In corporate travel, shadow IT is the use of unapproved tools, apps, and platforms to plan, book, or manage trips and expenses outside your company’s official systems.

This can include:

• Booking flights or hotels on consumer travel sites instead of the approved corporate platform
• Using personal email or messaging apps to manage itineraries
• Uploading receipts to free scanning or OCR apps that store data in third-party clouds
• Using unapproved AI tools to search for “better deals” or build itineraries

The concern is growing because the overall IT footprint is expanding and AI tools are now mainstream. In fact, 78% of employees admit to using unapproved AI systems at work. When this behavior spills into travel and expense (T&E), it creates risk for:

• Security – sensitive travel and payment data ends up in unmanaged tools
• Finance – spend is harder to track, validate, and optimize
• Compliance – it’s more difficult to meet frameworks like GDPR, SOX, and PCI DSS
• Duty of care – travel managers lose visibility into where people are and how to reach them in an emergency

In short, shadow IT in travel isn’t just a tech issue; it reshapes how safely and efficiently your organization manages people on the move and the money spent to get them there.

Shadow IT and shadow AI show up as very tangible costs in T&E, not just abstract risk.

Key cost drivers include:

• Direct fraud and reimbursement losses
  When employees book travel through third-party or consumer tools, it’s harder to validate what’s legitimate. That makes fake receipts, inflated claims, and duplicate filings more difficult to spot and control.
• Illegitimate bookings and rogue vendors
  Unapproved sites can be compromised or outright scams. This can lead to card fraud, chargebacks, and lengthy investigations that consume finance and IT resources.
• Inefficient spending
  By bypassing corporate booking tools, employees often lose access to negotiated rates and discounts. Even if the price looks good in the moment, the organization misses out on contracted savings that add up over time.
• Increased administrative overhead
  Manual expense reports, chasing receipts across multiple channels, and reconciling different payment sources all increase processing time and cost. Fragmented data also means weaker reporting and inconsistent analytics, making it harder to spot trends or leakage.

AI adds another layer. Employees may use consumer AI tools to find “better deals” or auto-generate expense documentation. But AI models can scrape outdated or invalid data, leading to inaccurate recommendations and bookings that don’t align with policy or negotiated programs.

Over time, these factors can add up to millions in avoidable expenses and lost savings, while also increasing operational friction for finance and travel teams.

Outright bans rarely solve shadow IT; they usually push it further out of sight. A more effective approach combines policy, education, and better tools.

Practical steps include:

1. Invest in user-friendly, consumer-grade T&E tools
   Employees often turn to shadow IT because official tools are slow, rigid, or unintuitive. If it takes too long to load listings or they can’t use preferred payment methods, they’ll look elsewhere. A modern, secure T&E platform that feels like the apps they use at home is one of the strongest counters to shadow IT—people should want to use the corporate tools.
2. Educate employees on risks and responsibilities
   Make training on shadow IT and AI part of your regular security and compliance program. Explain how unapproved tools can lead to:
   • Data breaches and privacy violations (e.g., receipts stored in free OCR apps on third-party servers)
   • Travel safety issues when trips aren’t logged in official systems
   • Non-compliance with GDPR, SOX, PCI DSS, and internal policies
   Help employees see that approved systems protect them as well as the organization.
3. Set clear, practical AI usage guidelines
   Rather than ignoring AI, define where and how it can be used. Communicate both the benefits and the risks, and encourage responsible experimentation so people don’t feel they need to hide their AI usage.
4. Learn from existing shadow tools
   Use shadow IT as a signal. Identify which unapproved tools are popular and why. This can highlight gaps in your current tech stack and the features or workflows employees expect from travel tools. Where appropriate, you can either bring similar capabilities into your approved platforms or formally evaluate and onboard those tools.
5. Align cross-functional governance
   Legal, IT, finance, operations, and HR should work together on policies that are realistic and well-communicated. The goal is to reimagine travel management as a secure, user-centric experience rather than a set of rigid controls.

By combining better technology with clear guidance and ongoing education, you can significantly reduce shadow IT in travel while still giving employees the flexibility and experience they expect.