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What is Data Retention Policy and How to Create One?

Terry Mann | 8 min read| Published On - January 5, 2024

Data Retention Policy

In this blog, we will uncover the critical importance of data retention policies and gain valuable insights on developing a tailored policy for your business. Navigate the complexities of data governance, compliance, and security to fortify your organization’s information management strategy.

What Is a Data Retention Policy?

A data retention policy determines how data is stored and disposed of in order to minimize security risks and comply with regulations. The policy outlines how data should be formatted, how long it should be kept, and how and where it should be stored. Once the retention period expires, the data can be deleted or moved to secondary storage, ensuring that primary storage remains clean. Organizations cannot afford to retain all data indefinitely and must demonstrate that they selectively retain and delete data based on specific regulatory requirements. Organizations often create their own data retention policies, but they must also ensure that these policies meet or exceed the applicable laws. Each industry may have different retention periods for different types of data, and organizations may use industry-specific data retention policy templates as a guide.

The basic elements of a data retention policy include:

  • Types of Data Collected: Clearly specify the categories and types of data that the organization collects. This could include customer information, employee records, financial data, or any other relevant data sources.
  • Data Storage Procedures: Outline the procedures for storing captured data securely. This includes specifying whether data will be stored on-premises or in the cloud, encryption methods, and access controls to protect sensitive information.
  • Data Format: Define the format in which the data will be stored. This could include file formats, database structures, or any other relevant standards to ensure consistency and ease of retrieval.
  • Retention Periods: Clearly state the duration for which different types of data will be retained. Consider legal requirements, business needs, and industry standards when determining these periods to strike a balance between compliance and operational efficiency.
  • Data Disposal Procedures: Specify secure methods for disposing of data at the end of its retention period. This could include shredding physical documents, secure deletion of electronic files, or other appropriate methods to prevent unauthorized access.
  • Backup and Archiving: Detail the procedures for backing up and archiving data. Define how often backups will be performed, where they will be stored, and the criteria for data that should be archived rather than actively retained.
  • Roles and Responsibilities: Clearly outline the roles and responsibilities of individuals involved in data management. This includes data owners, custodians, and other staff responsible for data security, compliance, and implementation of the retention policy.

What Should a Data Retention Policy Include?

A standard data retention policy outlines the purpose of retaining information, defines the users it applies to, and specifies its scope. The policy will also include various data retention requirements, such as retention schedules, data safeguarding rules, guidelines for data destruction, and rules for breach response. Organizations must discover and classify all personal data. This can include data stored in databases, documents, emails, images and videos. Additionally, consideration should be given to the location of the data subjects, as different locations may have varying requirements, and thus require unique data retention policies. Backup frequency should also be addressed, taking into account the risk of data loss, the need for multiple backups, and the length of time data should be retained based on its type.

How to Create a Data Retention Policy

Creating a data retention policy and schedule is a complex task. It requires thorough research to identify the applicable regulations and policies for each data category and to account for exceptions. It also involves the collaboration of multiple individuals and teams, which may result in various perspectives.

Here’s a step-by-step guide on how to create a robust Data Retention Policy:

1. Identify Data Types and Categories

Begin by categorizing your organization’s data into different types based on its nature, sensitivity, and regulatory implications. This could include customer data, financial records, employee information, and more. Understanding the diversity of your data will lay the foundation for tailoring retention periods and disposal methods.

2. Assess Legal and Regulatory Requirements

Compliance with data protection laws and industry regulations is non-negotiable. Conduct a thorough review of the legal landscape that governs your industry and the regions in which your business operates. This step is crucial for determining the minimum retention periods required for specific types of data and ensuring your policy aligns with these guidelines.

3. Define Retention Periods

Establish clear and concise retention periods for each category of data. This involves determining how long certain types of information need to be retained for operational, legal, or historical reasons. Be mindful of striking a balance – retaining data for too long may expose your organization to unnecessary risks, while disposing of it too soon may lead to non-compliance.

