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What Is Data Classification? [4 Common Types]

by Bob Ertl updated October 28, 2022 Secure File Transfer

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What is data classification? Data classification is organizing data into different categories to help make this data easier to manage, protect, and use.

What Is Data Classification?

Data classification renders data off-limits to unauthorized viewers or readers to minimize sharing that data for personal, business, or government purposes. This data typically includes business secrets, national secrets, or identifiable information that could harm individuals working with an organization or serving as a customer or constituent of that organization.

In terms of classification (and in many forms of data privacy), the emphasis is on the “CIA Triad” of data protection:

Confidentiality: Maintaining the privacy of information by preventing unauthorized viewing of that information.
Integrity: Maintaining the integrity of the data by providing controls that assure that data is unaltered and uncorrupted.
Availability: Maintaining accessibility of data for authorized users such that other controls do not interfere with those users being able to utilize that information.

Ensuing from these Triad elements, classification only exists within a specific set of controls, practices, and processes that ensure authorized individuals only view that classified information.

These controls often fall under specific categories:

Security and Compliance: Any organization working with sensitive data most likely falls under specific regulations that cover technical security frameworks. Even private industries include frameworks that cover security and handling requirements for classified data.
Governance: To maintain confidentiality, integrity, and accessibility, organizations must have a governance policy in place that dictates how data should be managed, in what systems, and the policies and procedures that protect that data and those systems on a day-to-day basis.
Usability: Accessibility requires authorized people to view and use data as part of their work. Accordingly, usability controls ensure these people can do so without compromising that information.

Thus, using the word “classification” in terms of data can refer to both the proper nomenclature for government classification and the broader meaning of organization data through labels to help protect it.

Data Classification Types

Discussing data classification can span several contexts covering dozens of control and requirements applications.

Generally speaking, there are three overarching types of classification:

Data-based: This classification works through the type of information that needs protection. Files are investigated to determine if they contain any specific protected information, such as personally identifiable information (PII) or financial information related to individuals or an organization.
Context-based: This classification approach considers the use of the information in question, who created it, where it was created, and meta-variables to indicate that something should be classified as sensitive.
User-based: Individuals make specific determinations about classification on a document-by-document basis.

These different approaches play out across many contexts, overlapping even in the same industry.

Public Classification

Public classification is generally the most permissive. It may include sensitive information, so long as it is broadly available to the public through some other mechanism. As such, this form of data typically doesn’t have the same security controls as other forms.

Such data can include:

Organizational Charts
First and Last Names
Press Releases
White Papers
Architectural Guides

Internal Classification

Internal classification is mainly associated with business and enterprise secrets, representing trade information that, upon release, could hinder the intellectual property or competitiveness of that company.

Examples of such data include:

Product Schematics
Internal Emails
Intranet Platforms
Budgets and Financial Projections

Government Classification

Government classification is what we often think about when we think about “classified information.” With the increasing growth of the digital supply chain for federal agencies (cloud platforms, applications, etc.), technology providers’ classification is a critical question.

This category can cover several different types of data protections, including:

Secret Classification: The government classifies sensitive national secrets as “Confidential,” “Secret,” or “Top Secret,” denoting escalating levels of protection and restrictions. Top secret documents are only viewable by a select few.
Alongside these levels, you’ll often see more flexible classification denotations. For example, a document labeled “Top Secret” may also have more specific accessibility protections for information on a need-to-know basis. This approach prevents accidental exposure of the most sensitive secrets.

Access to classified material in this category usually relies on very specific authorization, and such information is located on highly private networks such as the Secret IP Router Network (SIPRNET).
Controlled Unclassified Information (CUI): When contractors work with defense agencies, they may generate information that, while not classified, should remain private for the protection of the participating agencies and businesses. CUI is a special form of this data—data that’s important enough to have an entire compliance framework dedicated to it (Cybersecurity Maturity Model Certification [CMMC]) managed by the National Institute of Standards and Technology (NIST) and the Department of Defense.
CUI can be stored in more traditional networks, but those networks require stringent security controls.

Confidential Classification

In the private sector, “classifying” data is less about designating important secrets and more about identifying information for protection based on its sensitivity. This kind of sensitivity can include protecting business secrets, or more importantly, protecting the information of customers and patients that they serve. This requires a cybersecurity risk management strategy.

Some of the sensitive classifications of private data include:

Personally Identifiable Information (PII): PII is a baseline for data protection in almost every regulation on the market. PII includes Social Security numbers (SSNs), addresses, phone numbers, financial information, or anything else that can be used to identify an individual and piece together sensitive information (how to contact them, where they live, etc.).
Almost every compliance standard, public and private, protects PII in some capacity.
Protected Health Information (PHI): PHI is a specific form of information, outlined in Health Insurance Portability and Accountability Act (HIPAA) regulations, related to patient care. Information handled by hospitals, doctors, and insurance companies, such as medical records, doctors’ notes, or any payment information related to healthcare provisions, is considered PHI. The same is true for any organization’s HR—or other departments for that matter—that handles PHI.
Primary Account Number (PAN): PAN refers to cardholder information, including account numbers, chip or magnetic stripe information, or related CVV numbers.

