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Data Security: Risks, Policies, Best Practices and Compliance

Data security is the process of protecting organizational data throughout its lifecycle and preventing risks like unauthorized access, public exposure, destruction, illicit modification, or theft. These risks can be caused by external cyber attackers, malicious insiders, natural disasters, accidental damage, and human error.

Data security covers technical aspects such as hardware, software, storage systems, and end-user equipment, as well as organizational aspects such as user access, administrative controls, and data management policies.

Data security uses tools and technologies to increase visibility into company data and its use across the enterprise. These tools protect data through processes such as data masking, encryption, and anonymization of sensitive information. This process also helps organizations simplify audit procedures and comply with data protection regulations.

In this article:

Why Is Data Security Important?

Data breaches can have catastrophic consequences for a business, which may include direct financial loss, reputational damage, compliance violations, and legal exposure. Research shows the average cost of a data breach in the US is over $4 million.

The most serious impact a security breach can have on a company is financial loss. But it also destroys brand equity and customer trust. For large enterprises, the impact can be in the billions of dollars. When a serious data breach occurs, many consumers and partners will end their relationship with a brand.

For these reasons, having strong policies and security controls in place to safeguard sensitive data is critical to business continuity and success.

Data Security vs. Data Privacy

Data security refers to the precautions taken by an organization to prevent unauthorized access, usage, disclosure, disruption, alteration, or destruction of its digital assets. This involves implementing various technologies such as firewalls, antivirus software, and intrusion detection systems (IDS). It also includes developing policies and procedures for managing access control, encryption standards, and incident response plans.

Data privacy, on the other hand, concentrates on ensuring that personal information is collected, stored, and processed in a manner that respects individual rights while adhering to relevant laws and regulations like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). This covers aspects such as:

  • Obtaining consent from users before gathering their data
  • Limiting data collection to specific purposes only
  • Anonymizing personal information when possible
  • Granting individuals access to their records
  • Offering mechanisms for rectifying inaccuracies in personal data
  • Informing affected parties about breaches involving sensitive information.

Top Data Security Threats

Social Engineering Attacks

Social engineering attacks are a major vector used by maliciou actors to gain access to sensitive data. They involve manipulating or tricking individuals into providing personal information or allowing access to privileged accounts.

Phishing is a common social engineering technique. In a phishing attack, threat actors send messages that appear to come from trusted sources, but are in fact malicious. For example, the attacker could send an email that appears to come from the victim’s bank, encouraging them to change their password. When the victim clicks the link, they are taken to a fake login screen, which delivers their credentials to the attacker.

Security Misconfiguration

Security configuration errors occur when security settings are not correctly defined, or systems are set up with their default security configuration, which is typically not secure. There are several industry security standards that define what security configurations should look like (for example, CIS benchmarksa and the OWASP Top 10). If configurations do not meet these standards, they can represent a severe business risk.

Misconfiguration often occurs when an administrator, developer, or database owner fails to properly configure security for a website, application, database, or server, leaving a door open for attackers. Misconfiguration can lead to large-scale data breaches. Misconfiguration exploits can have consequences like business disruption, reputational damage, legal exposure, and regulatory fines.

Shadow IT

Shadow IT is the unauthorized use of third-party applications, software, or Internet services in a workplace. The reason Shadow IT is so popular is because employees often prefer applications or technologies that are more efficient and convenient than company-approved alternatives.

The problem with shadow IT is that an organization is are unaware it is happening, and shadow IT systems create a blind spot in their cybersecurity strategy. These third-party services often have weak security measures, or may not have the appropriate security configuration. This can lead to data breaches, compliance violations, and legal liability, because companies are held accountable for sensitive data stored by their employees in unauthorized locations.

If shadow IT is prevalent, it might indicate that a company does not provide its employees the most suitable tools for their job. Organizations need to have open conversations with their employees, understand their technical needs, and make their best effort to meet them.

Another solution is data loss prevention (DLP) tools, which can automatically stop employees from uploading or sending sensitive information, and can help monitor data flows to provide visibility over shadow IT within an organization.

Ransomware Attacks

In a ransomware attack, threat actors infect an organization’s systems with malware to encrypt all data. Users are unable to access the data and are asked to pay a ransom to regain access through a virtual currency like Bitcoin. Ransomware can spread via malicious email attachments, infected external storage devices, software applications, and compromised websites.

Backing up sensitive data is a crucial countermeasure against ransomware. However, some types of ransomware can infect backups as well. This makes it important to store a backup offline or in a separate site that cannot be infected by ransomware targeting the primary data center.

