Why is Data Retention Policy important for enterprises?
A company's data retention policy dictates not just how the company stores data for purposes of compliance or regulation but also how the company gets rid of data after it is no longer needed. Learn Best Practices to establish a good Data Retention Policy.
According to some reports, data has a value that exceeds that of oil, making it one of the most precious resources in the world at present. Since then, data has become extremely valuable to businesses of all types and a prime target for cybercriminals. There are several rules and regulations in place to protect the astronomical amounts of data that businesses acquire every day (up to 7.5 septillion gigabytes); therefore, it's crucial that your company establish and strictly adhere to strict data retention policies.
A company's data retention policy dictates not just how the company stores data for purposes of compliance or regulation but also how the company gets rid of data after it is no longer needed. Data Retention Policies also establish how Data Recovery and Backup solutions work within an organization.
No matter how minimal, a data retention policy should detail the required structure and type of documents and data, the time they should be retained, and the mediums in which they are stored. Generally, these criteria will be based on the regulations set forth by whichever authority regulates the relevant industry.
What are the different types of Data Retention policies?
The scope, location, and duration of data storage and archival are all key considerations in the data retention policy. When the retention time term for a certain data set has passed, the original data in question can either be destroyed or relocated as historical records to secondary or tertiary storage, depending on the needs that have been defined. As a result, the organization will maintain compliance while preserving the primary storage's integrity.
Organizations often create their own data retention policies, but they must also ensure that these policies satisfy or exceed all legal data retention regulations, especially in highly regulated industries.
This is why it's common practice for businesses to adopt a data retention policy template tailored to their particular sector.
The regulations concerning the retention of data may be broken down into four areas:
- Regulations imposed by the government, such as those formulated by the FTC and the IRS.
- International standards in accordance with those established by ISO, such as ISO/IEC 27040, ISO 9001, ISO 17068:2017, and 27001.
- Compliance with GDPR, PCI-DSS, and CCPA, among other industry rules.
- Internal regulations, including version control and the preservation of employee details.
To ensure that your data retention policy considers all personal data stored by your business, one should conduct an in-depth audit of all collected data.
Depending on your data retention policy, you may need to keep certain types of information for longer than others. This includes data from databases, documents, emails, assets, imagery, production, system states, and video content.
The data subject's location should be taken into account next. Data stored in different locations may require separate data retention regulations in some situations. Part of this is that separate databases, servers, hardware, and other places may be subject to different enterprise and regulatory restrictions.
Benefits of implementing a Data Retention Policy
Creating a reliable data retention strategy has several advantages. The most important ones are as follows:
Automated regulatory compliance: The formulation of a policy enables organizations to guarantee that they are in compliance with regulatory obligations that mandate the retention of various data sources.
Fewer possible compliance-related penalties: Any company that claims to keep all the records that must be kept by law must be able to present them to auditors upon request.
By keeping the bare minimum of data, businesses reduce the likelihood that they may incur penalties due to an inability to produce necessary data since doing so would take too much time and effort.
Less expensive storage: Data storage has an associated cost, and it is possible to save that cost by storing fewer data.
Increased relevance of available data: As data ages, it becomes less useful; hence a data retention strategy is implemented to purge this aged data.
Safe from potential legal trouble: When data is no longer required, it is deleted. This eliminates the risk that the data may be uncovered during legal disclosure and used in a manner that is detrimental to the business.
Best Practices for a Data Retention Policy
Each enterprise has specific requirements that must be considered when developing a data retention policy. However, there are several recommendations that companies should consider when creating their data retention policies.
Defining legal requirements: To ensure that a company's data retention policy complies with all applicable laws and regulations, it is necessary to identify the legal requirements of the organization.
Recognizing the needs of the company: Making a useful data retention policy requires more than just following the rules. The requirements of the company should be factored into the retention policy. [It's possible that you need to keep records for longer than the law requires because of operational needs
Consider data types while developing a retention policy: Certain types of data are more valuable than others in any company. Avoid developing a blanket data retention policy for all data types. Instead, the policy has to establish retention rules for different categories of data by defining the types of data that fall within its scope.
Using an efficient data storage and retrieval method: Consider implementing a data archiving system if rules mandate keeping certain data types longer than the company needs. A data archival system may help you save money on archival data storage, streamline your data lifecycle management processes, and assist you in finding specific data in your archives. Air-gapped backups might be useful for the company in this case.
Having a legal hold strategy in place: Data nearing the end of its retention period will need to be manually erased from the system. Therefore the data lifecycle management process will need to be paused if the company is involved in a lawsuit.
Steps to create a Data Retention Policy
In addition to an organization's data retention policy, regulatory and industry compliance standards must also be satisfied. All of the following must be covered in depth in the policies:
- What data is being recorded
- Reason for data collection
- The storage location and media
- How is it protected from unauthorized access
- The retention period of data
The strict restrictions governing the retention of personal data, such as the EU's General Data Protection Regulation (GDPR) and state data protection laws across the United States like the California Consumer Privacy Act, require extra precautions.
There are some key steps for organizations to meet when implementing their data retention policies.
- Figure out who will oversee making the policy. The interdisciplinary nature of this work means that it is unlikely to be completed by a single employee. Data retention policies are often drafted by a cross-functional committee consisting of representatives from IT, legal, and other departments.
- Understand what regulations must be followed by the company. To be effective, the policy must be in accordance with, or even more stringent than, any applicable rules and regulations. Establishing the legal prerequisites early on will serve as the policy's core.
- Document the needs of the company in depth. Finding out how long different types of data should be stored is an important part of this process. Organizations often follow a data lifecycle management procedure in which data is kept active for a certain amount of time, then archived, and finally discarded.
- Determine who will ensure the data retention procedure is carried out in accordance with the policy.
- Think through the best approach for conducting internal audits to check for policy enforcement.
- Determine the intervals at which the data retention policy must be analyzed and modified.
- Collaborate with the company's Human Resources or Legal departments to devise a strategy for the policy's implementation.
- Find out how the standards for data retention are incorporated and enforced at the software level. The decentralized cloud is an increasingly popular location for storing data that must be kept for an extended period. Cloud storage is often less expensive than on-premises options, especially for data that is used infrequently.
- In the case of a disaster at the primary data center, the off-site data protection offered by cloud service providers can be invaluable. Recovery times vary based on data size and tier.
- Draft the formal policy for the retention of data. The final step in developing a policy is to share it with key stakeholders of the organization for feedback and approval.
The key to success is using the appropriate data governance and security technologies. When implemented properly, data retention plans supply the procedures and policies required to manage risks, automate compliance, and cut storage costs. Businesses are turning to content lifecycle management systems and other data storage methodologies to better manage their data for efficient and safe operations.