The hidden risks of SaaS in 2026

Originally published January 2021 | Updated May 2026 

TL;DR on the hidden risks of SaaS

Traditional SaaS security has focused too narrowly on visibility, but the real risks are much deeper. The core problem has evolved beyond discovery into permissions, data flows, integrations, and AI-driven behavior.

• Employees routinely use Shadow IT apps without approval
• 55% of all apps used by employees are Shadow IT
• Nearly 60% of IT professionals cite Shadow IT as a top security concern for 2025
• Employees are granting broad permissions, sharing files with excessive access, and feeding sensitive data into unsanctioned tools
• 25% of files have up to 35 permissions per file
• 56% of organizations report employees still upload sensitive corporate data to unapproved apps
• Shadow AI usage is growing, with around 15% of employees using unsanctioned AI tools on corporate devices

For years, the hidden risks of SaaS were treated like a visibility problem. There were too many apps, not enough oversight, and Shadow IT everywhere. In 2026, the real problem is more than just the apps you don’t know about. It’s the access to them that you don’t control and lack of visibility into the actions happening within them. 

Furthermore, employees aren’t just adopting SaaS tools. They’re:

• Connecting them 
• Granting persistent permissions
• Creating or sharing files with public links   
• Feeding those apps data that could be sensitive or proprietary
• Allowing those very same tools to act autonomously 

And most of it looks completely legitimate.

That’s the uncomfortable truth behind modern SaaS security risks: nothing appears broken until you discover the hard way that it is.

There’s more SaaS (and AI) risk than you think

If you’re still clinging to visibility as the main problem in SaaS management, let’s consider some important findings from recent research.

Taken together, what do all the data points indicate? If your SaaS management strategy still revolves around only discovering apps, you’re solving yesterday’s problem. The hidden risks of SaaS today live in identity, integrations, permissions, and AI-driven behavior.

SaaS sprawl: just the start of the hidden risks of SaaS

SaaS sprawl is still real. And yes, most organizations still underestimate how many applications employees use. But it’s time to focus less on app count because SaaS environments are no longer stacks, they’re dynamic ecosystems of users, apps, and data.

In this maze, there’s:

• Apps connected to apps 
• Workflows spanning multiple systems 
• Data moving continuously across boundaries 

Every integration expands what’s possible, as well as what can go wrong. As recent SaaS breaches have shown over and over, this is where SaaS security risks take shape, and it’s not in individual tools, but in the relationships between them.

You can have perfect visibility into your SaaS stack and still be exposed. Because visibility tells you what exists.

It doesn’t tell you:

• Who has access 
• What permissions they hold 
• What actions are happening across systems 

And that’s where the real risk lives.

Identity risk is the root of all SaaS security risks

Today, most organizations use hundreds of SaaS applications, each introducing its own identity layer, access model, and integration surface. At the same time, security research consistently shows that stolen or compromised credentials are involved in roughly 80% of breaches, making identity the dominant entry point for attackers.

The bottom line is that attackers don’t break in anymore because they just log in, just like you do to your corporate productivity workspace.

That single shift explains why identity risk is now the center of the hidden risks of SaaS.

Stolen credentials. OAuth abuse. Session hijacking. None of these take advantage of any software vulnerability. Instead, they exploit something much simpler that every organization abundantly has, which is valid access. 

As time goes on, user roles change, temporary access becomes permanent, and users accumulate permissions. On the IT side, service accounts and tokens get created and forgotten. The end result is: 

• Too many users amass too much access 
• IT can’t see the full picture 
• There’s no least privilege access enforcement at scale 

This is what modern SaaS security risks look like. Of course, phishing, stolen credentials, and account takeovers are still methods rogue actors use. But in 2026, attackers are more likely to exploit valid access permissions from a pileup of overprivileged and inactive licenses, as well as non-human service accounts. 

For IT and security teams, the biggest danger is that too many can get into your IT infrastructure by simply logging in.

Offboarding failures: where identity risk heightens

Let’s talk about offboarding. When an employee leaves, the primary account gets disabled and IT assumes that the risk is eliminated. The problems are that access lingers in:

• SaaS apps with direct logins 
• OAuth integrations that happened months or years ago 
• API tokens still running

Unfortunately, this is both one of the most common SaaS security risks, and one of the most ignored.

Why? Because cross-app offboarding is a long and painful inconvenience to fix. To boil it down, manual offboarding just doesn’t scale. It misses steps and it’s easy to delay for what seems like a current urgent priority. 

