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Data Classification Policy

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By: Nihad Hassan

November 15, 2021

In today's Information Age, organizations of all sizes and across all industries create, store, and process more information than they ever did before. The volume of digital data is increasing explosively over time. According to Statista, from 2020 to 2022, the total enterprise data volume will go from approximately one petabyte (PB) to 2.02 petabytes. This is a projected 42.2% average annual growth over these two years.

A significant part of organizations' processed information is sensitive, such as customers' personal information (including health information), proprietary information, tax records, trade secrets, and other legal documents, to name only a few. Keeping such information confidential, secure, and in compliance requires a high level of data management and control. This requires an organization to deploy various data management and security tools and adopt best practices when handling data. The most important approach to secure information assets is establishing data classification.

What Is Data Classification?

Data classification is the process of dividing an organization's data into groups (or classes) based on some criteria, their sensitivity level, the risks they may be subject to, and the compliance requirements (such as GDPR, HIPAA, and PCI DSS).

To protect your sensitive data properly, you need to find this data, classify it according to its importance, and finally tag it. After classifying the data, an organization will ensure that each class of data is only available to authorized users. The data is handled according to the enforced data protection regulations.

What Are Data Classification Policies?

A data classification policy contains the various data classification levels (e.g., Top secret, Secret, Confidential, Sensitive, Unclassified) or classes for a specific organization. It also defines the rules for classifying various data types, so each piece of information or file will fall in one category.

The main goal of a data classification policy is to ensure that sensitive information is only accessed by authorized users and is handled according to the security risks that an organization could be subject to. Data classification also ensures that collected data within an organization is labeled and stored to allow easy access to it by authorized users on time and without delay. By classifying data, an organization can focus its efforts to protect the most critical information needed for its work operations.

The Benefits of Data Classification Policy

  1. Enhance data security by focusing security resources to protect an organization's most critical data.

  2. Gain complete visibility over your stored data which ultimately leads to better security. For instance, know the type of stored data, its location, and sensitivity level and check if the current security controls are acceptable to protect it.

  3. Understand the obligations imposed by the various compliance requirements by knowing the level of protection required for each data type.

  4. The ability to spot weak gaps in your security defenses increases and the ability to fix current data security problems.

Example of a Data Classification Policy

A general data classification policy should be composed of the following main parts:

1. Purpose: Define your purpose in creating a data classification policy. 2. Scope: Define the type of data that must be classified—for example, all paper and digital documents containing sensitive info, including any third-party confidential information. 3. Define roles and responsibilities: An organization must designate individuals to carry out various duties according to their positions. For example, a typical data classification policy will mention the following three primary roles:

  • 3.1. Data owner: The person or department responsible for collecting and maintaining organization data. Top management or a person in senior management represents this role.
  • 3.2. Data custodians: This is an IT role; it is the Information Security Officer in a big organization. This individual is responsible for protecting stored data by maintaining it and conducting regular backup of data stored in databases and servers. It is also responsible for audit reports and enforcing access controls to protect this data.
  • 3.3. Data user: This is the user or group of users that must access this data to perform various tasks requested by the data owner.

4. Data classification procedures: Explains how each piece of information or file is accessed to measure its sensitivity, define the person/s responsible for classifying this data, and steps to execute if any particular type of data does not fit in the designated categories. __5. Define the security impact level:__text in bold For each piece of data or file, define its security impact level. For example, identifying and defining the possible consequences that an organization will face if their sensitive data gets compromised due to a data breach.


As more organizations process high volumes of data, the need to have solid data management becomes more vital for organizations. A data classification policy helps an organization categorize its data, making it able to define the proper security controls according to each piece of information.

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