Managing Data with a Data Retention Policy
In this digital age, organizations are producing and collecting vast amounts of data at an unprecedented rate. Considering that more than 328 terabytes of data are created every day from different people and sources (Statista, 2024), ensuring that data is effectively stored, utilized, and disposed of becomes crucial not only for operational efficiency but also for compliance, security, and customer trust. One of the most effective ways to manage data is through a Data Retention Policy (DRP). A well-defined data retention policy (DRP) is a cornerstone of effective data management.
This article outlines how long data should be retained, when it should be deleted, and how to manage data throughout its lifecycle.
Understanding a Data Retention Policy
A data retention policy is a set of guidelines that dictate how long data is stored, where it is stored, as well as when and how it should be deleted or archived. These policies aim to balance the operational needs of an organization with legal and regulatory requirements without compromising business growth. They help to ensure that data is kept for an appropriate duration, minimizing risks associated with over-retention or premature deletion (European Data Protection Supervisor, 2020).
The significance of DRPs is amplified by the General Data Protection Regulation (GDPR) which came into effect in May 2018. The GDPR mandates that personal data should be processed in a manner that ensures appropriate security and storage only as long as necessary (European Union, 2016). Non-compliance with GDPR’s data retention requirements can lead to hefty fines, up to €20 million or 4% of global annual turnover, whichever is higher (GDPR.eu, 2024). Beyond the GDPR, sector-specific laws, such as those governing financial services, health records, and telecommunications, often impose additional retention obligations (EDPS, 2020).
Key Elements of an Effective Data Retention Policy
1. Purpose Definition
A robust DRP begins with a clear articulation of the purpose of data retention. Each type of data must have a documented reason for its collection and storage duration. For example, customer transaction data may be retained to meet tax audit requirements, while marketing consents might be stored to verify compliance with GDPR (Information Commissioner’s Office, n.d.).
2. Data Categorization
Organizing data into categories, such as financial records, employee data, and customer data, helps define retention periods tailored to specific requirements. Each category may have different legal, operational, or contractual retention needs (EDPS, 2020).
3. Retention Periods
The retention period should align with legal requirements and business needs. For instance:
– Tax records: Retained for 6 years in many European jurisdictions (GDPR.eu, 2024).
– Employee records: Retention periods vary but typically last for 5–10 years post-employment (ICO, n.d.).
– Health records: Retention requirements depend on national laws but often range from 10 to 30 years (EDPS, 2020).
4. Deletion and Archiving Procedures
A DRP should define clear processes for secure deletion or anonymization of data once the retention period expires. For data that must be preserved for historical or legal reasons, organizations should establish archiving protocols to ensure ongoing security (EU, 2016).
5. Legal and Regulatory Compliance
Keeping track of the various national laws in Europe, in addition to the GDPR, is critical for compliance. For example, Germany’s Federal Data Protection Act (BDSG) and France’s Data Protection Act (Loi Informatique et Libertés) may impose additional rules (EDPS, 2020).
6. Monitoring and Review
Regular reviews ensure the policy remains up-to-date with evolving regulations, business operations, and technological advancements. This includes auditing data storage systems to confirm adherence to the DRP (ICO, n.d.).
Benefits of a Data Retention Policy
A well-crafted data retention policy serves several purposes:
1. Legal Compliance: Many industries are governed by regulations that dictate how long data should be kept. For example, healthcare providers in the U.S. are required by HIPAA to retain patient records for at least six years, while financial institutions may have specific retention requirements for transaction data (Alation, 2020; Twilio Segment, 2021).
2. Cost Efficiency: Storing excess or irrelevant data can incur unnecessary costs, especially with cloud storage solutions and on-premises data centers. By implementing a retention policy, organizations can ensure that only valuable data is kept, thereby, optimizing storage resources (Congruity 360, 2024).
3. Risk Reduction: Over-retention of data increases the risk of exposure in case of a data breach. Limiting the storage of sensitive data minimizes this risk. Proper disposal of outdated data also ensures compliance with security standards and reduces the chance of breaches (Alation, 2020).
4. Operational Efficiency: Data retention policies streamline how data is handled across the organization. By setting clear guidelines for data storage, retrieval, and deletion, organizations can ensure their data management systems are efficient and effective.
5. Building Customer Trust: Customers are becoming more concerned about how organizations handle their personal data. By adhering to a clear and transparent data retention policy, businesses show that they respect privacy and are committed to safeguarding personal information. 6. Data Accessibility: Organized data storage and archival systems improves the accessibility of relevant data while decreasing request and response time (Gagliardi, 2023).
Steps to Building a Data Retention Policy
1. Identify Organizational Data Needs
The first step to creating a data retention policy is identifying all the data types your organization handles. This includes customer information, financial records, HR data, marketing data, and operational records. Data should be categorized by relevant, sensitivity, and regulatory requirements (Congruity 360, 2024).
