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The Importance of Data Classification in Cloud Security

You must have wondered at least once about the nature of your data. This is what data classification does in an advanced way. Data classification analyzes structured and unstructured data. It then organizes data into particular classifications depending on its file type and matter with additional properties.

Data classification in cloud security assists an organization in understanding the value of its data, determining if the data is under threat, and implementing measures to limit risks. It serves as the foundation for an organization's effective data security and data management programs. 

Data classification allows organizations to properly manage, secure, and control their data resources by providing classification levels, which we will discuss in detail later. These levels allow businesses to implement security measures that are specific to the needs of each data type. 

What is Data Classification in Cloud Security? 

Data classification enables the targeted protection and management of sensitive information. Personally Identifiable Information (PII), Protected Health Information (PHI), and financial data are some of them, depending on their relevance to the organization.

Data classification is critical for meeting regulatory requirements like HIPAASOXCCPAGDPR, and PCI DSS. By labeling private data sets as public, internal, or confidential, organizations can implement suitable cybersecurity protections, access methods, storage rules, and retention policies.

The next blog sections will show you why it is worthwhile to classify your data assets. For example, you may save storage costs by implementing layered backup plans based on the type of classification by supporting data retention dates that are linked with data vulnerability

Role of Data Classification in Information Management and Security

Data classification is the foundation for successful data management and its security. It delivers correctly managed and safeguarded information given the risk degree and significance. Suggested classification methods from standards organizations such as ISO and NIST make it easier to deploy specialized security controls.

Data classification provides a systematic approach to protecting important assets without treating all data identically. This effectively reduces risks and vulnerabilities, leading to the discovery of the amazing benefits of data classification in cloud security. 

Why is Data Classification in Cloud Security crucial? 

With 30,272,408,782 known records hacked in 5,360 publicly disclosed incidents by 2024, data categorization in cloud security is a pressing priority. Data classification enables you to implement appropriate strategy and perform the following valuable actions:

  • Detect internal secret data, such as the customer's SSN (Social Security Number), and protect it, improving data security.
  • Increases data visibility that helps you comply with industry regulations.
  • Minimize storage expenses by implementing tiered backup plans for each classification level or type.
  • Evaluate the requirement for data encryption and to what degree. For instance, extremely sensitive data might call for encryption at rest and in transit, but less sensitive data might just be encrypted at rest.
  • Set up access to data roles and authorization depending on classification levels.
  • Reduce and enhance eDiscovery for legal demands involving sensitive information.
  • Identify the breadth of regulatory compliance for GDPR, HIPAA, and other data privacy legislation.
  • Provide data retention policies that are linked to data sensitivity.
  • Consider the frequency of data backups. Extremely sensitive data might require daily backups and be kept in safeguarded off-site locations, but less sensitive data may just require weekly backups.

In brief, data categorization is the most appropriate security technique for protecting data from unauthorized control, fraud, or damage. Formal data classification principles support effective data security and management governance methods.

What is the Significance of Data Classification in Businesses? 

For the majority of companies, classifying information is an essential exercise that encourages data protection operations, improves security, and maintains regulatory compliance. Classification additionally saves expenses by cutting down additional costs of storing data, increases users' productivity, and allows quick decision-making by removing extraneous information.

Furthermore, sensitive information is usually mandated by law to be securely safeguarded and destroyed from business databases after a specific amount of time. To prevent infringement of the law, companies must develop data types and adhere to security policies.

Many firms have confidential information on their IT infrastructure without realizing it. Implementing data categorization and security rules can assist companies in determining the level of confidentiality and safety required to set up appropriate controls.

How Does Data Classification Help in Data Protection Programs?

A data risk assessment helps you understand how to properly modify your data classification. It also streamlines the data protection program by providing particularly important risks or discrepancies and mindful ways to address them. Data classification is entirely an implemented data security program with many layers that are always in sync with modifications affecting any threats to your data. 

You can also protect your data with digital certificates that provide encrypted connections and website authentication. These digital certificates are called SSL (Secure Socket Layer) certificates, and they mandate a public key’s validity. Several cheap SSL certificates are available for budget-friendly and comprehensive security solutions that aid in data protection programs like Wonders.

How is Data Classified as per Data Sensitivity Levels?