In the context of private business, it’s critical to classify data and data-storage systems based on the type of information and the industry you serve.

What Are the Challenges and Best Practices of Protecting Classified Data?

It might seem extremely easy to track data and different classifications, which is true in many cases. Modern technology doesn’t lend itself to a walled garden approach where you can simply cordon off the outside world. When that information must be usable and available to multiple people, and when an organization uses advanced infrastructure like online apps and the cloud, it must understand the best data classification and protection practices.

Some of these challenges and best practices include:

Vulnerability: Sensitive data can be exposed in myriad ways, which can prove confusing for complex systems. In addition, how classification impacts your regulatory compliance requirements will also change.
Maintaining critical governance policies, including an inventory of sensitive systems and data flows, is crucial in maintaining the security that befits different types of classification.
Expertise: Managing classification and security is a full-time job and one that people train for years to do well. Many larger companies, especially those dealing with sensitive data regularly, have dedicated compliance and classification managers to ensure that company policy and infrastructure meet requirements.
Organizations should not skimp on expertise. If you don’t have the time or resources to maintain in-house compliance and security officers, work with third-party security firms specializing in your particular industry.
Enforcement: A policy is only good as it’s implemented, and the best governance approach is meaningless without people and technology to ensure it’s working.
Use technologies that support compliant operations and secure data storage and transmissions. Also, utilize tools with proper automation and audit logging to ensure that you’re meeting requirements and can trace issues back to their source.

Maintain Security on Classified Information With Kiteworks

Compliance and security are the cornerstones of handling classified data. That means maintaining the right technology throughout your organization, from storage to processing and transmission, that keeps data of any classification secured and confidential.

The Kiteworks Private Content Network supports many compliance frameworks, focusing on data privacy without sacrificing how your organization uses and shares that information. The Kiteworks Private Content Network integrates end-to-end encryption capabilities across your most common business applications, like email, secure file transfer, managed file transfer, application programming interfaces (APIs), and web forms.

Kiteworks includes the following features:

Security and Compliance: Kiteworks utilizes AES-256 encryption for data at rest and TLS 1.2+ for data in transit. The platform’s hardened virtual appliance, granular controls, authentication, other security stack integrations, and comprehensive logging and audit reporting enable organizations to easily and quickly demonstrate compliance with security standards.
The Kiteworks platform has out-of-the-box compliance reporting for industry and government regulations and standards, such as HIPAA, Payment Card Industry Data Security Standard (PCI DSS), SOC 2, and General Data Protection Regulation (GDPR).

In addition, Kiteworks touts certification and compliance with various standards that include, but are not limited to, FedRAMP, FIPS (Federal Information Processing Standards), and FISMA (Federal Information Security Management Act).

Likewise, Kiteworks is assessed to IRAP (Information Security Registered Assessors Program) PROTECTED level controls. Additionally, based on a recent assessment, Kiteworks achieves compliance with nearly 89% of CMMC Level 2 practices.

Audit Logging: Using Kiteworks’ immutable audit logs, organizations can trust that attacks are detected sooner and maintain the correct chain of evidence to perform forensics.
Since the system merges and standardizes entries from all the components, Kiteworks’ unified syslog and alerts save security operations center teams crucial time while helping compliance teams to prepare for audits.

SIEM Integration: Kiteworks supports integration with major security information and event management (SIEM) solutions, including IBM QRadar, ArcSight, FireEye Helix, LogRhythm, and others. It also has the Splunk Forwarder and includes a Splunk App.

Visibility and Management: The CISO Dashboard in Kiteworks gives organizations an overview of their information: where it is, who is accessing it, how it is being used, and if data being sent, shared, or transferred complies with regulations and standards. The CISO Dashboard enables business leaders to make informed decisions while providing a detailed view of compliance.

Single-tenant Cloud Environment: File sharing, automated file transfers, file storage, and user access occur on a dedicated Kiteworks instance, deployed on-premises, on an organization’s Infrastructure-as-a-Service (IaaS) resources, or hosted as a private single-tenant instance by Kiteworks in the cloud by the Kiteworks Cloud server. This means no shared runtime, shared databases or repositories, shared resources, or potential for cross-cloud breaches or attacks.

Take a look at the Kiteworks Private Content Network and how it enables data privacy and compliance for your sensitive content communications by scheduling a custom-tailored demo today.

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