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What is Data Classification? A Data Classification Definition

by Juliana De Groot on Thursday January 3, 2019

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Learn about the different types of classification and how to effectively classify your data in Data Protection 101, our series on the fundamentals of data security.

A Definition of Data Classification

Data classification is broadly defined as the process of organizing data by relevant categories so that it may be used and protected more efficiently. On a basic level, the classification process makes data easier to locate and retrieve. Data classification is of particular importance when it comes to risk management, compliance, and data security.

Data classification involves tagging data to make it easily searchable and trackable. It also eliminates multiple duplications of data, which can reduce storage and backup costs while speeding up the search process. Though the classification process may sound highly technical, it is a topic that should be understood by your organization’s leadership.

Reasons for Data Classification

Data classification has improved significantly over time. Today, the technology is used for a variety of purposes, often in support of data security initiatives. But data may be classified for a number of reasons, including ease of access, maintaining regulatory compliance, and to meet various other business or personal objectives. In some cases, data classification is a regulatory requirement, as data must be searchable and retrievable within specified timeframes. For the purposes of data security, data classification is a useful tactic that facilitates proper security responses based on the type of data being retrieved, transmitted, or copied.

Types of Data Classification

Data classification often involves a multitude of tags and labels that define the type of data, its confidentiality, and its integrity. Availability may also be taken into consideration in data classification processes. Data’s level of sensitivity is often classified based on varying levels of importance or confidentiality, which then correlates to the security measures put in place to protect each classification level.

There are three main types of data classification that are considered industry standards:

  • Context-based classification inspects and interprets files looking for sensitive information
  • Content-based classification looks at application, location, or creator among other variables as indirect indicators of sensitive information
  • User-based classification depends on a manual, end-user selection of each document. User-based classification relies on user knowledge and discretion at creation, edit, review, or dissemination to flag sensitive documents.

Content-, context-, and user-based approaches can be both right or wrong depending on the business need and data type.

An Example of Data Classification

An organization may classify data as Restricted, Private or Public. In this instance, public data represents the least-sensitive data with the lowest security requirements, while restricted data is in the highest security classification and represents the most sensitive data. This type of data classification is often the starting point for many enterprises, followed by additional identification and tagging procedures that label data based on its relevance to the enterprise, quality, and other classifications. The most successful data classification processes employ follow-up processes and frameworks to keep sensitive data where it belongs.

The Data Classification Process

Data classification can be a complex and cumbersome process. Automated systems can help streamline the process, but an enterprise must determine the categories and criteria that will be used to classify data, understand and define its objectives, outline the roles and responsibilities of employees in maintaining proper data classification protocols, and implement security standards that correspond with data categories and tags. When done correctly, this process will provide employees and third parties involved in the storage, transmission, or retrieval of data with an operational framework.

Policies and procedures should be well-defined, considerate of the security requirements and confidentiality of data types, and straightforward enough that they are easy for employees promoting compliance to interpret. For instance, each category should include information about the types of data included in the classification, security considerations with rules for retrieving, transmitting, and storing data, and potential risks associated with a breach of security policies.

GDPR Data Classification

With the General Data Protection Regulation (GDPR) in effect, data classification is more imperative than ever for companies that store, transfer, or process data pertaining to EU citizens. It is crucial for these companies to classify data so that anything covered by the GDPR is easily identifiable and the appropriate security precautions can be taken.

Additionally, GDPR provides elevated protection for certain categories of personal data. For instance, GDPR explicitly prohibits the processing of data related to racial or ethnic origin, political opinions, and religious or philosophical beliefs. Classifying such data accordingly can significantly reduce the risk of compliance issues.

Steps for Effective Data Classification

  • Understand the Current Setup: Taking a detailed look at the location of current data and all regulations that pertain to your organization is perhaps the best starting point for effectively classifying data. You must know what data you have before you can classify it.
  • Creating a Data Classification Policy: Staying compliant with data protection principles in an organization is nearly impossible without proper policy. Creating a policy should be your top priority.
  • Prioritize and Organize Data: Now that you have a policy and a picture of your current data, it’s time to properly classify the data. Decide on the best way to tag your data based on its sensitivity and privacy.

There are more benefits to data classification than simply making data easier to find. Data classification is necessary to enable modern enterprises to make sense of the vast amounts of data available at any given moment.

Data classification provides a clear picture of all data within an organization’s control and an understanding of where data is stored, how to easily access it, and the best way to protect it from potential security risks. Once implemented, data classification provides an organized framework that facilitates more adequate data protection measures and promotes employee compliance with security policies.

Additional Data Classification Resources

Recommended Resources


  • Why Data Classification is Foundational
  • How to Classify Your Data
  • Selling Data Classification to the Business
  • How to simplify the classification process
  • Why classification is important to your firm's security
  • How automation can expedite data classification

Juliana de Groot

Juliana is a Marketing Operations Specialist at Digital Guardian. Prior to joining DG, she worked at Dell and CarGurus. She graduated Bentley University with a Bachelor of Science in Marketing with a minor in psychology.