What is data classification and how can you do it?

Data classification is crucial to information management, enabling efficient retrieval, sorting, and storage. But what exactly is data classification, and how can it be achieved? This article will delve into the intricacies of data classification, including its various types, sensitivity levels, and more.

We will also provide you with 5 actionable steps to follow in the data classification process, helping you better manage and protect your valuable information. Join us on this informative journey as we demystify data classification and its importance in today's data-driven world.

What is data classification?

Data classification is the method of arranging data into different categories to facilitate easier future retrieval, sorting and storage. A well-structured system can aid in identifying crucial data when required, which is crucial for risk management, compliance, and data security.

Tagging data during the classification process allows for efficient searching and tracking, avoiding duplicate data, thereby decreasing storage and backup expenses and speeding up the search process. Although it may seem technical, every organisation's leadership should comprehend the importance of data classification's importance.

Types of data classification

Data classification often involves various tags and labels defining the data type, confidentiality, and data integrity. Data availability can also be considered when classifying data. The level of sensitivity of data is often classified based on different levels of importance or confidentiality, which are then associated with the security measures taken to protect each classification level.

Three main types of data classification are seen as industry standards: 

• Content classification
  Content classification inspects and interprets files to search for sensitive information. 

• Context-based classification
  Context-based classification considers application, location, or creator, among other variables, indirect indicators of sensitive information.

• User-based classification
  The user-based classification relies on the end user's manual selection of each document. The user-based classification depends on the knowledge and discretion of the user during the creation, editing, revision, or distribution to mark sensitive documents.

 Content, context, and user-based approaches can be good and bad depending on business needs and the data type.

Sensitivity levels for data

Apart from different types of classification, it's important for organisations to assess the risk associated with various types of data, how they are managed and where they are stored or transmitted. Data and systems are classified into three risk levels - low, medium, and high - to determine the level of security measures required.

Low-risk data

If data is publicly available and has a low risk of being lost permanently, then it and the associated systems are likely to pose a lower risk than others. An example of such data would be content on a public website.

Medium-risk data

These data are not intended for public access or use but only for internal use by the organisation or its partners. They are typically not critical to the business operations and do not pose a high level of sensitivity or risk. Data that may fall into the medium risk category include business procedures, cost of goods, and some business documentation. Examples of such data also include emails and documents that do not contain any confidential information.

High-risk data

The high-risk category encompasses any remotely sensitive data crucial to operational security. It also includes data that would be extremely difficult to recover if lost. This category is reserved for all confidential, sensitive, and necessary data, such as financial and intellectual property.

What is the purpose of data classification?

Over time, data classification has greatly improved and is now widely used for multiple purposes, especially to support data security initiatives. Organisations classify data for various reasons, including allowing for easy access, complying with regulations, and meeting other business or personal objectives.

Sometimes, data classification is legally required to ensure that data can be searched and retrieved within specific timeframes. Additionally, data classification is an effective tool for implementing appropriate security measures based on the type of data being accessed, transferred, or copied. This ensures that data is handled and protected in accordance with its sensitivity level, reducing the risk of data breaches and loss.

Why is data classification important?

Data classification is vital in managing data throughout its lifecycle by assigning it to a specific category or group. This process ensures that an organisation follows its guidelines and follows compliance regulations. Companies in heavily regulated industries frequently use data classification workflows to aid with compliance checks and data discovery.

While data classification categorises structured data, it is particularly crucial for unstructured data. Data categorisation can identify duplicate copies of data and eliminate unnecessary data, leading to efficient storage use and data security measures maximisation.

Classifying data in five steps

Getting started with data classification can be straightforward if you follow these five simple steps.

Step 1: Identify data

First, you must identify all the data within your organisation, including where it is stored, how many copies exist, and who has access to it.

Step 2: Categorise data

Next, you need to categorise the data according to its type and determine which category each type belongs to.

Step 3: Determine the sensitivity

Once you have categorised the data, you need to assess each type of data's sensitivity and risk level, assigning it to one of three categories: high, medium, or low.

Step 4: Secure

At this stage, you should determine how much storage is required for each data type and whether additional security measures must be taken to protect sensitive data.

Step 5: Monitor and maintain

Data classification is an ongoing process, so it's important to regularly monitor any changes and new data, making adjustments to your classification as needed to ensure that your data is always properly organised and secure.

Need help with your data?

We excel in data handling and offer expert guidance and support to those in need. Whether you're uncertain about your next steps or require help with data classification, our team is ready to assist you. Reach out to us to arrange a consultation, and together, we can devise the optimal approach tailored to meet your specific requirements.

Additional sources

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