Data is one of, if not the most valuable resource in today’s world. Keeping this data safe from hackers or misuse is crucial. Due to the high volume of data that companies capture and retain — and taking into consideration the amount of laws and regulations that have a primary focus to safeguard that data — it’s critical to develop and deploy a robust data retention policy that will improve your business and meet archival regulations imposed by law.
Let’s take a look at what exactly data retention is, how it is composed, and some guidance on how to develop your data retention policy.
Read more: Why Is Risk Management Important?
What Is Data Retention?
Data retention is the clarification of what data needs to be archived or stored, where this data should go, for how long, and who is responsible for categorizing and managing this data. The General Data Protection Regulation, a regulation established by the European Union, states that there is no specific limits for data to be kept in storage, however it is a general principle to only keep data for as long as it is needed.
Data that has completed its retention cycle can be moved to second or third storage as historical data. This is the key to managing and protecting any organization’s stream of data to avoid being a victim of cybercrime, as well as civil or financial penalties resulting from a lack of good data management procedures.
Data retention policies should be consistently scrutinized, ensuring that the data stored is updated, removed, or deleted based on the need for this information. This practice allows the release of storage space to make room for new data, which decreases costs and boosts network speed.
What Are Some Compliance Policies?
Two of the major data regulations are from the General Data Protection Regulation and the California Consumer Privacy Act. These both set strict guidelines for how companies should manage their data. However, they are many more regulatory organizations than those two, and they all have different frameworks based on industry:
- General Data Protection Regulation (GDPR): Organizations can only hold data when necessary. Its removal should occur
once the intended function of the data is complete.
- California Consumer Privacy Act (CCPA): Consumers may request collected personal information, or ask for its deletion.
- Gramm-Leach Bliley Act (GBLA): Privacy notices can be retained forever; other documentation or data can be retained based on risk.
- Family Educational Rights and Privacy Act (FERPA): Student records should only be kept for six years after the student is no longer active.
- Health Insurance Portability and Accountability Act (HIPAA): There are no retention requirements for medical records, but you must keep policies and procedures relating to HIPAA for six years from policy creation.
- Payment Card Industry Data Security Standard (PCI DSS): Data that is no longer needed must be destroyed.
- Equal Employment Opportunity (EEO): Private employers must retain personnel records for 12 months after the employment ends.
- Bank Secretary Act (BSA): Financial records will be retained for five years.
- Fair Labor Standards Act (FLSA): Businesses must retain payroll, sales, and purchase records for three years.
Data Retention Best Practices
To build a robust data retention policy, it is imperative to define the purpose of the policy, the size of the business, the type of data retained, what regulations or statutes need to be complied with, and who will be involved in the policy management. There is no one-size-fits-all solution, but here are a few best practices to carry out when creating a strong data retention policy.
Build a Data Retention Team
Having a clear idea of policy contributors is one of the key steps in creating a policy. You want to include diverse team and allow brainstorming for different types of solutions. Some team members to consider are executives, accounting professionals, the legal team, IT admins, department managers, and others.
Fully understanding the purpose of collected data, as well as the legal regulations that apply to your industry or business should be the immediate action after setting up a data retention team. This is an essential step to follow thoroughly; failing to comply with a regulation may incur legal and financial sanctions. Further, data security is essential to protecting brand reputation.
Define the Data
Not every piece of information collected should be stored, and not all information retained should be stored for the same period of time. Determining what type of data needs to be stored is critical for the efficiency, cost effectiveness, and legal compliance of a retention policy. Generally, the data covered in retention policies includes:
- Supplier and partner data
- Customer records
- Sales, invoice, and billing information
- Employee records
- Emails and other electronic documents
- Digital copies of paper documents
- Financial reports
- Tax and accounting documentation
- Healthcare and patient data
- Any data that plays an important role in the performance of regular business activities
Simplify Your Plan
Drafting a retention policy using straightforward terms and simple language makes it easy for employees and consumers to understand, therefore increasing the adherence to the policy’s procedures. To cover all possible areas of your data retention needs, outline specifically what data will be stored where and for how long.
Data Retention Policy Software
Currently there are many solutions in the market that will assist you in collecting, distributing, and managing data for your business. Some software is equipped with templates that lay out a strong plan that supports compliance, is packed with relevant policies, and has a reduced risk of data loss.
Backup the Data
Backing up data is a way of protecting your business from a compliance point of view, but it also eliminates the risk of losing data in the event of an outage, natural disaster, or unexpected downtime. Consider cloud storage for less sensitive data to be able to access it anytime, anywhere and across multiple devices.
Data Retention Policy Examples
Now that we’ve covered the basics of data retention policy, it’s time for a glance at what these plans look like. Here are some examples of retention policies used by well-known companies:
The importance of a data retention is crucial to understand. Good policy ensures a continuous workflow while staying within compliance boundaries. Having a clear guideline of what information to keep or delete, together with regular revisions of the policy, will definitely determine the performance and flow of information in a business.