2. Understand Legal and Regulatory Requirements
Different countries and industries have specific legal frameworks that govern data retention. In the European Union, the General Data Protection Regulation (GDPR) mandates that personal data should not be kept longer than necessary for its intended purpose (Alation, 2020).
Understanding these regulations is essential to ensure compliance and avoid penalties. Organizations should consult legal experts to interpret how these laws apply to their specific data types.
3. Set Retention Timelines
Once the data has been categorized and legal requirements understood, the next step is to define retention periods. This varies by data type. For example:
– Financial data might need to be stored for six years for tax purposes.
– Employee records may be retained for the duration of employment plus a certain number of years after employment ends, depending on legal requirements (Congruity 360, 2024).
4. Implement Secure Disposal Methods
Data retention doesn’t just involve storage, it also includes secure deletion. For physical records, this may include shredding documents. For electronic records, it involves overwriting files using specialized software to ensure that data cannot be recovered after deletion. Secure data disposal is crucial for avoiding data breaches and meeting regulatory standards (Congruity 360, 2024).
5. Assign Roles and Responsibilities
A successful data retention policy requires clear accountability. Typically, the roles involved include IT staff, compliance officers, and department heads. It’s also important to ensure that employees across the organization understand their role in adhering to the policy. Assigning these roles and responsibilities ensures that everyone is on the same page, leading to better enforcement and compliance with the policy (Twilio Segment, 2021).
6. Train Employees
Implementing a data retention policy is only effective if everyone in the organization is aware of it. Regular training programs should be conducted to ensure employees understand the importance of the policy and how to implement it correctly. This training should cover data handling, retention schedules, and secure disposal methods.
7. Regular Review and Update
The digital landscape and regulatory environment are constantly evolving, therefore, it is essential to regularly review and update the data retention policy. A review schedule should be set, and changes in legal requirements or business practices should prompt an immediate review of the policy (Congruity 360, 2024). Regular audits also help identify potential gaps or inefficiencies in data management processes.
Challenges of Implementing a Data Retention Policy
1. Complex Regulatory Environment: Navigating complex legal and regulatory requirements can be challenging, especially for organizations operating internationally. Consulting with legal experts and using compliance management tools can help streamline the process and ensure all requirements are met (Alation, 2020).
2. Resistance to Change: Implementing a new policy can face resistance, particularly in organizations with entrenched data management practices. Employees may be reluctant to change how they handle and store data. To overcome this, organizations must communicate the benefits of the policy clearly, including how it will simplify their daily tasks and reduce risks (Twilio Segment, 2021).
3. Data Proliferation: The exponential growth of digital data makes categorization and management increasingly difficult. Unstructured data, such as emails and instant messages, often poses significant challenges (ICO, n.d.).
4. Balancing Retention with Data Minimization: While the GDPR emphasizes data minimization, operational needs sometimes require longer retention periods. Organizations must strike a careful balance to avoid over-retention without jeopardizing business continuity (EU, 2016).
Conclusion
Implementing an effective data retention policy is essential for organizations in the modern digital landscape. Not only does it ensure compliance with regulations, it also helps improve operational efficiency, reduce costs, and mitigate security risks. Organizations must assess their data management needs, develop retention schedules, and regularly review their policies to remain agile in a fast-changing environment.
With Telliswall’s professional services, you can schedule regular backups and set retention points that align with your organization’s policies and compliance requirements. You can define retention periods, set up automated backup schedules, and apply custom policies to specific user groups or data types, this ensures that your data is always protected and recoverable, even in the event of data loss. You also build customer trust, and prepare for future challenges in the data management domain.
References
Alation (2020). How to Create an Effective Data Retention Policy. https://www.alation.com
Alcion (2024). Data Retention Policy: Strategic Data Management for Compliance and Efficiency. https://www.alcion.ai/glossary/data-retention-policy
Congruity 360 (2024). Building a Data Retention Policy. https://www.congruity360.com
European Data Protection Supervisor (EDPS) (2020). Data Protection by Design and by Default. https://edps.europa.eu
European Union (EU). (2016). General Data Protection Regulation (GDPR). Official Journal of the European Union.
Gagliardi, T. (2023). What is a Data Retention Policy? Best Practices + Template https://drata.com/blog/data-retention-policy
GDPR.eu. (2024). Understanding GDPR Compliance. https://gdpr.eu
Information Commissioner’s Office (ICO). (n.d.). Guide to Data Protection. https://ico.org.uk
Statista (2024). Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2023, with forecasts from 2024 to 2028 https://www.statista.com/statistics/871513/worldwide-data-created/
Twilio Segment (2021). What is Data Retention? How to Create a Policy that ProtectsPrivacy. https://segment.com/blog/data-retention/