What Is Data Loss Prevention?

As more and more organizations rely on technology to perform business operations and store important information, data protection is a critical element of business success.

Data has become a hot commodity to cybercriminals. If your business doesn’t have a proper data loss prevention (DLP) strategy in place, sensitive data like intellectual property and personal information (e.g., payment card information, Social Security numbers, health records) are at risk of being lost, stolen, or misused by attackers.

“In the digital age, with cyberattacks becoming a norm and a very serious threat to organizational and individual information, DLP is a subject both large and small businesses must take into account,” Allison Jones, founder of Evolution Consulting and author of Measure Twice, Cut Once: Navigating Negativity in Toxic Relationships, told business.com.

What is data loss prevention?

Data loss prevention is a set of tools and best practices an organization uses to keep sensitive data from being lost, stolen or misused by unauthorized users. Although it is commonly used to protect from internal or external threats by attackers, it can also be used to prevent employees from simply losing or misplacing confidential information. An essential part of data loss prevention is hiring trustworthy employees and training them on cybersecurity best practices.


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Why do companies need DLP?

Every business, regardless of size, should prioritize data loss prevention; however, it is especially important for small businesses, according to Jones.

“[Small businesses] are the most vulnerable because they typically do not have the infrastructure to prevent unauthorized use, and they can go out of business fairly quickly if they have no protections for their customers to prevent losses of valuable information,” she said. “Losses of revenue and customer trust is difficult to get back, and the presence of legal action is becoming commonplace.”

In addition to protecting revenue, maintaining customer trust, and avoiding litigation, the right data loss prevention solution can help you protect your intellectual property and trade secrets, maintain your business’s reputation, and comply with data security regulations.

“Failing to have strong enough security and access controls for sensitive data can result in fines and other penalties from government bodies or industry organizations,” said Jesse Wood, CEO of eFileCabinet. “Any business that deals with private health information needs to adhere to HIPAA. Businesses that deal with customer payment information need to abide by the rules of PCI DSS.”

Another reason for implementing a data loss prevention solution is data visibility. With the right DLP software, you can gain useful insight into how your company data is being used. This intel can ultimately help you improve processes in your organization.

What are the common causes of data loss?

Both internal and external threats commonly cause data loss. These threats can be mitigated with a strong data loss prevention program in place.

External threats

Confidential data can be lost through external threats like cyberattacks. Data has become a large asset to cybercriminals, and if your data ends up in the wrong hands, it could mean the end of your business.

However, Wood said that hackers rarely strong-arm their way into a business’s database, but instead take advantage of lax security practices and human error on the part of the business’s users. For example, malicious parties often take advantage of weak passwords. 

“Weak passwords are a big culprit of malicious parties gaining access to a business’s internal network, and [they] often use that access to leak sensitive data,” Wood said. “Hackers often engage in manipulation tactics to obtain access to data, most commonly through phishing.” 

Internal threats

Outsiders are not the only potential threats to your data security. Although you may trust your employees, data loss stemming from an internal source is more common than you might think. An insider threat may come from an employee, former employee, contractor or business associate attempting to maliciously misuse critical data. Conversely, a data breach can occur from an employee accidentally downloading malware through an email link. 

“Whether intentional or not, data leaks that are a result of an end user’s actions usually happen because of a lack of access control to sensitive data,” Wood said.  

How to prevent data loss

An organization can take several steps to create an effective DLP strategy and prevent data leakage. Although some companies will need stricter protocols to protect their data, every organization should at least implement the following measures.

1. Install data loss prevention software and tools.

The right set of DLP technology and tools for your business depends on the type of data you need to protect, and there is a good chance you will need a combination of multiple tools. At the very least, your DLP system should include standard security measures like antivirus software, firewalls, and intrusion detection systems to protect from internal and external attacks. 

More advanced DLP capabilities include machine learning and artificial intelligence, honeypots, and other designated system mechanisms. You may also want to consider some form of user activity monitoring to track employee behavior and protect data access. Employee monitoring software is a great DLP tool for limiting employee website access, restricting user privileges, protecting sensitive data transmission, recording user activities and remotely deleting data. [In need of employee monitoring software? Check out the software we chose as best for small businesses.]

2. Organize documents with restricted permissions.

Proper document organization is an essential part of any DLP system. Create a system for how you will organize and store documents so that employees understand where and how to find important information. Set user restrictions on any sensitive or confidential information. 

“Users having full access to any folder, file and piece of data within a system can spell disaster if that user’s access is ever compromised,” Wood said. “Businesses need to have a hierarchy of permissions for their system, only allowing a few users access to that protected information.”

3. Enforce strict password protocols.

Since external threats typically exploit businesses’ cybersecurity weaknesses to gain unauthorized access to data, it is important for your entire organization to follow password-protection best practices as part of your DLP strategy. This is especially vital for any documents that include sensitive or confidential data. Be sure to use complex passwords with multifactor authentication, and users should regularly change their passwords. Other security measures can include IP address permissions and time restrictions.     

4. Pay attention to your document retention.

Proper document retention plays a key role in maintaining a secure database. Use a platform that allows you to manage your documents seamlessly and retain them only as long as necessary.

“It’s a good practice to not store documents with sensitive information any longer than you have to, in order to prevent it from ever being leaked,” Wood said. “Even if it’s past its retention date, it’s still the business’s responsibility if it’s ever compromised. Having strong governance also relates to ensuring that certain data remains tamper-free.” 

5. Train employees on cybersecurity best practices.

You can have all the right DLP software and policies in place, but it will ultimately be useless without the proper employee education. Employees must be frequently trained on your DLP policy and cybersecurity best practices to avoid incidents. Additionally, perform a regular audit on your data loss prevention policy to ensure you are up to date with current security concerns. [Read related article: How to Build a Culture of Cyberdefenders at Your Business]

“Regular self-audits of your system, as well as cybersecurity training for all employees, can go a long way towards preventing disastrous information leaks that can erode the trust of your customers and your standing within the business community,” Wood said.

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