With the massive volumes of data generated every day and the increasing dependence on cloud services, businesses today are faced with a rise in cyber security attacks. It is vital for businesses to invest in robust data security solutions to ensure that critical data is protected. But how do you know which data is worth protecting? Information classification helps address the issue by identifying and assigning levels of sensitivity to the information an organization owns, making it a necessity for ensuring information security.

In this article, we will discuss what is information classification, how to classify information, why it is important for any organization, the various criteria for information classification, and its benefits.

What Is Information Classification?

Data Classification or Information Classification is the process of classifying corporate information into significant categories to ensure critical data is protected. For example, financial files within an organization should not be kept together with files from the public relations department. Instead, they should be maintained in separate folders, which are accessible only by individuals who are entitled to working with each kind of data. Thus, the stored information stays safe and can be easily accessed when needed. 

Businesses handle vast amounts of data every day – customer information, invoice records, order history, email lists, user data in software — the list goes on. However, not all data is equally important, and some pieces will require more protection than others. Such sensitive and important information needs to be protected from vulnerabilities to security threats. That is why information classification is so important. It helps to determine which information needs special protection and how to label and classify your data. 

How to Classify Information?

Good information classification acts as a foundation to keep your business data organized, accessible and useful. It is a complex and hefty task to classify information in high volume, variety, and relevance. 

Most companies follow the following steps to make things easier:

Analyze and understand information assets and assign the level of sensitivity to each one of them.

The first step of information classification is assigning value to each information asset, depending on the risk of loss or harm if the information gets disclosed. Based on value, information is sorted as:

  • Confidential Information – information that is protected as confidential by all entities included or impacted by the information. The highest level of security measures should be applied to such data. 
  • Classified Information – information that has restricted access as per law or regulation. 
  • Restricted Information – information that is available to most but not all employees. 
  • Internal Information – information that is accessible by all employees
  • Public Information – information that everyone within and outside the organization can access

Label Each Information Asset

Once all information is classified depending on its value, a system for labeling the data is created. Good information classification follows simple, easy-to-understand, and consistent labeling.  

Handling Each Information Asset

Finally, the company designs a set of rules and chalk out ways to protect the information based on classification. 

Why Does Information Classification Matter?

A well-planned data classification system makes important information easy to manipulate and track, besides making data easier to locate and retrieve. The most common reasons why information classification is of particular importance are:

  • Efficiency - on a basic level, businesses that have their information classified are able to manage and deliver day-to-day operations more efficiently. Data can be easily located and retrieved; changes easily traced. 
  • Security – protecting sensitive information is the main idea behind information classification. It is a useful tactic to classify information in order to facilitate appropriate security responses according to the type of information being retrieved, transmitted, or copied. Data encryption, data storage in safe servers with strong firewalls, and compliance with data protection standards can help immensely to protect against outside threats. Besides, there can be inside threats that are equally dangerous – like intentional data theft, accidental data breaches. Hence it is very important to restrict information and prevent threats. 
  • Safety – information classification helps create security awareness throughout the organization. The responsibility of protection of information lies with everyone handling the information. The system ensures that employees understand the value of the information they work with and safeguard that information. 
  • Compliance – information classification in information security helps organizations label information as sensitive, protect it against threats, and help comply with regulations like the GDPR audits. Organizations can easily implement standards to classify information. 

Criteria for Information Classification

  • Value – the most frequently used criteria for classifying information is the value of data. If the information is so valuable that their loss could create significant organizational problems, it needs to be classified. 
  • Age – if the value of certain information declines over time, the classification of the information may be lowered.
  • Useful Life – if the information is available to make desired changes as and when needed, it can be labeled ‘more useful’.  
  • Personal Association – information that is linked to specific individuals or is addressed by privacy law needs to be classified. 

Benefits of Information Classification

Information classifications help prioritize data protection efforts to increase data security and regulatory compliance. Among its benefits are improved user productivity and decision making and reduced costs by eliminating data that’s not needed. 

Read on to find the key benefits information classification brings to the table.

  • Rediscovery of business - Identification of information is the beginning step in Information classification. Organizations, therefore, need to actively discover information that is generated, stored, and accessed by departments within the organization. This information discovery basically leads to rediscovering the business. This allows decision-makers to review how information is empowering the business or possibly functioning ineffectively. 
  • Raises awareness of cyber risk - Information security teams connect face to face with business owners to discuss information security and how it could impact their business. Thus, owners have a direct contact point where to reach if they have questions or need help regarding managing cyber risks or incidents. Awareness of cyber threats and information security management rises to realistic levels, prompting the issue to be discussed and accepted at all levels throughout the organization. 
  • Optimize risk and resources – defining information classification improves risk and information classification resources, leading to efficient and effective protection of information. By classifying data based on sensitivity and level of business impact, businesses are informing which information must be protected with high priority, thereby deciding where to spend the information security budgets. 
  • Limit dissemination – well-defined information classification is controlled by laws and regulations, thereby allowing businesses to restrict their dissemination on a need-to-know basis. This reduces the chances of data theft or loss, which helps to minimize penalties charged due to non-compliance. 

As every business is different, each business will have specific information classification needs to address and devise a strategy based on that. Companies are focusing on choosing the classification system that works best for their data and work to make it remain secure against cybersecurity challenges. 

Cyber security is a fast-growing industry with a growing need for cybersecurity professionals to protect businesses from potential attacks. If you wish to know more about Information Classification and Cyber Security, you can go through our cybersecurity tutorial, which has everything covered about the topic. 

A career in this growing field can help you be a part of an exciting, challenging field that is high paying too. Consider enrolling for Simplilearn cyber security training course, designed to build strong foundational skills for a successful Cyber Security career. 

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