Data Classification: Why is it necessary?

Today, every business sector is increasingly data-driven. That makes it more imperative than ever to identify, manage, and protect your data. Data classification takes an information-driven approach to identifying and sorting your data. It helps you keep your data secure and in compliance. It also makes your processes and decision-making more efficient. It reduces data management costs and helps your organization reach business goals faster.

What is Data Classification?

Data classification is a method for defining and categorizing files and other critical business information. It’s mainly used in large organizations to build security systems that follow strict compliance guidelines but can also be used in small environments. The most important use of data classification is to understand the sensitivity of stored information to build the right cyber security tools, access controls, and monitoring around it.

Data classification is the process of categorizing data assets based on their information sensitivity. By classifying data, organizations can determine two key things:

  • Who should be authorized to access it?
  • What protection policies to apply when storing and transferring it.

Classification can also help determine applicable regulatory standards to protect the data. Overall, data classification helps organizations better manage their data for privacy, compliance, and cyber security.

data classification

Why is it necessary?

There are several reasons to conduct ongoing data classification, including maintaining compliance with ever-changing data regulations – like GDPR or HIPAA – and preventing security incidents.

Classification also acts as a visual cue for your employees and users to better understand the level of safety and alertness required when handling a given document. Classification gives your business insight into the data it is creating, the data it is collecting, and its level of sensitivity.

Data classification can also help you reach your business objectives and enhance operational efficiency. Knowing where millions of files are and what purpose they serve allows your company to analyze data and see trends, which enhances decision-making and streamlines productivity. Organizing data and identifying those trends early on can also reduce maintenance and storage costs.

Types of Data Classification

In the most simple terms, data can be recognized and categorized in three approaches. These are:

  • Content-based classification: In this classification type, the contents of each file are the basis for categorization.
  • User-based classification: User-based classification relies on the user’s knowledge of creation, editing, reviewing, or dissemination to label sensitive documents. These individuals can specify how sensitive each document is.
  • Context-based classification: Context-based classification focuses on the context of the data, such as the location, application, and creator, as well as other variables that affect the data.

The Benefits of Data Classification

Data classification uses intelligent search to help you better understand your data. It scans your data to help you understand what types of data you store and where it is located. This offers your organization several distinct advantages.

First, it gives you important insights into your data to help you mitigate risk. It tells you where you are storing sensitive and regulated data. Once you know which classes of data need protection, you can establish a more effective data security strategy.

It also simplifies the process of managing ever-increasing volumes of data. That boosts user productivity and improves decision-making. It improves your data governance efforts, which also benefits your regulatory compliance efforts.

Data classification also helps identify duplicate, outdated, or unneeded data. Removing that data can reduce storage and maintenance costs. That helps your organization operate more efficiently.

data classification

Data Classification Process

When you decide it’s time to classify data to meet compliance standards, the first step is implementing procedures to assist with data location, classification, and determining the proper cyber security. Executing each procedure depends on your organization’s compliance standards and the infrastructure that best secures data. The general data classification steps are:

  • Perform a risk assessment: A risk assessment determines the sensitivity of data and identifies how an attacker could breach network defenses.
  • Develop classification policies and standards: If you generate additional data in the future, a classification policy enables the streamlining of a repeatable process, making it easier for staff members while minimizing mistakes in the process.
  • Categorize data: With a risk assessment and policies in place, categorize your data based on its sensitivity, who should be able to access it, and any compliance penalties should it be disclosed publicly.
  • Find the storage location of your data: Before deploying the right cyber security defenses, you need to know where data is stored. Identifying data storage locations points to the type of cyber security necessary to protect data.
  • Identify and classify your data: With data identified, you can now classify it. Third-party software helps you with this step to make it easier to classify data and track it.
  • Deploy controls: The controls you employ should require authentication and authorization access requests from every user and resource needing data access. That access should be on a “need to know” basis, meaning users only receive access if they need to see data to perform a job function.
  • Monitor access and data: Monitoring data is a requirement for compliance and the privacy of your data. Without monitoring, an attacker could have months to exfiltrate data from the network. The proper monitoring controls detect anomalies and reduce the time necessary to detect, mitigate, and eradicate a threat from the network.

Is it worth the effort?

Is Data Classification worth the effort? You be the judge. Are you concerned about security and compliance? Would you like to increase the ROI of multiple technology investments you or your organization have made? Do you think there is untapped potential and intelligence to be derived from the terabytes of data withering away in your environment already?

Not unlike anything else that’s worth doing, data classification requires some tough decision-making and planning. It’s important to keep in mind, however, that every compliance standard, every breach, and virtually every initiative comes down to the same thing; your data. Knowing your data is knowing what to do with it.


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