The Hidden Risks of Unmonitored IoT Devices

The Internet of Things (IoT) revolution is transforming businesses across all industries. From smart thermostats optimizing energy usage to security cameras enhancing safety, these interconnected devices promise a future of increased efficiency and productivity. However, lurking beneath the surface of convenience lies a hidden threat - IoT Shadow IT. A staggering 85% of companies worldwide have been hit by cyberattacks during 2022 to 2023, with unauthorized use of shadow IT accounting for 11% of those incidents¹. The increasing use of unauthorized software by employees is making companies more susceptible to cyberattacks. Hence, this article explores the intersection of IoT and shadow IT, highlighting the security vulnerabilities it creates and practical strategies to mitigate the risks.

Understanding IoT and Shadow IT

The IoT refers to the network of physical devices embedded with sensors, software, and internet connectivity. These devices collect and exchange data, enabling them to automate tasks and communicate with other devices. Here are some common examples of IoT devices used in businesses:

• Smart thermostats and lighting systems: Optimize energy consumption and create comfortable working environments.

• Security cameras and access control systems: Enhance physical security and monitor activity within a facility.

• Smart sensors: Track inventory levels, monitor equipment performance, and collect environmental data for predictive maintenance.

• Smart speakers and virtual assistants: Facilitate hands-free communication and control of other smart devices.

Shadow IT, on the other hand, refers to the use of information technology (IT) systems and devices outside the control of the IT department. This can include unauthorized cloud storage services, employee-owned smartphones used for work purposes, and even personal IoT devices brought into the office.

The intersection of IoT and shadow IT arises when employees, with good intentions but lacking awareness of the security risks, introduce unauthorized IoT devices into the business network. These devices, often lacking proper security configurations, become easy targets for cyberattacks, jeopardizing sensitive data and disrupting business operations.

The Risks Posed by IoT Shadow IT

The proliferation of unmanaged IoT devices poses a significant threat to businesses. Here are some key areas of concern:

• Security Vulnerabilities: Many IoT devices come pre-configured with weak passwords, lack encryption protocols, and run outdated firmware with known vulnerabilities. Hackers can exploit these weaknesses to gain access to the network, steal sensitive data, or launch distributed denial-of-service (DDoS) attacks.
• Data Privacy Concerns: Unauthorized IoT devices can collect and transmit sensitive data without proper authorization. This could include employee login credentials, customer information, or even intellectual property. Data breaches involving unmanaged IoT devices can lead to financial losses, reputational damage, and violations of data privacy regulations like GDPR.
• Network Performance Issues: Unforeseen numbers of unmonitored IoT devices can strain network resources like bandwidth and processing power. This can lead to degraded network performance, impacting critical business applications and hindering employee productivity.
• Compliance Risks: Regulatory bodies enforce stringent data privacy and security regulations. Organizations with uncontrolled IoT devices may struggle to comply with these regulations, exposing them to hefty fines and legal repercussions.

Technical Specifications and Challenges 

Securing an environment filled with diverse IoT devices presents unique challenges. Here are some key technical considerations:

• Diverse Device Ecosystem: The sheer variety of IoT devices from different manufacturers, with varying security protocols and operating systems, makes it difficult to establish a one-size-fits-all security approach.
• Authentication and Authorization: Ensuring only approved devices and users can access the network and sensitive data requires robust authentication and authorization mechanisms like multi-factor authentication and role-based access control (RBAC).
• Firmware and Software Maintenance: Keeping firmware and software on all IoT devices up-to-date with the latest security patches is crucial to address vulnerabilities discovered after deployment. However, manual updates for a vast number of devices can be a significant burden.
• Data Encryption and Privacy: Data transmitted by IoT devices needs to be encrypted to safeguard it from unauthorized access and tampering. Implementing strong encryption protocols like AES-256 ensures data confidentiality and privacy.
• Network Segmentation Difficulties: Isolating IoT devices from the main corporate network can minimize the damage if a breach occurs. However, achieving effective segmentation can require complex network configurations and additional security tools.
• Scalability Concerns: As the number of IoT devices deployed grows exponentially, the existing infrastructure needs to be scalable to accommodate the additional load and ensure optimal performance.
• Monitoring and Management: Continuous monitoring of all IoT devices for suspicious activity is crucial. Additionally, centralized management tools are needed to configure, update, and troubleshoot these devices effectively.
• Vendor and Supply Chain Security: Evaluating the security practices of IoT device vendors and their supply chains is essential. Businesses should choose vendors with a proven track record of security and rigorous quality control measures.

Learn more: The Proactive Advantage in IT Governance and Compliance Monitoring

Mitigation Strategies

Combating the threats posed by IoT Shadow IT requires a multi-pronged approach. Here are some key strategies to consider:

• Creating an IoT Policy: Developing this policy starts with defining its scope and objectives, followed by a comprehensive device inventory and risk assessment. Next comes establishing clear guidelines for device management, access control, data security, and incident response protocols. Effective communication and employee training on these policies are crucial, and the entire program should be reviewed and updated regularly to ensure continuous improvement and adaptation to the ever-evolving world of IoT technology.
  
  

• Employee Training and Awareness: Regular training sessions for employees are crucial to educate them about the risks associated with unauthorized IoT devices. Training should emphasize best practices like avoiding personal IoT devices for work purposes, using strong passwords for authorized devices, and reporting any suspicious activity to the IT department.
• Implementing Robust Security Measures: Enforce strong security protocols for authorized IoT devices. This includes requiring complex and unique passwords, enabling automatic firmware updates, and implementing data encryption at rest and in transit. Additionally, conduct regular security audits of IoT devices to identify and address potential vulnerabilities.
• Collaboration with IT Department: Encourage open communication and collaboration between business units and the IT department. Business units should involve IT in the planning and deployment of any IoT projects to ensure proper security measures are implemented from the outset.
• Vendor Management: When selecting vendors for IoT devices, prioritize those with a strong commitment to security. Evaluate the vendor's security practices, data encryption standards, and commitment to providing ongoing security patches and updates.
• Cloud Data Security Solution: Consider implementing a cloud data security solution specifically designed to protect data transmitted and stored in the cloud. These solutions offer features like data encryption, access controls, and threat detection capabilities, adding an extra layer of security for IoT data stored in cloud environments.
• Cyber Security Services: Partnering with a reputable cybersecurity services provider can offer valuable expertise in securing your IoT environment. These companies can assist with vulnerability assessments, penetration testing, and developing a comprehensive IoT security strategy.

The benefits of IoT technology are undeniable, but it is essential to be aware of the potential security risks posed by uncontrolled IoT Shadow IT. By implementing a combination of the mitigation strategies outlined above, businesses can harness the power of IoT while effectively safeguarding their data and network infrastructure. A proactive approach to IoT security is crucial in building a resilient and secure digital environment for your organization. Contact Adnovum’s team of cybersecurity experts today to assess your current shadow IT risk.

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Reference:

• Infosecurity Magazine. (2023). New Report: 85% Firms Face Cyber Incidents, 11% From Shadow IT.