Based on the associated risk value the data are identified and categorized in a database into certain types is known as data classification. Data classification is important for organizations as they collect large amounts of personal as well as sensitive data, so categorizing or classifying them helps in complying with privacy laws. Data classification also helps the organization to implement appropriate security and governance control over the data. It also helps in the maintenance cost and reduction of storage, where the organization can eliminate the data that are not needed.
The key component of data protection and privacy law like the General Data Protection Regulation (GDPR) and other data protection laws is data classification. For example, according to the GDPR classification, the details such as the home address and contact details are classified as Personally Identifiable Information (PII)
Data classification
There are different ways in which data can be classified, where the data are organized into fixed categories. There are different categories such as public data, confidential data, sensitive data, and personal data.
Under the GDPR classification, personal data are divided into two groups, which include General Personal Data and Special categories of personal data.
The General Personal Data Classification GDPR applies to the information without further notification and is not especially sensitive as names, addresses, and email addresses are some of the examples.
The special categories of personal data include the categories that are more sensitive and need to be protected, such as health data, and racial or ethnic data, are some of the examples. These special categories of personal data processing are subject to specific limitations and requirements.
These main rules of classification are also seen in other data protection laws, for instance in the case of the United States Health Insurance Portability and Accountability Act (HIPAA), which mandates the classification of health data as Protected Health Information (PHI). This type of data involves strict privacy and security.
Data Classification in DPDPB and GDPR
In both the Digital Personal Data Protection Bill (DPDPB), 2022, and the General Data Protection Regulation (GDPR), data categorization is covered.
Personal data under GDPR is categorized into two which are general personal data and special categories of personal data. The special categories of personal data require a strong and greater level of protection. But personal data is not generally sensitive and needs no specific requirement, but is used for many purposes
In the Digital Personal Data Protection Bill, 2022 also, a similar system of categorizing is seen. It categorizes data as sensitive personal data, which includes health data, financial data, etc., And Personal data which is identified as any information that is used to identify an individual specifically.
Data Classification — Benefits
Data Classification has a lot of benefits for an organization, initially, the organization can categorize the type of data that they collect, and based on those the security of the sensitive data can be given importance.
By understanding the type of data collected, compliance with regulatory standards can be met with various data protection and privacy laws like GDPR, HIPAA, etc., by encrypting the data and providing more security that prevents data breaches.
Importance of data classification
Data classification is important as it improves data security and allows the organization to meet the regulatory compliance obligations mentioned above. Classifying data also helps to audit and check more easily in terms of accuracy. Creating data categories and applying security rules helps in meeting the regulatory requirements since the sensitive information collected by the organization must be deleted after a defined period of time.
If you’re an organization, that wants to comply with the regulatory requirements then classify the data collected and protect and secure them to earn the trust of the customers.
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