4. Implement Secure Data Destruction Methods

When data reaches the end of its retention period, it must be disposed of securely. Define methods for data destruction, whether through physical destruction of storage media or secure erasure of digital files. Implementing these procedures not only protects sensitive information but also reinforces your commitment to data privacy.

5. Assign Responsibility and Accountability

Clearly define roles and responsibilities for the implementation of the Data Retention Policy. Designate individuals or teams responsible for monitoring data retention periods, initiating disposal processes, and ensuring overall compliance. Accountability is key to the successful execution of any policy.

6. Educate and Train Staff

Your Data Retention Policy is only effective if your team understands and follows it. Provide comprehensive training sessions to educate employees on the importance of data retention, the specific guidelines outlined in the policy, and the consequences of non-compliance. Regular updates and reminders will help reinforce these principles.

Given the multitude of responsibilities employees have, it is important to ensure that your data retention policy is kept as simple as possible. This can be achieved by limiting the number of record categories and retention periods, and establishing an annual event where employees are requested to delete or archive their records. Additionally, effective communication plays a crucial role in ensuring everyone understands their role in the policy and know when and how to dispose of records that have surpassed their retention period. Gathering feedback from those directly impacted by the policy is crucial in order to make necessary improvements and adjustments. Below are some best practices you can follow when creating your data retention policy.

Data Retention Policy Best Practices

Below are some data retention policy best practices that you can use to help develop a tailored policy for your business.

Assemble a team: Identify the stakeholders who should be involved in the policy development process, such as executives, legal personnel, IT administrators, etc. Ensure that each team or individual is fairly represented.

Discover & classify your data: Determine which data needs to be archived and for how long by considering its nature and relevance to current business needs. Customize the classification schema according to your specific needs. Common categories may include tax documents, payroll documents, and sales documents.

Delete ROT data: Avoid holding onto data longer than necessary, as outdated data poses a security risk. Implement a system that can easily identify and delete data that is ROT (Redundant, Obsolete or Trivial).

Determine applicable regulations: Ensure your data retention policies comply with legal and regulatory requirements, such as HIPAA, SOX, and GDPR. Know the specific laws and requirements for each industry and keep data that may be necessary for legal action.

Establish time limits: Assign default time limits for archiving or deleting each data item. In general, permanent retention should be the exception rather than the rule.

Communicate the policy: Inform all relevant employees and teams about the policy and its impact on their roles and responsibilities.

Review and update the policy: Regularly review the policy to accommodate changing needs and circumstances. Make necessary adjustments as required.

Developing an effective data retention policy helps organizations manage and store large amounts of digital information efficiently. It ensures that critical data is backed up frequently, allowing for easy recovery in case of emergencies. Regular retention auditing helps in removing outdated and duplicated files, improving searches and user experience. Smarter data retention policies can also create more storage space by migrating older data to the cloud.

How Lepide Can Help with Your Data Retention Policy

The Lepide Data Security Platform can automatically discover and classify data based on its sensitivity and retention requirements. This helps in enforcing the retention policies more effectively and ensures that proper handling and protection are applied to the data. With the platform’s continuous monitoring capabilities, it can track data access and modifications in real-time. It can detect any unauthorized data changes or deletions, ensuring compliance with your retention policies. Alerts can be generated to notify administrators of any policy violations. Additionally, the platform generates detailed audit reports, which can be used to demonstrate compliance with the relevant data privacy laws. Lepide also simplifies the process of keeping Active Directory clean by deleting, disabling, or moving inactive and obsolete accounts to another organizational unit, without requiring IT staff involvement.

If you’d like to see how the Lepide Data Security Platform can help you create and maintain a data retention policy, schedule a demo with one of our engineers or start your free trial today.

Terry Mann
Terry Mann

Terry is an energetic and versatile Sales Person within the Internet Security sector, developing growth opportunities as well as bringing on net new opportunities.

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