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How To Handle Your Company’s Sensitive Data

Businesses allocate a substantial amount of their budget for data security, and for many companies, the amount is increasing every year. Companies are attractive targets for hackers because they store sensitive data like personal and financial information about clients, employees, suppliers, and human resources systems. Sensitive details like that can unfortunately be used for all kinds of fraud and identity theft, among other illegal purposes.

Damages from sensitive data loss can be devastating for companies. It can harm their reputation, destroy customer trust, and lead to financial and legal consequences. Therefore, businesses need to stay alert and make sure their data is secure. In this article, you will learn about sensitive data within a company and how best to protect it.

What Is Sensitive Data?

Sensitive data is all of the personal, financial, or business information about a company’s customers, employees, or business partners that needs protection against unauthorized access.

  • Personal data: Personal data can mean customer information like a user’s address, phone number, or birthdate, or more delicate information like health records.
  • Financial data: Financial data can include credit card and bank information, ID cards, and Social Security numbers.

Personal and financial data are also known as personally identifiable information (PII). If put together, they can be used to impersonate a user to commit fraud or identity theft.

  • Business data: Businesses hold various types of information that could cause them damage if stolen or released. Sensitive business data includes trade-specific secrets, intellectual property, financial and accounting information, and supplier confidential information.

It has become a top priority for most organizations to protect their sensitive data, but this isn’t an easy task. It can be difficult to locate the data or to know how users are interacting with or sharing it. Especially during the pandemic, as more employees work from home, businesses must deploy remote networks and systems to handle increased security vulnerabilities. In any case, it’s an organization’s responsibility to protect all sensitive data it possesses either with legally binding documents or by following data protection regulations.

Regulations on Sensitive Data

To ensure that sensitive data protection is reliable and thorough for businesses and people alike, regulations define how organizations collect PII and how they’re allowed to use it. Below are some of the most important regulations:

General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) changes the way companies and organizations collect, process, and manage personal data. The GDPR determines when and how personal data may be used, stored, deleted, transferred, and processed, as well as how to protect it. The GDPR applies to organizations and companies in Europe and every company that trades on the territory of the European Union. The rules are complicated, and the fines for violations are strict.

The GDPR’s definition of personal data encompasses any information that directly or indirectly identifies a person and can lead to identity theft. This can include names, emails, IP addresses, phone numbers, and location data. The law also specifies more sensitive information that businesses must treat with extreme care, such as racial origin, political views, religious beliefs, biometric data, and sexual orientation.

The general rule is that processing the above data is prohibited. However, there are some exceptions under which a company or organization may process sensitive personal information when, for example, a user has given explicit consent, or when a law allows the processing of this data for public interest purposes.

With the GDPR, organizations must inform users beforehand what information is collected and how it will be used. Users can reject this when the data is intended for “profiling” or direct marketing purposes, and they can demand the correction of false or incomplete information. They can also request the deletion of the data.

California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act (CCPA) is a data privacy law designed to protect California consumers’ rights. As of January 1, 2020, businesses are obligated to inform consumers how they handle their data.

The CCPA and the GDPR have similar definitions of personal information. According to the CCPA, any information that can lead to the direct or indirect identification of a specific consumer or household is considered personal. In contrast to the GDPR, the CCPA doesn’t include a sensitive personal information category. This will change on January 1, 2023, when the California Privacy Rights Act (CPRA), the follow-up to the CCPA, will go into effect. As of now, there’s no distinction between personal information and sensitive personal information.

According to the CCPA, PII can include data that directly identifies an individual, like name, email address, image, Social Security number, or passport number.

The act also protects less obvious data. For example, data from online activities like your search and browsing history, purchase history, cookies, or other tracking techniques are considered personal because they can be linked to specific individuals. Similarly, biometric and geolocation data as well as characteristics like race, religion, age, or sexual orientation and any information that isn’t de-identified is considered personal under the CCPA, and businesses are obligated to protect it.

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) is a US law designed to set privacy standards for protecting medical records and other patient information provided to doctors, hospitals, health care providers, and all their business associates.

HIPAA includes a number of technical and organizational measures to safeguard protected health information (PHI) and signals the obligation of health care providers to establish and comply with strict data security protocols when handling this data.

Personal data according to HIPAA includes names, addresses, medical record numbers, license plates, account numbers, biometric identifiers, and health plan beneficiary numbers.

HIPAA differs from other regulations because it doesn’t require a patient’s consent to use their data. Health providers are free to process this information as long as it’s handled in compliance with appropriate security measures. HIPAA also doesn’t provide the option of deleting personal data. This means that if patients request the deletion of their data, the health provider isn’t obligated to do so. HIPAA also allows providers to disclose a “limited data set” to a marketing company without patient consent, as long as it doesn’t identify an individual directly.

Payment Card Industry Data Security Standard (PCI DSS)

Payment Card Industry Data Security Standard (PCI DSS) is a set of standards, policies, procedures, and tools designed to protect a cardholder’s data.

PCI standards are developed and maintained by the PCI Security Standards Council (SSC). There are twelve basic requirements grouped into six categories. They aim to create a secure global payment environment that protects businesses and consumers from security breaches and card data theft.