Data classification is practiced in different data sensitivity levels, which include the 5 data types highlighted below: 

Confidential Data: 

  • Guarded zealously
  • Housing trade secrets
  • Financial records
  • Personally Identifiable Information (PII)
  • Protected Health Information (PHI)

Internal Use Only: 

  • Sensitive
  • Less critical 
  • Encompassing internal memos and project plans

Restricted Data: 

  • Pertinent but very sensitive
  • Enclosing customer info
  • Discovering marketing strategies

Public Data: 

  • Openly shared
  • Comprising press releases and marketing collateral

Archived Data: 

  • Dormant but legally retained
  • Housing old financial reports and personnel records

What are the Types of Data Classification?

We can classify data based on users, content, or context:

User-based classification: This entails categorizing files based on the manual assessment of a skilled person. Employees who deal with papers can determine the level of sensitivity. The access parameters like the time the document is created, after a substantial update or review, or before its distribution.

Content-based classification: It is the process of analyzing and categorizing files and documents based on their content and addressing their primary nature.

Context-based classification: This involves categorizing files according to metadata. They consider the application that developed the file, the staff or creator of it, or where the files were composed, modified, or created by the author.

Data Classification Process in a Nutshell:

  • Design a classification plan:

List the categories and standards for each data type. Typical classification levels consist of internal use, public, confidential and restricted. 

  • Determine your data assets:

Companies need to define their structured and unstructured data assets before determining the proper categorization level for each.

  • Automatic Tools and Solutions:

This stage can help with classification by scanning and analyzing data using powerful algorithms and comparing it to predefined categories determined by content, metadata, or other criteria. 

  • Manual Classification: 

Companies should allow for human intervention once subject matter knowledge is necessary to assess data sensitivity or relevance.

  • Construct the relevant controls:

Security controls and rules associated with every classification level allow measures such as encryption of sensitive data, user access limits, and appropriate data retention regulations.

  • Combining Data Classification: 

By incorporating classified data into their security procedures, companies can maximize resource allocation, focus protective measures, and make sound choices regarding essential access controls, retention terms, data storage, and sharing.

As with other aspects of cloud security, an organized and focused strategy reduces vulnerabilities and strengthens the security picture.

How Data Classification and Compliance are Related? 

Despite how many compliance obligations a business must meet, adopting data classification is a critical step. You can use data discovery as an advised strategy to help improve security in a concentrated and effective way. Companies may better deploy resources and prioritize safety precautions if they identify and categorize the private information within their corporate ecosystem.

Data classification must adhere to applicable legal and industry-specific standards, requiring the classification of various data properties. In this regard, the Cloud Security Alliance (CSA) mandates data and its objects to specify the type, origin, legal limitations, and context with many more analyzing parameters. The PCI DSS needs no source tags or domicile.

Role of Data Classification in Data Privacy Regulations:

Organizations are law-abiding to secure data of certain kinds, including personal information or credit card details. Data classification enables data identification that is subjected to certain requirements so that companies can easily implement the necessary controls, measures, and clear audits.

Some data privacy rules where data classification helps with compliance include:

  • EU General Data Protection Regulation: To answer data subject access requests, you can protect their rights by collecting necessary documentation regarding specific persons.
  • General Data Protection Regulation (GDPR): You get established stringent obligations for businesses that handle sensitive data, such as personal information, ensuring openness, responsibility, and authority over how they are handled.
  • ISO 27001: It classifies data according to sensitivity and their worth, allowing it to satisfy the ISO standard's goal of avoiding unauthorized disclosure of data or alteration.
  • PCI DSS: You can detect and safeguard customer financial information obtained through credit card transactions.
  • NIST SP 800-53: You get categorized data to assist federal agencies in more efficiently building and managing their information technology systems.
  • HIPAA: Keeping all of your sensitive health records will allow you to adopt security safeguards for adequate data protection.

Wrap up

Identifying the importance and nature of your data allows you to concentrate security measures on areas of greatest risk. With this, you can guarantee regulatory compliance and enhance your business's data management policies. With a robust data classification system, security-conscious culture, and automation, you can set the best critical indicators for your data protection program!

Gunjan Tripathi
Gunjan Tripathi

Cybersecurity Researcher and Technical Writer

Gunjan is a cybersecurity researcher and tech writer at CheapSSLShop for the last 12 years, covering the latest in cybersecurity trends and SSL certificates and sharing valuable resources on how to stay protected against the constantly evolving threats in cyberspace.