And in a SaaS environment, that delay is exposure risk. It’s a vulnerability, making immediate, automated offboarding more than a convenience. Instead, it’s a basic requirement for reducing security risks.

The bottom line: without automating offboarding, you’re not managing access. Instead, you’re hoping no one ever finds it.

Shadow IT is now Shadow AI and it moves faster than governance

Shadow IT used to be about unapproved tools. But now? It’s about ungoverned apps with intelligence.

According to McKinsey research published in late 2025, employee use of GenAI tools went from 33% of organizations in 2023 to nearly 80%. 

As an IT professional, you’re living the fact that AI adoption is happening faster than any previous wave of SaaS. Employees aren’t waiting for your approval, either. They’re just charging ahead with whatever tools work to solve problems in real time.

The trouble is those tools are hungry for data – your data. And this is where shadow AI risks become impossible to ignore. Each day, your employees and organization’s sensitive information is being:

• Added into prompts
• Analyzed by external models
• Transformed into LLM outputs for the world to read 

And this happens without clear policies from your organization, any visibility to IT, and certainly no control. Taken together, this makes shadow AI fundamentally different from traditional SaaS and significantly harder to govern.

Recent research shows that only about 33% of organizations have meaningful governance controls in place, while nearly 90% have no formal AI governance framework. At the same time, few have the capabilities to enforce AI assurance at scale. 

So most organizations are behind here, and that gap is quickly becoming one of the most serious hidden risks of SaaS. 

Integrations are now an attack surface

Unauthorized applications may read, write, or store sensitive data, or integrate with others that do, leading to unintentional data exposure. This typical SaaS security risk can arise from Shadow IT.

Every time a user downloads a new app, and mindlessly clicks through the fine print they don’t bother to read, that “Allow access,” clause activates. Whether they realize it or not, they’re making a security decision best left in the hands of IT and security teams.

OAuth integrations are the connective tissue of modern SaaS

They enable automation, streamline workflows, and eliminate manual work. But OAuth integrations also create a labyrinth of persistent and invisible access paths between systems.

Once established, those paths rarely get another look, which means permissions granted once endure indefinitely. 

At the same time, apps that are no longer used can still retain access providing entry to your sensitive data to a patient hacker. That’s the reality of interconnected environments.

Of course, vendor assessments are an important part of control risk. 

Vendor security reviews are not enough

External vendors or integrations can inadvertently expose data within your SaaS environment. This is why vetting and understanding integration updates is important. 

Even with vetting, without a centralized way to evaluate or revoke those permissions at scale, SaaS security risks become systemic, multiplying risk.

App misconfigurations amplify SaaS risk

Not all risk comes from attackers. A lot of it comes from small everyday decisions that add up to catastrophe. For example, one user shares a file too broadly. Another user is granted permissions that are excessive. Another user forgets to change a default setting 

Individually, none of these seem like major issues. But they do add up and at scale, they are.

Misconfigurations are the most common, and most normal, category within the hidden risks of SaaS.

Why? Because they’re largely unseen, there’s no alert and no one bothers to check for them. What results in a gradual drift toward the evitable overexposure. By the time it’s discovered, it’s part of an incident or breach just waiting to happen.

Long forgotten orphaned file links are dangerous

Orphaned file links are references to files that no longer exist, are no longer managed, or have lost their proper ownership/context in a system. 

Generally, these older file links show up in cloud storage, shared Google drives, backups, and individual Microsoft drives alike, creating many SaaS security risks. For example, a single ghost link can lead to:

• Unauthorized access: A link for file that remains publicly accessible even after the owner thinks settings were changed
• Data leakage: Old documents, backups, spreadsheets, contracts, or credentials remain reachable through forgotten URLs
• Privilege bypass: If access controls were tied to the original owner or folder, orphaned files can bypass updated permissions
• Attack surface expansion: Attackers can scan for abandoned links to find sensitive information.

SaaS compliance risks grow faster than an organization’s control capabilities

In the old on-prem world, compliance used to be about knowing where your data lived.

With traditional SaaS and particularly AI-powered SaaS, it’s about understanding how data moves and which apps and users can touch it at any point along the way.

In the maze of SaaS integrations, files, and interactions, getting a grip on data movements is a much harder problem. SaaS compliance risks compound because:

• Data is distributed across dozens (or hundreds) of tools
• Access isn’t static as it constantly changes 
• AI apps are a black box of data flows 

By default, this makes audit trails incomplete. And even if strong policies exist, enforcement is spotty without automation to enforce them at scale.

