By Brandon Till, Head of Business Solutions, Soldo
AI is becoming ubiquitous in business’ finance functions. Adoption has more than doubled since 2024, and the vast majority of (93%) CFOs expect AI and digital investment to increase over the next year.
But amidst that momentum, do businesses have enough visibility over how AI is being used across their organisation? Our research suggests the answer is no, as almost half (49%) of UK finance leaders admitted to gaps in their organisation’s AI governance strategy.
And those gaps can quickly make innovation a lot less responsible.
Effective governance gives employees the confidence and freedom to experiment with new tools safely, while helping businesses turn that experimentation into measurable returns. But when clear guardrails are missing, most employees won’t simply wait until they’re implemented. Instead, they may adopt AI tools independently. And while they’ll do so with perfectly legitimate intentions, many won’t understand the weight of the security or compliance risks that could be involved in doing so.
This set of circumstances can create fertile ground for shadow AI. Businesses are left with little visibility over which tools are being used, what information is being shared and where risks may be building.
The tension between adoption and governance
For an industry that often gravitates towards tried and tested ways of working, it’s genuinely encouraging to see AI embraced so openly by finance teams. In fact, 83% of finance leaders believe AI will play an important role in helping them achieve their business goals.
What’s less encouraging is that almost a quarter (23%) admit they have little to no AI governance measures in place. That represents a disconnect finance leaders can’t afford to ignore.
Too often, governance is treated as something to think about and address only once the adoption of new technology is in motion. In reality, the two have to be developed alongside one another. There’s often a concern that governance can put the brakes on innovation. But that’s missing the point. Good governance doesn’t stop organisations from innovating. It exists to make sure that innovation happens safely and in a way that business can measure and trust.
Without that foundation, AI adoption can quickly become fragmented, increasing a business’ exposure to compliance and security risks that will only intensify as AI becomes more deeply embedded.
What happens when processes can’t keep pace?
There’s no question that governance gaps are linked to organisational risk, but they also shape employee decisions in a way many businesses may not understand.
When approved tools are difficult to access, limited, or policies aren’t clear, people won’t just stop using AI until they have those guardrails in place, they’ll look elsewhere to get the job done.
And that’s exactly what our research demonstrates. More than a quarter (27%) of UK employees admit they have purchased AI tools for work without approval in the past year. Beyond AI usage, 67% say they regularly bend rules or find loopholes to access company money, while 27% report missing business opportunities because of delays accessing spending.
This isn’t a sign that employees are deliberately trying to undermine company policy. More often than not, it indicates that existing processes aren’t keeping pace with the way people now expect and want to work.
Shadow AI is often a ripple effect when an approved route is harder or less clear than the unofficial one.
Shadow AI is only part of the picture
Businesses may see it as easy to think of Shadow AI as the problem itself. But it’s usually a symptom of something bigger.
When employees feel they need to work around approved processes to be productive, businesses quickly lose visibility over which AI tools are being used and how company data is being handled and shared. For finance teams, this often means losing track of where money is being spent.
That unmonitored use of AI can lead to data leakage, compliance failures, poor record-keeping and inconsistent decision-making. So, it’s critical to tackle the issue before it spirals out of control.
Addressing these issues early on is far easier than trying to untangle them once they have become embedded.
AI governance can pave the way for innovation
At the end of the day, governance should make it easier for employees to explore AI safely. Clear guardrails give people the confidence to try new tools and ways of working, while ensuring the business retains sight of how those tools are being used.
That visibility can bring AI out of the shadows. It also gives businesses firmer foundations on which to improve processes, scale successful use cases and turn AI investment into tangible value.