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Why you should Classify your Data

As businesses continue to grow and expand, the amount of data they create, collect, process, and store increases rapidly. With the increasing importance of data in business operations, it is essential to classify data to protect it from unauthorised access and misuse.

Data classification is the process of categorising data based on its level of sensitivity and importance. It involves identifying the type of data, the source of data, the intended use of data, and the potential impact of data loss or exposure. Once the data is classified, it can be managed and protected according to its level of sensitivity and importance.

There are several benefits for businesses when they classify their data, some of these include:

  1. Identifying Your Valuable Data: Not all data is equally valuable or sensitive. By classifying data, businesses can identify the data that requires the most protection. This helps businesses to allocate resources effectively and prioritise their cyber security efforts.

  2. Implement Proportionate Security Measures: Once the data is classified, businesses can implement appropriate security measures to protect it. For example, highly sensitive data can be encrypted, while less sensitive data can be protected using access control measures.

  3. Comply with Regulatory Requirements: Many industries have specific regulations that require businesses to protect sensitive data. By classifying data, businesses can ensure that they are compliant with regulatory requirements and avoid potential legal issues.

  4. Manage Data More Efficiently: Data classification allows businesses to manage their data more efficiently. It makes it easier to locate, retrieve, and use data when it is organised and categorised based on its level of sensitivity and importance.

  5. Improved Incident Response: In the event of a cyber security incident, data classification can help businesses to respond more effectively. It enables businesses to identify which data has been compromised and take appropriate measures to mitigate the impact of the incident.

  6. Protect Reputation: Data breaches can have a significant impact on a business's reputation. By classifying data and implementing appropriate security measures, businesses can reduce the risk of a data breach, thereby protecting their reputation.

The process of data classification involves identifying and categorising data based on its sensitivity and value, and any potential impact of a data breach. The following are some steps that organisations can take to classify their data and information:

  1. Identify sensitive data: Identify the types of data that are considered sensitive, such as personal data, financial data, intellectual property, and confidential business information.

  2. Assess the potential impact: Assess the potential impact of a data breach for each type of data, including financial loss, reputational damage, legal liability, and regulatory compliance issues.

  3. Establish data classifications: Establish data classifications based on the sensitivity and potential impact of the data. Common classifications include public, internal, confidential, and restricted.

  4. Label data: Label data according to its classification, so that everyone in the organisation knows the data's sensitivity and the appropriate handling requirements.

  5. Train employees: Train employees on data classification and their responsibilities concerning handling and protecting data.

  6. Define access controls: Define access controls for each classification of data, so that only authorised individuals can access sensitive information.

  7. Implement security measures: Implement security measures, such as encryption, access controls, and monitoring, to protect data based on its classification.

  8. Regularly review: Regularly review data classification to ensure that it remains accurate and up-to-date.


Data classification is an essential step in protecting sensitive data and ensuring the overall cyber security of a business. By categorising data based on its level of sensitivity and importance, businesses can identify which data requires the most protection, implement appropriate security measures, comply with regulatory requirements, manage data more efficiently, and protect their reputation. In today's digital age, data classification is critical for all businesses, regardless of their size or industry.


It's important to note that data classification should be an ongoing process, both in terms of labelling and handling data, but also in terms of scope. The organisation will often create or collate new types of data. Having good data classification and maintaining it is essential for organisations to protect their sensitive data and comply with regulations.


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