# How Clearwater Analytics’ CISO Blocked a $8.8 Trillion Shadow AI Disaster
When Sam Evans, Chief Information Security Officer (CISO) at Clearwater Analytics, discovered unauthorized AI tools creeping into his company’s systems, he didn’t just see a minor security hiccup—he saw a ticking time bomb. With $8.8 trillion in assets under management at stake, the risks were enormous.
## The Hidden Threat of Shadow AI
Shadow IT—unauthorized software and tools used by employees—has long been a headache for security teams. But shadow AI takes the danger to a whole new level. Employees experimenting with unsanctioned AI tools can accidentally expose sensitive financial data, trigger compliance violations, or even open the door to cyberattacks.
Evans knew that if unchecked, these rogue AI applications could:
– Leak proprietary investment strategies
– Violate strict financial regulations
– Compromise client trust in a highly competitive industry
## How Clearwater Analytics Shut Down the Risk
Instead of waiting for a breach, Evans took proactive measures:
1. Visibility First – Implemented AI monitoring tools to detect unauthorized usage.
2. Policy Reinforcement – Educated employees on AI risks and set clear usage guidelines.
3. Secure Alternatives – Provided approved AI solutions that met compliance standards.
The result? A bullet dodged—no data leaks, no regulatory fines, and no erosion of client confidence.
## The Bigger Lesson for Financial Firms
Evans’ quick action highlights a critical truth: AI governance isn’t optional anymore. Financial institutions managing trillions can’t afford to let shadow AI run wild.
### Key Takeaways for CISOs:
✅ Monitor AI usage aggressively—assume employees will experiment.
✅ Educate teams on why unauthorized AI is a business risk, not just an IT issue.
✅ Offer secure alternatives—if employees have better tools, they won’t resort to risky ones.
In an era where one AI misstep can cost billions, Clearwater’s story is a wake-up call. The question isn’t if shadow AI will target your systems—it’s when. Will you be ready?