What is the Purpose of Data Classification?

Data Classification
5 min read
James Mignacca
October 12, 2022
James Mignacca
October 12, 2022
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Every day, businesses are collecting, storing and using more and more data. Yet storing huge amounts of data in an unorganized manner (known as unstructured data) is both expensive and risky.

Despite this, unstructured data makes up 80 percent or more of enterprise data, and is growing at the rate of 55 percent and 65 percent per year. Not only does unstructured data run rampant in the average company, but it’s growing at a rate that most companies can’t keep up with.

This signals a huge problem when it comes to how most organizations handle sensitive data. Data gets saved in non-strategic locations across a company’s servers and networks, employees move on, data gets forgotten, and, in many cases, it gets lost entirely.

All these elements significantly increase the average company’s attack surface. Since most companies have no idea what their attack surface is and what sensitive data they have (or where it lives), the majority of data is unrecoverable and not protected.

That’s what the purpose of data classification is. Data classification, in tandem with data discovery software, gives organizations complete visibility into what sensitive data they have, where it lives, and how to retrieve it.

What Features to Look for in Data Classification Software

What is data classification

Data classification is the process of organizing data into categories that make it easy to retrieve, sort and store for future use. This process works by first identifying business data, and then tagging data types to organize it into categories based on file type, content and other metadata.

Strategic data classification makes it easier for an organization to locate and retrieve sensitive data, as well as eliminate duplications of data. This helps companies to reduce storage and backup costs, and is particularly important for cyber risk management and ensuring regulatory compliance.

The purpose of data classification is:

  1. to ensure your business is able to identify and protect data wherever it is located;
  2. to aid in compliance with global data privacy regulations, such as GDPR, HIPAA, CCPA and many others.


How data classification benefits your business

Data classification helps organizations improve their data protection initiatives and ensure that they are complying with regulatory compliance requirements that apply in the geographies where they collect, store, manage and use personally identifiable information (PII).

Here are some of the top benefits businesses can realize from a successful data classification strategy:

  • Improved data protection

Data classification is the next step after data discovery to better protect your data. With data classification you can better identify and separate sensitive data from general business data. Once you know where your sensitive data lives and how to find it, your business will be able to better prioritize security measures, gain valuable insight into who can access sensitive data, as well as better assess your company’s overall risk of cyber threats (your attack surface).

  • Comply with regulatory requirements

Businesses are required by law to protect sensitive data, but it can be difficult to protect that data when you don’t know if, or where, it lives. Data classification allows businesses to identify and tag data subject to specific regulations, so that the company can easily apply the required controls needed to handle and protect the data. Proof of data classification for data privacy requirements can help organizations pass data privacy audits.

  • Access rights

By gaining visibility of the sensitivity of your organization’s data and where it lives, you can begin to understand who should or shouldn’t have access to that data both inside and outside of your business. With these insights, you can start to change the permissions for who has access to sensitive data. Employees should only have access to PII when it’s critical to their job.

  • End-user empowerment

The vast majority of data leaks occur due to employee error. Data classification can help mitigate these errors by bringing data security to the front and center of your team. Adding tags to data through data classification helps to raise awareness of sensitive data for ender users, assisting them in becoming more security minded and helping them to avoid mistakes that could lead to data loss.

Did you know that with the right software you can completely automate data classification, which requires little-to-no time for your team? the Cavelo attack surface management platform today and learn how it can help you continuously identify sensitive data and automatically implement your classification policy where required.

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