Advanced Persistent Threat Attacks

An Advanced Persistent Threat (APT) is a targeted cyberattack, in which a group of sophisticated threat actors penetrate a network and dwell in it. APT attackers can remain in a network, undetected, for months or even years. Typically, their goal is to monitor network activity, identify sensitive data, and steal it or use techniques like ransomware to extort the organization. Cybercriminals often execute APT attacks to target a high-value target, such as a large corporation or country, to steal data and cause major damage over time.

Learn more about these and additional threats in our guide to data security threats (coming soon)

Data Security Regulations

Protecting sensitive data is becoming a major focus for governments and regulatory authorities, and numerous regulations have been established to ensure organizations maintain high standards of security. Compliance with these regulations is especially important for businesses handling personal or financial data, as non-compliance can lead to severe penalties.

Common regulations that affect data security include:

  • General Data Protection Regulation (GDPR): The GDPR is an extensive privacy regulation enacted by the European Union (EU), which dictates how companies collect, process, store, and share personal data of EU citizens.
  • California Consumer Privacy Act (CCPA): The CCPA grants specific rights to California residents regarding their personal information and mandates businesses operating within the state to disclose their practices related to collecting, using, and sharing such information.
  • Health Insurance Portability and Accountability Act (HIPAA): HIPAA is a US federal law that establishes standards for safeguarding sensitive patient health information held by healthcare providers, insurance companies, and other covered entities.
  • Sarbanes-Oxley (SOX) Act: Enacted in response to corporate accounting scandals, this US legislation imposes strict requirements on publicly traded companies concerning financial reporting processes and internal controls over financial systems.
  • Payment Card Industry Data Security Standard (PCI DSS): PCI DSS is a set of security standards aimed at ensuring all companies processing, storing, or transmitting credit card information maintain a secure environment.
  • International Standards Organization (ISO) 27001: ISO 27001 is a globally recognized standard for managing information security risks and implementing effective controls within organizations.

Complying with these regulations not only helps businesses avoid penalties but also fosters trust with customers by showcasing their commitment to data protection and privacy.

Data Security in the Cloud

Data security in cloud computing involves combining technologies, procedures, and policies to protect cloud systems, applications, and data.

Data security is essential at all stages of the cloud computing process and data lifecycle, including development, deployment, migration, and management. Cloud environments pose various data security risks that your security strategy must address. The main risk is a data breach or attack.

Cloud computing introduces new threats in addition to those affecting on-premise infrastructure. Common data threats in the cloud include:

  • Insecure APIs—cloud applications and services usually depend on API functionalities, exposing them to API vulnerabilities.
  • Account takeover—attackers can exploit weak or compromised credentials to hijack user accounts in the cloud.
  • Insider threats—in the cloud, it’s harder to track malicious insiders.


Another major issue with cloud environments is the lack of clarity about who is responsible for security. On-prem security is the organization’s sole responsibility, but in the cloud, you share security responsibilities with the vendor. Navigating shared security controls can be tricky, and the shared responsibility differs between cloud models.

The cloud provider is always responsible for securing the physical infrastructure, and the customer is always responsible for securing its data. Other security aspects can be a source of confusion. In short, you must understand the specifics of your cloud vendor’s shared responsibility security model and ensure you implement the right measures.

Related content: Read our guide to data security in cloud computing (coming soon)

Data Security Policies

Data security policies outline how an organization must handle sensitive data such as customer and employee information and IP. Your data security policy should cover two main categories: policies applied to people and technologies.

Common policies governing behavior of people in the organization:

  • Acceptable data use—an acceptable use policy should appear when users first log into the corporate network. It defines normal and unacceptable behaviors, including restrictions on using corporate resources and data for outside activities.
  • Email—the policy must specify rules for email-based communications, including encryption requirements and anti-phishing measures.
  • Reporting—the policy should outline security incident reporting procedures, specifying who is responsible for handling data breaches and how.
  • Auditing—the policy should specify the required audit control level and explain how auditing activities can help ensure regulatory compliance.

Common policies governing the use of technology in the organization:

  • System security—this involves physical and digital security measures to protect systems, servers, and other assets. The policy may include backup, configuration, and restoration requirements.
  • Mobile device management—widespread use of mobile devices presents a security challenge that data security policies must address. For example, you might implement network segmentation to insulate the company intranet from employee devices.
  • Data encryption—this is essential to protect data at rest and in transit, ensuring that outsiders cannot read leaked or stolen data. The policy may classify data, stipulating different encryption levels for each data type.
  • Software management—the policy should outline how the organization maintains inventory, manages software licenses, and applies patches when needed. These processes usually involve automated tools and scanners.
  • Backup and recovery—this involves protecting backups with physical and digital security measures, including periodic tests to ensure successful data recovery. You might build a dedicated recovery environment.