Application of PCI DSS is mandatory for every organization that stores, processes, or distributes card information. This includes financial institutions, point-of-sale (POS) payment providers, and businesses of any size.

According to the PCI standard, sensitive personal data includes the name of the cardholder, the card number, and the expiration date. It also includes authentication data like the card verification value (CVV) code, personal identification number (PIN), and information stored on a magnetic stripe or chip.

PCI DSS compliance requires continuous effort due to evolving threats. You should be aware of any updates or modifications.

How to Manage Sensitive Data

Data privacy regulations are helpful guidelines for businesses, but they’re only part of an overall data security strategy. Following are measures you should implement to protect sensitive data more effectively.

Data Masking

Data masking is a great method to protect sensitive data. It obscures data in a way that makes it practically useless to unauthorized users while offering a realistic version of the data that can be used for training, software testing, or other purposes.

Data masking is categorized into static data masking (SDM) and dynamic data masking (DDM). SDM stores the real data in the production database unaltered and the mass data in a separate database. DDM maintains only the production database, but when proper access control is implemented, it can only be accessed by authorized users. When other environments (such as testing) request data, DDM masks it in real time before returning the mass data version.

Data masking is a powerful security tool that has been mandated by all the major regulations mentioned earlier. It’s inexpensive and easy to implement. A good practice is to peer review the data to make sure everything is masked and that no production data is used in any non-production environments. You can also implement multiple masking techniques to make the output more meaningful based on the context.

Controlling Access

Access control, considered a best practice by all major regulations, allows you to determine who has access and where. For example, users have access only to the data they need and nothing more. Only authenticated and authorized users can access data. Keeping track of all devices connected to your systems is essential. Pay special attention to external devices owned by your employees, such as laptops or mobile phones. Employees who work remotely are likely to use their own devices, which increases the security risk. You might want to reevaluate your permissions. Permission hierarchy can provide a significant increase in security. Also, educating and training employees regularly about basic security practices is one of the most effective defense strategies against cyberattacks. Most breaches are caused by ill-trained employees. Employees should know to stay away from unsecured networks and websites. Educate them to be aware of social engineering threats and never share sensitive information or passwords via social media. An educated employee is the first defensive measure against cyberattacks. This gives them the confidence to avoid potential incidents and report them if they occur.

Encrypting in Flight and at Rest

Data in flight is data traveling over the web or a private network; for example, when you submit a form or upload files to the cloud. Data at rest is data kept on any kind of storage, such as the cloud, hard drives, or flash drives. Data faces security threats in both states, and encryption is one of the most effective ways of mitigating those threats. To protect data in flight, you should encrypt it before it’s transmitted. You can achieve this by using encrypted connections like SSL/TLS and HTTPS that use both symmetric and asymmetric encryption techniques. Next authenticate the endpoints, then finally decrypt and verify the data once it reaches its target. You can also use a virtual private network (VPN) service. A VPN encrypts traffic that isn’t decrypted until it arrives at its destination. To protect sensitive data at rest, you can implement an encryption solution that will allow only verified users with encryption keys to access it. Even if information is compromised, it is unreadable and therefore has no value to the attacker. Application-level encryption is also one of the best options for protecting sensitive data. At this level, data is secure regardless of its location, whether it’s stored on external devices, databases, applications, or in transit over a network.

Securing Your Network

There are several ways to secure your network and prevent data breaches, such as installing a firewall or using a VPN. Frequently updating your security software, operating system, and web browser will protect them against most malware types and hackers.

Having antivirus software installed on all devices can provide an extra layer of protection. There are many software options to choose from based on budget and infrastructure. Keep your antivirus software up to date, install updates as soon as they become available, and make sure that your computers, devices, and systems are all current.

Backing Up Data

Systematically backing up the data on all your devices is another efficient countermeasure to data loss. Back up your data regularly and store at least one security copy on-site, in the cloud, or preferably both. Backup strategies can protect businesses from software and hardware failures and data corruption from malicious software.

By creating regular backups of critical data, you can also mitigate the risk of ransomware. Backups are a reliable way to recover deleted, overwritten, or destroyed files.

When Using a Data Warehouse

All the data protection techniques mentioned above can also work for sensitive data stored in data warehouses, or centralized relational databases hosted on a cloud or a mainframe enterprise server. Additionally, you can perform audits that are specific to data warehouses to help you detect vulnerabilities and avoid data exploitation. These include auditing the connection and the disconnection to the warehouse, the access to a data source, and changes to the data.

Data warehouses offer multiple benefits to organizations. They can store large amounts of data from various heterogeneous sources, such as production, internal, or historical data.

Organizations can use that data for business analysis and decision-making, while different user groups can access it with various needs and security requirements. You can also use them to store de-normalized historical data. Analyzing that data can provide you with a deeper understanding of your past business operations and help you make better decisions in the future.


Companies store large amounts of data that is crucial both for their daily operations and for determining future business strategies. As Carly Fiorina has said, the goal is to turn data into information, and information into insight. Organizations that store sensitive data, though, must be careful in how they manage it. To maintain proper data management, organizations must be aware of the laws that regulate sensitive data, the frameworks to follow in order to protect their data, and the best practices to adopt in order to optimize data security.

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