongoing security through:

  • Posture Management and Compliance: Identifying misconfigurations and providing remediation instructions.

  • Identities and Access Governance: Centralizing identity management across SaaS applications for improved oversight and security.

  • Threat Detection and Response: Offering real-time alerts for suspicious activities and integrating with existing security workflows.

For more information about Reco and how it can enhance your organization’s SaaS security, you can watch a pre-recorded demo here or visit reco.ai to schedule a live demonstration.

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