Data retention is storing and managing a company’s data and records for a designated period of time. A company’s policy factors in their business requirements, industry needs, archive usage, and long-term goals. Creating a data retention policy uses that information to build a plan and then communicates it across the business. Read on for different aspects of a data retention policy and what to keep in mind when you are creating — or changing — one.
What Is a Data Retention Policy?
A data retention policy details how long data and records are retained, and will be versioned for different types of data. The policy should determine who is responsible for each category of data, and timelines for archiving and deleting data. A policy will determine what data needs to be saved, the format in which it will be maintained, how long it should be stored, if it should eventually be archived or deleted, and who has the authority to dispose of the data.
Why Is Having a Data Retention Policy Important?
Having a solid data retention policy in place is important for running a business and ensuring your company stays in regulatory compliance regarding data practices. A data retention policy also aids in the event of a disaster, as it helps maintain continuity with backup data available for recovery. How long to retain data might also be dictated by industry and regulatory guidelines that companies must meet for data privacy and storage.
How Do Data Retention Policies Ensure Legal and Regulatory Compliance?
Data privacy has been a focus of laws and regulations globally, and making sure that your company adheres to guidelines is critical. Failure to do so can result in legal penalties or fines. For example, any company that collects and processes personal data of European Union citizens must comply with the GDPR data protection law. Building or changing your company’s data retention policy helps confirm that the data privacy and confidentiality requirements in your industry are met. Using business requirements to build data retention policies and records management supports the business and helps an organization meet legal and regulatory requirements, ensuring that a company stays in compliance.
What Are the Benefits of a Data Retention Policy?
Having a data retention policy helps companies adhere to compliance goals, provides data backup, and results in cost savings. Top benefits are:
1: Meeting Compliance
Properly managing data storage timelines and meeting regulatory guidelines avoids civil, criminal, or financial penalties for non-compliance.
2: Agile Business Practices
Having an established process for data retention simplifies data management. This allows a business to be more agile, as only current and relevant data are in reports and views. Similarly, archiving some data instead of deleting it means that important records and documents are available for future reference when establishing company goals.
3: Recovery Readiness
Establishing a data retention policy forces a business to determine what data is vital for day-to-day operations, along with deciding what data should be stored for long-term health. Critical operational data can then be recovered in the event of a catastrophic data loss due to hacking, system failure, or an environmental event. Having a retention policy means backup is available to aid business recovery in an emergency.
4: Greater Storage Capabilities
More thoughtful and streamlined data retention policies create space for new data and information. Removing or purging outdated and/or redundant data also reduces digital storage costs. Data cleanups can also improve physical storage capabilities when they involve migrating data to the cloud. Read on for details evaluating the risks and benefits of cloud computing.
5: Improved User Experience
Whether “users” are customers or employees accessing data, an improved data retention policy removes outdated data and duplicate information. This creates a better user experience with faster searches and improved results, making it easier to find relevant information and increasing the speed of daily operations.
What Should a Data Retention Policy Include?
Standard data retention policies state the purpose for retaining information, plus the scope, and duration. In addition to responding to business needs, a retention policy takes into account relevant laws and regulations, including requirements like the retention schedule, rules for safeguarding data, and procedures to follow if there is a breach. Location is also a factor: data stored in different places may require different policies due to varied, location-based business and legal requirements. Plus, different data types will have different life cycles.
To see examples of data retention policies, you can view public information regarding data retention. Google, Amazon, Netflix, Spotify, Wikipedia, Apple, and Twitter are some companies that share public-facing data policies.
How to Create a Data Retention Policy
Every business is unique, but there are some best practices to bear in mind when building a data retention policy.
1: Research First
Have a comprehensive understanding of all regulations that apply to your business and any legal obligations before you get started.
2: Build a Team
Decide who needs to contribute to the policy and assign a representative from each team. This comprehensively captures business needs and builds buy-in from all teams.
3: Define Business Needs
Determine what data retention policies should be implemented based on all team business needs in order to maintain or improve processes.
4: Limit Customer Information
Retain personally identifiable information (PII) or other personal data on customers only as long as needed. If you want to retain data in the aggregate with customer details that aren’t needed, anonymize the information. Be sure to follow applicable regulatory guidance on personal data.
5: Archive vs. Delete
Consider which data should be archived instead of deleted. Deletion is permanent, and archiving creates ongoing storage costs. There are pros and cons to both.
6: Categorize Data
Different data has different storage lengths and needs. Files and information that are infrequently accessed should be moved to deeper archives, making high-value, frequently used data more accessible.
7: Set Limits and Delete
Give data a time limit for archiving and deletion. Permanent retention should be rare. It might seem smart to save data indefinitely, but in actuality it leaves business more open to risk, slows systems, costs more due to ongoing storage fees, and leaves an organization more vulnerable in the event of a data breach. Keep in mind typical retention periods mandated by applicable regulations — for instance, HIPAA requires a minimum 6 year retention period from the date of creation, or for a policy, when it last was in effect.
8: Back Up and Secure Data
Maintaining data security is important at each phase. Make sure that all data is protected and backed-up through an entire lifecycle.
9: Share the Policy
Communicate the policy in simple, straightforward terms that all team members can understand, making it easier for them to adhere to retention rules.
10: Update as Needed
Remember: things change! New requirements are established due to new laws being passed, and businesses evolve. As such, a data retention policy needs to be evaluated and reassessed. Change the policy whenever the business requires it, or laws need adjustments, and make sure the changes are communicated across teams.
Take Your Data Management Strategy to the Next Level
A data retention policy is a part of a company’s data management strategy. It ensures that outdated information is appropriately archived or deleted, and makes vital and important data more useful and accessible. When building your company’s policy, it’s important to make sure you keep industry requirements top of mind, and a solution like AuditBoard’s compliance management software can help. Don’t be afraid to reevaluate and adjust your company’s policy when needed.