Related content: Read our guide to data security best practices

Data Security Solutions and Technologies

A data security program typically covers a set of protective technologies and mechanisms. It can include various sophisticated data security techniques to protect critical IT assets. However, effective data security requires implementing these mechanisms as part of a holistic data protection program.

Here are notable technologies you can add to your data security stack:

Data discovery and classification

A data discovery solution scans data repositories and generates reports on findings to help you avoid storing sensitive data in an unsecured location that can expose it to threats. Data classification involves labeling sensitive data with tags to help prioritize data protection according to the data’s value and the relevant regulatory requirements.

Data encryption

This mechanism encodes data to make it unreadable and useless for unauthorized parties. You can use a software-based data encryption solution to protect data before writing it to a solid-state drive (SSD).

Alternatively, you can use hardware-based encryption. It involves using a separate processor to encrypt and decrypt sensitive data on portable devices, like USB drives and laptops.

Dynamic data masking (DDM)

You can use this data security technique to implement real-time masking for sensitive data. It can help preserve the original data while preventing exposure to non-privileged users.

User and entity behavior analytics (UEBA)

This technology can identify abnormal activity that might indicate a real threat. You can employ UEBA to detect insider threats and compromised accounts.

Change management and auditing

A change management and auditing procedure can help spot misconfigurations quickly. These mechanisms are critical to preventing accidental or malicious changes to IT systems that might lead to breaches or downtime.

Identity and access management (IAM)

This technology can help you manage regular and privileged user accounts. It provides capabilities that enable you to control user access to digital assets, including critical information.

Backup and recovery

Organizations must have a mechanism in place for promptly restoring data and operations—a disaster recovery plan that includes clear steps for retrieving lost data as well as managing incident response. It should work for relatively benign scenarios, for example, when a user accidentally deletes a file they urgently need.

In addition to benign scenarios, the plan should also set up measures for critical events with severe impacts. Critical disaster events include server failures, natural disasters, and targeted attacks that can bring down an entire network.

Related content: Read our guide to data security solutions (coming soon)

Data Security Best Practices and Strategies

Identify and Classify Sensitive Data

To effectively protect your data, you need to know what data you have and its level of sensitivity. First, ask the security team to scan all data stores and report the results. You can later categorize the data according to its value to the organization.

Classifications should be updated immediately when data is created, processed, modified, or submitted. It is also helpful to have a strategy to prevent users from changing the classification level. For example, only authorized users should have permission to upgrade or downgrade data classifications.

Set an Information Security Policy to Protect Your Data

Data can be in a structured or unstructured form and reside in your database, cloud storage bucket, file system, and so on. Most organizations store large amounts of data, which means some data might be forgotten or ignored. Protecting your organization from data breaches requires protecting everything from the largest database to an individual file via the same overarching security policy.

This requires a single cybersecurity policy for all data, no matter where it resides. You must be able to enforce this policy across all datasets in the organization, receive alerts about violations, and respond to them.

Deploy An Identity And Access Management Solution

Unauthorized access is a critical threat to sensitive data. Attackers are constantly finding new methods to access sensitive data, and an identity and access management (IAM) solution can help.

Look for an IAM solution with the ability to define least-privilege access policies and enforce all access rules. The IAM policies should relate to role-based permissions. Additionally, you can use multi-factor authentication (MFA) to reduce the risk of unauthorized access to sensitive data, even if a malicious attacker compromises user credentials.

Modern IAM solutions can support hybrid environments, including private data center and public cloud deployments. This simplifies end-user authentication and makes it easier to enforce policies consistently across your IT environments.

Implement Employee Security Training

Having security guidelines is not enough—companies should train all employees to explain the policies, teach them how to manage sensitive information, and provide instructions on how to respond to suspicious events and activities.

Employees should also be trained in data security best practices with respect to both internal and external attacks. Employees should be instructed to lock sensitive information while away from their computer, avoid clicking on links from untrusted sources, set strong, unique passwords, and be aware of the least privilege principle (for example, letting security teams know if someone on a team has too many permissions, or if an old account has not been revoked).

Related content: Read our guide to data security best practices (coming soon)

Data Protection with Cloudian

Data protection requires powerful storage technology. Cloudian’s storage appliances are easy to deploy and use, let you store Petabyte-scale data and access it instantly. Cloudian supports high-speed backup and restore with parallel data transfer (18TB per hour writes with 16 nodes).

Cloudian provides durability and availability for your data. HyperStore can backup and archive your data, providing you with highly available versions to restore in times of need.

In HyperStore, storage occurs behind the firewall, you can configure geo boundaries for data access, and define policies for data sync between user devices. HyperStore gives you the power of cloud-based file sharing in an on-premise device, and the control to protect your data in any cloud environment.

Learn more about data protection with Cloudian.

Data Security with Cloudian

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