From Shadow IT to Shared Accountability: Tackling Governance Blind Spots in Microsoft 365

Every day, employees in Australian financial organisations may be unknowingly creating compliance risks with a single click: by creating a new Teams workspace, sharing a Power BI dashboard, or collaborating on an unmanaged SharePoint site. This phenomenon, known as shadow IT, occurs when employees use unauthorised tools or platforms that bypass formal IT oversight. This isn’t just an IT challenge; it’s a strategic governance imperative that demands immediate attention.

The scale of the risk makes it impossible to ignore. According to IBM’s 2025 Cost of a Data Breach Report, over 40% of organisations reported AI-related security incidents due to unmanaged access and a lack of governance — incidents often driven by these very shadow IT practices. 

This blog explores how Australian financial institutions can resolve these governance blind spots by implementing role-based access control (RBAC), enabling delegated administration, leveraging visibility tools, and promoting secure collaboration through user education and policy enforcement — eliminating the need for shadow IT by guiding users towards approved, compliant platforms. We also highlight how the AvePoint Confidence Platform supports these strategies, helping financial organisations enforce least-privilege access, improve accountability, and stay compliant with APRA CPS 234 – Information Security and the Privacy Act 1988. 

Complexity and Governance Issues in Microsoft 365

Microsoft 365 is the digital backbone of collaboration and productivity across Australia’s financial services industry. But with its flexibility comes complexity, and complexity often breeds risk. Shadow IT thrives in environments where users can create Teams, SharePoint sites, Power BI workspaces, install unsanctioned apps, or use personal cloud storage without controlled oversight. These unmanaged assets often contain sensitive data but lack proper access controls or lifecycle policies.

In financial services, this is more than an IT issue — it’s a compliance liability. Regulatory frameworks like CPS 234 require institutions to maintain visibility and control over their information assets. What’s striking is CPS 234 requires entities to detect and report any significant control weakness while applying appropriate remediation and issuing regulatory notifications should vulnerabilities persist. 

Yet many organisations struggle to answer basic questions: Who has access to what? Are permissions aligned with roles? Are sensitive documents being overshared? 

These blind spots aren’t just theoretical concerns. Forrester’s Predictions 2025: Cybersecurity, Risk, and Privacy report anticipated that breach-related class-action costs will outpace regulatory fines by 50%. This signals a fundamental shift in the risk landscape. Without a clear governance model, Australian financial institutions risk falling out of compliance — or worse, suffering a breach that erodes customer trust and damages brand reputation.

Role-Based Access Controls and Delegated Administration

One of the most effective ways to reduce governance risk is to implement RBAC. RBAC ensures that users only have access to the data and tools necessary for their role; no more, no less. This aligns perfectly with the operational demands of Australian financial organisations, where RBAC becomes critical when dealing with segregated duties mandated by CPS 234 — for example, ensuring that a credit analyst can access loan documentation but not a customer’s personal banking details, or allowing a regional branch manager to view local performance dashboards without accessing strategic planning materials from the head office. This principle of least-privilege access directly addresses regulatory mandates while also preventing over-permissioned users from becoming inadvertent insider threats.

But RBAC alone isn’t enough for Australia’s complex financial landscape. A major bank might have dozens of business units across states, each with unique compliance requirements, from superannuation teams managing APRA-regulated funds to wealth management divisions handling Australian Securities and Investments Commission (ASIC)-regulated advice documentation. These institutions need to delegate administration to regional compliance officers, state branch managers, or departmental heads without compromising central governance. Consider this scenario: A Queensland regional compliance officer might need to manage access to local Teams channels to align with state-specific regulatory updates; however, they shouldn’t have rights to modify Sydney head office’s SharePoint sites.

This is where the strategic advantage offered by AvePoint becomes clear. The AvePoint Confidence Platform enables organisations to:

• Support the automation of RBAC policies, which can help organisations align with APRA’S information security requirements and ASIC’s data governance expectations.
• Enable the assignment of scoped admin roles based on geographical regions, business divisions, or regulatory domains, allowing governance to scale across Australia’s federated financial system.
• Facilitate access reviews that support the creation of audit trails, which are required for APRA supervisory reviews and ASIC compliance examinations.

The real advantage lies not just in having controls, but also in making them work effectively. By combining RBAC with delegated administration, financial institutions can reduce risk, improve operational efficiency, and ensure that governance is a shared concern — not just an IT burden.

Visibility Tools and Shared Accountability

Despite these advances, even the most robust access policies fall short without clear visibility into how they’re being enforced across Australia’s progressive financial services sector. Organisations need comprehensive answers to key governance questions, such as:

• Which employees have access to APRA-reportable data?
• How are permissions evolving during regulatory examination periods?
• Are offshore contractors accessing customer data in compliance with the Privacy Act’s overseas disclosure requirements?
• Is commercially sensitive information being shared across business units in ways that may conflict with competition law? 

Microsoft offers native tools like the Microsoft Purview Compliance Portal, but what’s particularly interesting is that many Australian financial organisations may want to explore additional options depending on the scale and regulatory complexity they face. The AvePoint Confidence Platform can be leveraged alongside native Microsoft tools to enhance visibility and compliance management. 

Consider this challenge: A major bank operating across multiple states with various subsidiaries (banking, insurance, wealth management, superannuation) requires unified oversight that can distinguish between CPS 234 requirements, ASIC market integrity obligations, and Privacy Act mandates. However, the same bank must do all this while also managing access for thousands of employees, contractors, and third-party service providers. 

The AvePoint Confidence Platform bridges this gap between regulatory complexity and operational needs by providing: 

• Unified dashboards that separate APRA-regulated banking data from ASIC-regulated financial advice documentation, enabling targeted compliance monitoring.
• Automated reporting designed for Australian regulatory frameworks, generating audit trails for APRA supervisory reviews, ASIC compliance examinations, and Privacy Act breach assessments.
• Comprehensive alerts for high-risk scenarios like customer data being shared outside Australia.

Beyond the technology itself, the platform is a vital tool that financial organisations can harness alongside strategic cultural changes to foster an environment of shared accountability. When IT, compliance, and business units all have access to the same insights, they can collaborate more effectively. For example, a business unit lead can proactively manage access to their team’s SharePoint site, while compliance teams monitor for anomalies — all within a single platform.

This is a fundamental shift in mindset from centralised control to distributed governance — and it’s essential for scaling secure collaboration in Microsoft 365.

The Future of Governance for Australian Financial Organisations

Shadow IT and fragmented access controls are no longer fringe issues. They represent central governance challenges in today’s Microsoft 365 environments. For Australia’s financial services industry, the stakes are particularly significant, with regulatory scrutiny and customer trust on the line.

By adopting RBAC, delegated administration, and visibility tools, organisations can close compliance gaps and enforce least-privilege access. And with the AvePoint Confidence Platform, Australia’s financial sector can operationalise these strategies at scale — turning governance from a reactive chore into a proactive advantage. 

This is a call to action: Now is the time to assess your Microsoft 365 environment. Are your access controls aligned with your risk posture? Do you have the visibility to enforce compliance? If not, it’s time to explore how the right tools – and the right governance model – can help you move from shadow IT to shared accountability.