What Risk Is Posed by Internet of Things Devices?

Internet of Things devices improve efficiency and enable automation, but they can also introduce security vulnerabilities and create new entry points for attackers. Common risks of IoT devices include weak security configurations, default credentials, unpatched vulnerabilities, limited network visibility, inadequate access controls, and the potential for compromised devices to be used as attack vectors against other systems on the same network. Because many IoT devices prioritize functionality and affordability over security, they may be easier targets for attackers and can potentially provide access to critical systems.

As the number of connected devices continues to grow, understanding IoT security risks is essential for protecting networks, sensitive data, and critical operations. This article explores the most common IoT vulnerabilities and the steps organizations and individuals can take to reduce risk.

What Risks Are Posed by Internet of Things (IoT) Devices?

Internet of Things (IoT) devices can introduce significant security risks because they are often difficult to inventory, monitor, and secure at scale. Unlike traditional endpoints, many IoT devices run specialized operating systems, support limited security controls, and may remain in service for years without regular updates. As a result, they can create blind spots within the environment that attackers can exploit.

As organizations deploy more connected technology, the IoT attack surface continues to expand. Smart cameras, printers, badge readers, industrial sensors, medical equipment, building automation systems, and consumer devices all communicate with networks and exchange data. If these devices are not properly managed, they can provide threat actors with opportunities to gain access, move laterally, disrupt operations, or compromise sensitive information.

Common IoT Security Risks

• Weak or default credentials that remain unchanged after deployment
• Unpatched vulnerabilities due to infrequent firmware updates
• Limited device visibility within the network
• Use of unencrypted or poorly secured communication protocols
• Misconfigurations that expose devices to unauthorized access
• Compromised devices used to attack other systems on the network
• Physical access attacks that bypass traditional security controls

Because IoT devices frequently communicate with multiple systems, they can become attractive entry points for attackers. Once an IoT device is compromised, threat actors may use it as a foothold to discover other assets, move laterally across the network, gain unauthorized access to sensitive resources, or launch additional attacks. This can significantly expand the attack surface and increase the impact of a security breach.

For example, an attacker who gains physical access to an environment may connect a rogue device that appears legitimate to existing security tools. Once connected, the device can create a backdoor, facilitate lateral movement, or provide a platform for additional attacks. Without accurate device visibility and verification, these threats can remain undetected.

IoT devices are also frequently compromised and incorporated into botnets. Compromised devices can be remotely controlled and used to launch Distributed Denial-of-Service (DDoS) attacks, support malicious activity, or maintain long-term persistence within a network without the owner’s knowledge.

Effective IoT security requires more than simply securing individual devices. Organizations need comprehensive visibility into connected assets, continuous monitoring for unauthorized devices, and the ability to identify hardware based on what it truly is rather than what it claims to be.

Risks of IoT Devices in Organizations

In enterprise environments, the risks become even more pronounced. Bring Your Own Device (BYOD) policies, while convenient and cost-effective, increase exposure by allowing personal devices to connect to corporate networks. Employees often connect personal smartphones, wearables, or home-connected devices to corporate resources, sometimes indirectly through VPNs or remote work setups. Each connection creates a potential bridge between secured enterprise infrastructure and less secure consumer ecosystems.

A compromised IoT device can quickly become a gateway to sensitive business data. Once inside, attackers may use the device to access other systems on the network, move laterally across the environment, access confidential information, and expand their reach throughout the organization.

Key Organizational IoT Risks

• Unauthorized device access to corporate networks
• Data exfiltration through compromised endpoints
• Shadow IT and unmanaged devices
• Expanded attack surface due to remote work environments
• Lateral movement across enterprise networks
• Compliance and regulatory challenges

With the average household containing dozens of connected devices, remote workers can introduce a large number of unmanaged endpoints into the corporate environment. This expands the attack surface and makes it more difficult for security teams to maintain visibility and control.

IoT Risks Across IT and OT Environments

IoT risks are not limited to traditional IT networks. They also extend into Operational Technology (OT) environments such as industrial control systems, manufacturing equipment, and critical infrastructure.

In these environments, compromised devices can have real-world consequences, including:

• Disruption of industrial processes
• Downtime in manufacturing operations
• Safety hazards in critical infrastructure
• Financial and reputational damage

Unlike IT systems, OT environments often rely on legacy devices that were not designed with modern security controls in mind. Integrating IoT devices into these environments without proper visibility and security measures can significantly increase risk and expand the attack surface.

As a result, organizations need the ability to identify, monitor, and control all connected devices, including those operating at the physical layer.

Identifying Covert Hardware Threats

One of the biggest challenges in mitigating IoT risks is detecting hardware-based attacks. Rogue devices, such as malicious USB drives, network implants, or spoofed peripherals, can bypass traditional security controls because they operate below the visibility of many software-based defenses.

These threats often go undetected due to limited (Layer 1) visibility. Security tools that rely on software agents or network monitoring may not recognize a device that masquerades as legitimate hardware.

For example:

• A malicious USB device can appear as a keyboard or network adapter
• A hardware implant can intercept or manipulate network traffic
• A spoofed device can mimic trusted equipment to avoid detection

Because these attacks originate at the physical layer, they are effectively invisible to many traditional defenses. Their legitimate appearance raises no suspicion, allowing attackers to establish persistence without triggering alerts.

Why Traditional Security Falls Short

Traditional cybersecurity solutions focus heavily on software and network behavior. While they are essential, they often miss threats that originate at the hardware level.

Common gaps include:

• No visibility into physical device identity
• Inability to detect spoofed or unauthorized hardware
• Delayed detection after compromise has occurred
• Limited control over device-level access

As attackers increasingly exploit these blind spots, organizations must extend their security strategies beyond software and network layers. Effective IoT security requires the ability to verify what a device truly is, identify unauthorized hardware, and detect threats before they gain access to other systems on the network.

How Sepio Mitigates IoT Risks

Sepio addresses these challenges by providing a hardware-first approach to cybersecurity, delivering full visibility at the physical layer.

Using Layer 1 fingerprinting, Sepio creates a unique digital identity for every connected device across IT, OT, and IoT environments. This enables accurate, tamper-resistant device identification regardless of how a device presents itself.

With this approach, organizations can:

• Detect spoofed or rogue USB devices
• Identify hidden or unauthorized hardware implants
• Gain complete visibility into all connected devices
• Enforce granular device-level security policies
• Prevent lateral movement across the network

Sepio’s Zero Trust Hardware Access (ZTHA) blocks unapproved or suspicious hardware before it can establish a foothold. By stopping threats at the earliest stage, organizations can prevent unauthorized access, reduce lateral movement, and limit the impact of hardware-based attacks.

This level of visibility also strengthens existing security investments by providing accurate device context to other security tools, helping organizations improve their overall security posture and better manage the risks of IoT devices.

Protect Your Network from IoT Risks

IoT devices are here to stay, but so are the risks they introduce. Securing these environments requires more than traditional defenses. It demands visibility into the physical layer where many advanced threats originate.

Organizations can further strengthen their IoT security posture by following industry guidance and best practices published by organizations such as NIST’s Cybersecurity for IoT Program and CISA’s Internet of Things (IoT) Resources.

Discover how Sepio helps organizations secure IT, OT, and IoT ecosystems with complete hardware visibility and control. Schedule a Demo to see how you can reduce IoT risk and prevent unauthorized access.