What Is Shadow SaaS?

The Rise of SaaS Adoption in the Enterprise

Across an entire enterprise, there might be thousands of individual roles and functions that employees need to fulfill. On a large scale, individual teams like legal and sales tackle their various fields, but even within these sectors there can be a huge amount of variance. SaaS applications promise to help simplify or automate many of these individual tasks, offering employees an effective way of reducing their workloads and improving productivity.

SaaS apps are now almost essential in the business world, with individual apps helping with everything from payroll support to customer relationship management. Instead of having to build a costly and original application to help employees out, SaaS apps cut through this work and provide a finished product that employees can use from day one.

The use of these solutions isn’t necessarily a problem, with many actually serving to help businesses be more productive. However, when employees start downloading apps without first asking their security team to verify them, the cracks could start to show.

With how popular and common SaaS apps are, employees may not think twice about downloading a new one to help improve their workflows. This is especially worrying, as even known SaaS solutions have risks, with 43% of enterprises having a cybersecurity incident that traces back to SaaS misconfigurations.

If a SaaS app contains malicious software or has weak security configurations, then it could leave the door open for future attacks and breaches.

Leading Causes of Shadow SaaS

The use of shadow SaaS isn’t always malicious, as an employee may not even realize that the app they’re using isn’t approved by the company. Often, shadow SaaS arises due to miscommunication, breakdowns in transparency, and siloed decision-making between departments.

Here are some causes of shadow SaaS in modern organizations:

• Siloed Departments: When a marketing or sales team gets assigned their quarterly budget, they might choose to spend this on a specific SaaS app to help their employees out. If the department fails to communicate that they’re using a new app to the IT teams, their cybersecurity department won’t have the opportunity to check it for potential vulnerabilities.
• Browser-Based SaaS: Browser extensions are another location to find shadow SaaS, as they’re often free to download but don’t leave the same trail as apps downloaded directly onto a device. However, due to the laxer security regulations around browser extensions, this is another common place for dangerous shadow SaaS to arrive.
• Poor Verification Pathways: Once an application is verified by your security department and cataloged, it ceases to be shadow SaaS. However, if the actual process for asking your IT department to verify new apps is slow or difficult to manage, employees may just skip over this step and use an app in secret.

Supporting employees and ensuring they have ample opportunity to request new SaaS apps and solution verification will help dramatically reduce the presence of unauthorized IT in your organization.

Real-World Examples of Shadow SaaS

Shadow SaaS is an enormously broad area, because SaaS itself could provide solutions in virtually any field.

Due to this breadth, here are some examples of how shadow SaaS arises in different departments:

• Marketing Teams: Marketers connect third-party analytical tools to their tech stack, accidentally sharing company data with an unverified platform.
• HR: Recruiters use AI resume platforms to comb through applications, inadvertently exposing company data and storing applicant data in a non-compliant manner.
• Engineering: Developers download a copilot application that helps debug code, exposing their code to a third-party platform that doesn’t have effective protection systems in place.

Shadow SaaS is also especially prominent in browser solutions, which are even harder to detect and monitor when compared to locally hosted software. To detect these, security teams need to establish extensive monitoring solutions that help flag unexpected behavior both locally and on browsers.

Risks of Shadow SaaS

As with all forms of shadow IT, shadow SaaS creates a blind spot for security teams, reducing visibility and providing a potential point of entry for security threats. While shadow SaaS may not always lead to a breach, the inability to effectively apply security protections to these unknown platforms makes them a vulnerability.

Below are the main risks of shadow SaaS:

• Data Breaches: One of the worst risks of shadow SaaS is a full company data breach due to the application. Attackers may penetrate businesses through these applications, using their weaker security controls as a way to break into company accounts and begin to exfiltrate data.
• Unauthorized Access: If malicious actors gain access to a shadow SaaS app, they may be able to use an employee’s login to look at other connected apps and files in your enterprise. If you don’t have identity verification restrictions, one small, breached account could lead to lateral movement with more significant consequences.
• Lack of Visibility: As IT teams don’t know a shadow SaaS app exists in their organization, they won’t know to apply security policies and protective cybersecurity tools to the solution. Due to this, shadow SaaS limits overall visibility, also reducing the efficacy of cross-network security solutions.

Regulatory Non-Compliance: Businesses need to comply with leading compliance regulations to ensure they protect customer and sensitive data in an effective manner. If they have shadow SaaS in their company, they won’t apply the correct controls, potentially leading to non-compliance and fines.

Managing Shadow SaaS: Best Practices

Shadow SaaS isn’t a problem that organizations can tackle overnight. However, introducing policies and security controls ahead of time can begin to manage the problem holistically, reducing the impact and prominence of shadow SaaS.

These are some best practices to manage shadow SaaS:

• Implement SaaS Detection Tools: The first step toward managing shadow SaaS in an organization is actually knowing what unauthorized SaaS products are being used in your company. To do this, businesses should implement SaaS detection tools that track data flows, monitor for anomalies, and identify unauthorized software on devices and within browsers. By mapping out OAuth permissions and flagging any suspicious movements of data, your security team can begin to find out where SaaS apps may exist, allowing you to then start to either verify or remove them.
• Create Clear SaaS App Verification Pathways: If an employee feels like your process for verifying an app takes too long, they’ll skip it entirely. With that in mind, provide an accessible and fast process for suggesting new SaaS apps and having them interacted with by IT teams. The more direct this pathway is, the less likely it is that an employee bypasses the process, allowing companies to keep better tabs on what apps are being used in an organization.
• Review Existing SaaS Platforms: While SaaS apps may once have been verified, that doesn’t mean that they’ll be completely secure forever. Regularly reviewing all of the SaaS apps in an organization and ensuring they are patched to their most recent updates will help protect against any known vulnerabilities. Businesses can also check SaaS app usage and close any accounts that are no longer being used, helping to reduce their attack surface and make app management easier.
• Use Identity Control Systems: As a general rule for SaaS app management, businesses should use strict identity controls to reduce the lateral access that any breached app provides. Strict controls with single sign-on policies and multi-factor authentication will ensure that even if a cybercriminal gained access to a device, they wouldn’t be able to breach other systems. Applying extensive identity management policies across your entire organization will help protect against both known and unknown shadow SaaS applications

While not an exhaustive list, these best practices will help to radically reduce the prominence of shadow SaaS in a company while also mitigating the worst impacts if a breach were to occur. As with all cybersecurity efforts, managing shadow SaaS should be a continual, iterative effort where you work alongside your employees.

Gain Full Control Over Your SaaS Ecosystem with Check Point’s Workspace Security SaaS

If shadow SaaS products go unnoticed, they could create entry points for cyberattacks, increasing your company’s attack surface without detection. Check Point’s Workspace Security SaaS keeps your business as safe as possible, automatically detecting shadow SaaS applications with machine learning.

By pinpointing anomalous behavior, Workspace Security SaaS is able to stop potential shadow SaaS in its tracks, continually reducing risk in your organization. As an out-of-the-box solution, you can get started with Workspace Security with just a few clicks, remedying the dangerous use of unauthorized SaaS solutions and helping to fortify your security posture.

Get full control over your SaaS ecosystem and put your company’s security first by requesting a demo of Workspace Security SaaS today.