What this adds up to is an enormous control gap that both regulators and attackers are starting to notice.

Summary of the hidden risks of SaaSDefinition

Shadow AIEmployees using unsanctioned GenAI apps on corporate devices

Overly permissive file sharingFiles shared with excessive permissions

Orphaned file linksShared file access after users leave or files are moved or deleted improperly

Third-party app integrationsOAuth apps gain broad permissions to SaaS data

Excessive permissionsUsers/apps granted broader access than necessary

Weak authenticationNo MFA or strong passwords

Sensitive data exposureEmployees uploading sensitive corporate data into unapproved apps

Inactive SaaS licenses or shared workspaces/Slack channelsAccounts remain active or old projects or teams remain externally accessible

Compliance driftSaaS configurations change over time

Supply chain/third-party risksRisky integrations and vendor sprawl

Non-human identitiesHard-to-monitor service accounts, bots, and AI agents with broad access

Evolving attacksMFA bypass/weak MFA (linked to many breaches), forward rules manipulation, insider threats, and multi-stage extortion (data theft + encryption + leak threats)

Traditional SaaS management falls short because it stops at visibility

Most SaaS management strategies still follow the same pattern:

Discover apps 

Monitor usage 

Run periodic audits 

That approach is flawed because it assumes risk is static when SaaS environments change constantly. In your organization last week, you probably had:

• A new employee joins
• A former employee departs
• Permissions evolve for many users
• Integrations added without IT involvement
• A new AI app gets added

By the time you get around to your monthly or quarterly review, it’s already outdated.

Visibility is useful, but on its own, it doesn’t reduce risk. Without automated policy enforcement for continuous review and remediation, some degree of security and compliance risk lingers.

SMPs in 2026: cross-app orchestration layer for continuous SaaS governance

This is where most organizations hit a wall. Sure, they might have visibility, policies, and understanding of their risks. But without a way to act across their entire SaaS environment in real time, governance action stops cold.

An SMP takes action

A SaaS Management Platform (SMP) with Data Loss Prevention (DLP) capabilities fills this gap. It’s more than another dashboard. It’s the orchestration layer that connects:

• Identity systems
• SaaS applications
• Integrations
• Governance policies 

Most importantly, it can act on those policies. With an SMP, organizations can:

• Enforce least-privilege access automatically
• Execute instant offboarding across all apps to cut access
• Detect and remediate misconfigurations in real time
• Expose and control OAuth integrations and third-party access
• Govern AI usage in a browser by using a browser extension

Continuous, automated control across every system that matters

Without orchestration, governance doesn’t scale. And without scale, the hidden risks of SaaS stay hidden.

A modern approach to reducing the hidden risks of SaaS

Managing SaaS risk in 2026 isn’t about adding another handful of tools, people, and activities, it’s about confronting those SaaS security risks differently. Effective organizations must continuously:

• Discover everything: apps, human and non-human identities, integrations, files, and AI usage
• Define clear policies: access, data, file sharing, and behavior
• Enforce all policies automatically across apps in the stack
• Monitor continuously and not from time to time
• Orchestrate the entire lifecycle: onboarding to immediate offboarding and everything in between

We used to think of this as a SaaS management maturity model, but in fact, to do business in the age of AI, it’s a non-negotiable requirement.

Automation is essential

SaaS complexity was already outgrowing manual control. Now AI-powered SaaS is accelerating it to the degree that continuous SaaS governance will be where competitive advantage is gained or lost. Because without it, no organization can truly benefit from AI.

The hidden risks of SaaS demand continuous control

The hidden risks of SaaS didn’t disappear, but they have evolved from knowing what you have in your stack. 

Instead, risks morphed from apps to access. From shadow IT to shadow AI. From isolated tools to interconnected systems. And most importantly, they moved into areas that simply cannot be managed manually. Only automation can do it. 

Identity risk is at the center of SaaS security risks. SaaS compliance risks are expanding alongside AI. And integrations are quietly increasing exposure across the board. Organizations that rely on visibility alone will always be behind.

Those that adopt continuous, automated governance, powered by an SMP like BetterCloud, will remain in control. 

Think BetterCloud, a CoreStack company, can help you remain in control in the age of AI? Explore BetterCloud’s latest resources, including our latest State of SaaS Report, a mini-SaaS management checklist, and platform capabilities built specifically for modern SaaS management, security, and governance in the age of AI.