Data Classification and World Wide Privacy Concerns
Due to the trove of personal information that is currently being circulated worldwide on a daily basis, businesses, and organizations must find ways to organize this information in order to meet a particular objective or task. Moreover, as a result of the rise of data protection and personal privacy legislation around the globe in the past decade, including laws such as the EU’s General Data Protection Regulation (GDPR), as well as the California Consumer Privacy Act (CCPA), just to name a few, many companies must now ensure that their data collection and processing activities comply with applicable legislation within the nation or jurisdiction in which they operate.
For these reasons, many businesses and organizations have looked to data classification policies to aid them in categorizing the numerous forms of personal data they collect. Through such policies, companies can group personal information into specific categories in accordance with the sensitivity level for a particular portion of said information. For example, a large-scale company like the video sharing and social media platform Youtube will be collecting a wide range of personal data from its respective users, including information pertaining to minors, cardholder and financial information, and demographic data, among other things. Likewise, while these categories of information all constitute personal data, data pertaining to minors must be afforded a greater level of protection than contact details.
What can data classification be used for?
With all this being said, a data classification policy can be utilized in a number of different ways. For instance, going back to the increase of data protection laws in recent years, a business operating within an EU member state could use a data classification policy to guarantee that they are complying with the GDPR, as the provisions of the law mandate that organizations secure sensitive personal information in a more strenuous manner than other categories of personal data. Under the GDPR, sensitive personal data includes healthcare information, information concerning religious views, and political opinions, in addition to others.
Alternatively, an organization can also use a data classification policy in order to optimize its costs by making more effective use of the personal data it collects. Due to the budgetary constraints that all businesses will inevitably face when allocating resources, a data classification policy can be used to identify which forms of personal data will provide an organization with the most valuable information possible, while simultaneously recognizing which data elements are less valuable to the bottom line of the organization. In this way, businesses can avoid retaining information that does not align with their long-term plans or goals.
Another benefit that a business can reap when implementing a data classification policy is an enhanced level of data security. To this end, even when a business does not have to abide by a stringent data privacy law such as the GDPR, certain organizations will inherently need to safeguard certain forms of data due to the industry in which they operate. For example, a local retail store will need to safeguard the payment information of their customers in a more rigorous manner than they would utilize when protecting information about their actual products and services. Subsequently, an organization can use this information to pinpoint what forms of personal data should be encrypted, redacted, or otherwise obfuscated, as well as which employees should be designated to perform such data protection tasks.
In staying with the theme of data security, some organizations must not only secure the personal information they collect, but also give customers or clients the peace of mind that their data will remain confidential. This is the dilemma that many government agencies around the world face, as information such as social security numbers cannot be disclosed to the general public under any circumstances. Conversely, legal professionals have an obligation to safeguard certain forms of personal information regarding their clients, irrespective of any data protection legislation that may also be applicable.
In conjunction with the increased level of digital and online communication that has developed in the past 20 years, there has been more personal information circulated worldwide during this period than ever before in human history. This being the case, businesses must discover new ways to both organize and protect these massive amounts of personal data, as the benefits to doing so are very much numerous, while the disadvantages to doing so can lead to adverse consequences for all parties involved. As such, while cost optimization, compliance laws, data security, and confidentiality are just a few of the factors that may influence the effectiveness of a data classification policy, there are many others as well.