AI at Work: How Microsoft Copilot Could Quietly Leak Your Business Data
Microsoft Copilot is becoming the productivity darling of British businesses. It’s rolling out across Outlook, Teams, Word and Excel, promising to summarise meetings, draft emails, and surface helpful files and insights. For many SMEs, it looks like a no-brainer.
But here’s what most business leaders haven’t been told: Copilot doesn’t understand confidentiality. It only understands access. That makes it fast, powerful, and potentially a serious liability.
This isn’t another scare story about AI taking over. This is about understanding exactly how AI at work can expose sensitive data, what UK business leaders should be watching for, and the practical steps you can take to protect your business without stifling innovation.
What Is Copilot, and Why Does It Matter for UK SMEs?
Microsoft Copilot isn’t just a chatbot bolted onto Office 365. It’s a deeply integrated AI assistant that works inside your business applications. It reads your emails and documents, sees your SharePoint and Teams files, and draws on chats, calendars, spreadsheets, even past versions of documents.
Copilot uses your existing Microsoft 365 permissions to determine what content it can pull into its suggestions. And whilst that sounds safe, it also means if someone has access to sensitive data – even inadvertently – Copilot can serve it up. If permissions are too broad (which is very common in SMEs), exposure becomes likely. If you’ve never audited your internal access, you may have no idea what Copilot is capable of.
Unlike traditional data breaches, Copilot leaks don’t trip alarms. No one has to “steal” anything. AI just helpfully delivers it when asked.
Real Examples: How Copilot Has Already Exposed Business Data
This isn’t theoretical. Here are real-world Copilot risks I’ve seen during SME security assessments and pilot tests across the UK.
Finance: Revenue Forecasts in the Wrong Hands
A junior marketing team member asked Copilot to draft a “pitch deck summary for key clients.” The output included next quarter’s revenue targets, intended only for directors.
Healthcare: Patient Data in a Draft Email
An operations coordinator used Copilot to create a follow-up email for a missed appointment. The AI helpfully inserted a summary of past interactions, including personal health details not meant to be shared.
Legal/Accounting: Confidential Contracts in Briefing Notes
A paralegal working on a new client request asked Copilot to “summarise similar cases.” Copilot referenced a completely different client’s contract clauses from a shared folder.
Internal Teams: HR Notes in Staff Communications
A team leader drafting an internal announcement used Copilot to “highlight recent feedback.” The result included references to staff grievances filed confidentially via HR.
None of this was malicious. But it could have triggered GDPR issues, client complaints, and serious reputational damage.
Why AI at Work Is a New Kind of Risk for UK SMEs
Most small businesses focus their security efforts on external threats: phishing, malware, unauthorised access. But Copilot represents a new internal risk vector that flies under the radar.
Here’s what makes it especially dangerous:
It acts within your trusted environment – No alerts. No suspicious activity. Just the wrong file shown at the wrong time.
It operates at speed and scale – One employee can access weeks’ worth of insights in seconds without understanding the source.
It reflects your broken access model – If your Teams or SharePoint folders are misconfigured, Copilot becomes a megaphone for it.
It doesn’t “understand” business context – Copilot doesn’t ask “should this be shared?” It assumes that access equals relevance.
As Microsoft notes in its Copilot documentation, Copilot does not change permissions. But it exposes all the cracks already present.
Recent research shows that over 15% of business-critical files are at risk from oversharing and inappropriate permissions, and the average company has 802,000 files at risk of oversharing.
Misconfigurations like these are now emerging as key trends in enterprise risk management, especially with AI tools amplifying existing weaknesses.
Five Critical Questions UK SME Leaders Must Ask About Copilot
Before rolling out or enabling Copilot across your business, start with these:
- Do we know who has access to sensitive data?
Audit your Microsoft 365 environment. Look at Teams channels, SharePoint folders, and legacy permissions. Start with your most sensitive material – HR, finance, client data.
- Have we tested Copilot’s behaviour in our environment?
Run simulated prompts using test accounts. Try “Show me everyone’s salary,” “Summarise disciplinary actions,” or “List top clients and earnings.” You might be shocked by what Copilot uncovers.
- Are our staff trained on responsible AI use?
Most employees assume Copilot is “safe by design.” They don’t realise it might expose sensitive content. Add AI awareness to your onboarding and cyber security training.
- Do we have policies for AI-generated content?
Decide what Copilot is (and isn’t) allowed to help with. Restrict use for legal, HR or regulatory documents. Document your policy and share it.
- Can we monitor Copilot activity if something goes wrong?
Some Microsoft licences allow logging of AI usage. Even if not, enable versioning, access logs, and data classification tagging.
How to Secure Your Business Against Copilot Misuse
Here’s a practical framework for reducing Copilot risk without shutting off the benefits of AI at work.
- Clean Up Your Access Controls
Remove “Everyone” or “All Staff” permissions from key folders. Use groups and roles for precision. Archive and restrict old projects or abandoned Teams sites.
- Create a Responsible Use Policy
Make your AI use policy part of your Acceptable Use Policy and employee handbook. Set clear boundaries around what Copilot can be used for, where staff should double-check results, and when managers should review generated content.
For a detailed action plan, download our AI checklist for SMEs to support responsible AI governance and reduce exposure risks.
- Train Staff in Plain English
Avoid jargon. Train for understanding. Example prompt: “Imagine Copilot is a very helpful intern. If you wouldn’t trust an intern with the task, don’t trust Copilot with it either.”
- Turn On Logs and Alerts
Use Microsoft Purview if available to monitor Copilot access. Alternatively, rely on SharePoint and OneDrive file history to trace inappropriate access or sharing.
- Assign Oversight to a Human Owner
Assign a named person (often your IT lead, external IT partner, or Data Protection Officer) to review Copilot prompts and outputs on a sample basis each month.
Regulatory Context: UK AI Security Guidance
The UK Government recognises these risks. The UK
AI Security Institute has published new guidance on AI security, and the Code
of Practice for the Cyber Security of AI specifically addresses security
risks from data poisoning, model obfuscation, indirect prompt injection and
operational differences associated with data management.
These vulnerabilities are part of a broader trend of AI cyber threats that UK businesses must proactively address.
For UK businesses, this means AI security isn’t just about
protecting your data – it’s about staying ahead of regulatory expectations.
Don’t Fear AI at Work, But Don’t Ignore It
AI at work isn’t something for “tech people” to
figure out. It’s already here, embedded in your daily tools, answering
questions with impressive speed and accuracy.
But accuracy doesn’t mean discretion. And helpfulness
doesn’t mean safety.
If you’re leading a business in a regulated sector –
finance, health, legal, consultancy – you owe it to yourself (and your clients)
to test your Copilot setup now. Don’t wait for an accidental exposure to
highlight what’s already accessible.
These risks highlight the growing need for expert AI security consultant support to ensure Copilot and other AI tools are deployed safely within UK SMEs.
Need help with a Microsoft Copilot security assessment? I
work directly with UK SMEs to identify and fix internal AI exposure risks –
quickly, discreetly, and with practical recommendations. Get in touch for a confidential
initial consultation.
Looking for broader cyber security support? Explore my cyber security
consulting services or learn more about penetration
testing to protect your business from evolving threats.
