A Guide to Data Security: What is it, How it Works, And Best Practices

Updated on August 7, 2022
A Guide to Data Security: What is it, How it Works, And Best Practices

It doesn’t matter what your business’ size or industry is. If you handle personally identifiable data (PII), data security is a top priority.

As cybercrime continues to thrive, businesses have no choice but to keep up the pace and continuously invest in data security. Why? Because poor data security practices have business-crippling consequences. 

According to IBM, the average cost of a data breach is currently $4.24 million – the highest it’s been in 17 years. Lost business costs, such as customer turnover, system downtime, and reputational damage, accounted for nearly 40% of the average total cost of a data breach.

Data breach

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All it takes is one vulnerability for you to become the next victim of a data breach. Luckily, by prioritizing your data security and following some best practices, you can significantly reduce the risk of cyberattacks. 

Let’s explore what data security is, how it works, and go over some best practices to ensure that you’re always one step ahead of cybercrime. 

What is Data Security?

Data security refers to the processes and policies put in place to protect sensitive information from corruption, modification, unauthorized access, and theft. It can involve the implementation of a range of technologies and techniques including data encryption, physical security, admin controls, and more. 

Data security practices aim to protect online data at every endpoint and entry point, from your hardware and software to your networks and cloud systems.

Data security and data privacy are not the same thing. Though it is important to make sure you have your customer’s consent if you are storing their data as you are  working towards securing compliant B2B sales.

How Data Security Works

To get a better look at data security in action, here are some common types of data security technologies and solutions that businesses are using today.

Data Discovery and Classification 

The more data you have across your data flows, the bigger the risk of your data being compromised. Data discovery and classification technologies enhance your data visibility, so you can visualize where your data comes from, the type of data it is, and how it’s being used.

Data discovery technology scans your entire data environment to uncover any structured or unstructured data in unsecured locations. Data classification technology takes this data and applies classification labels to it depending on predetermined rules and patterns. Both technologies are automated to solve the problems of manual data processing, allowing for the rapid implementation of security measures in high-priority areas.

Data Encryption

Data encryption uses an algorithm to encode data, making it appear unreadable to unauthorized users. Only those with the correct decryption key can access the unscrambled information. Video conferencing solutions (like many of these best Zoom alternatives) provide end-to-end encryption. 

Data Masking

Data masking renders your sensitive data useless to unauthorized persons through the use of word/character substitution or shuffling. It muddles your data by adding proxy characters and removing other characters in a way that cannot be reverse-engineered. While it may appear real to unauthorized users, masked data documents are useless for anything other than software testing and training.

Read Also: How to Use a VPN: IN-depth Analaysis and Guide

Data Resilience 

Natural disasters, data corruption, and data theft can cause unexpected and widespread business disruption. According to Statista, 47% of businesses report that work interruptions and/or production downtime are the biggest impact of cyberattacks, followed closely by the loss of personally identifiable customer information. 

Impact of Cyberattacks

Data Source

Businesses need to be able to retrieve lost or corrupted data quickly. Data resilience mitigates the impact of data loss by ensuring that there are lots of backups of the data stored across multiple locations. This way, if a business falls victim to a failed server or ransomware attack, it can restore its data from another location and promptly perform an incident response strategy. Additionally, by migrating data from one database system to another, businesses reduce the risk of being solely reliant on a single platform, thus enhancing their resilience against database-specific issues or failures.

Identity and Access Management (IAM)

IAM is a framework that governs the process of authenticating the identity of every user who attempts to access a system, account, or resource. Acting as your frontline defense against fraud, a solid IAM strategy is critical to prevent unauthorized users from accessing sensitive information. 

IAM technologies include single sign-on (SSO), multi-factor authentication, password management, so you don’t have to worry about forgetting your password, and administrative controls like privileged user management and access request and review.

You can even consider using IAM technologies as a guide to help you set up affiliate program authentication. 

Data Security Best Practices 

Cybercriminals don’t care if you’re a small business or an enterprise. In fact, small businesses are less likely to implement rigid data protection due to their perceived low risk, unfortunately making them easier targets to attack. 

So, regardless of whether you’re big or small, here are some best practices that you should be following. 

Identify and Prioritize Data Security Risks

In order to devise a data security framework, you need to have a sound understanding of your unique data security risks. No two businesses’ priorities will be the same, and jumping on the latest trend means you might neglect other, more vulnerable areas of your business.

Identifying and classifying your data can help you determine where your low, medium, and high-sensitivity data resides. It can uncover hidden pools of sensitive data and alert you to high-priority risks. 

For example, a business using consumer VoIP apps like Whatsapp and Facebook Messenger for employee collaboration might realize after a risk assessment that they need to switch to an enterprise communication system instead. 

Invest in a VPN

A virtual private network (VPN) hides online activity, providing powerful protection against hackers and snoopers who lurk on public networks. With a VPN router, companies can provide business-wide VPN connections, eliminating the hassle of installing separate clients across individual devices. 

Also, remote employees can access your business’ internal network without having to go through the public internet. This means they can access internal data without the risks of on-path attacks, eavesdropping, and other nefarious activities. Also, this benefits your company in terms of Digital workplace transformation.

Setting up a VPN is hassle-free and, once you’re in, delivers an intuitive user experience. Most importantly, though, VPNs triumph in being notoriously hackproof, making them a must for small and large businesses alike. 

Authenticate and Control Internal Access 

According to a report by Ponemon, the frequency of insider threats is on the rise by 60%, with 67% of companies experiencing between 21-40+ incidents per year. Of the 6,803 reported attacks, 56% were caused by accidental employee negligence, while the rest were due to criminal/malicious insiders or credential thefts

Control who can access your system – as well as the information they can access – to prevent internal data breaches. A marketing assistant, for example, shouldn’t be able to access your system for stock management. Adopt a least-privileged access model which gives every employee the minimum level of access rights they need for their job.

Make sure you review your access controls on a regular basis. Something that businesses tend to forget to do is change an employee’s access controls once they’ve switched departments or left the business. This can lead to the accidental or malicious sharing of sensitive information.

Continuously Prepare for Threats

Never let your guard down in the face of data security. As technology advances, cybercriminals are growing smarter. Conduct regular, scheduled audits as well as anomaly testing and vulnerability testing.

On a different but related note, you can prepare for threats by asking new employees to sign an NDA (non-disclosure agreement). NDAs reduce the risk of both current and ex-employees sharing sensitive information, making them popular in the Government, finance, and even tech industries. 

Use an NDA agreement template as a base and tailor it to your business.

Delete Your Unused Data

Your old and unused data can still contain PII like email addresses, phone numbers, and passwords, all of which can be used by cybercriminals for malicious purposes.

Set a limit for how long you store your user’s data and implement regular data cleansing practices. Even little things like making sure employees remove ex-colleagues from their phone forwarding automation can prevent accidental information-sharing. 

Set Up Antivirus and Endpoint Security Infrastructure 

With the ability to connect to networks via a growing number of devices and endpoints, employees are free to work remotely and autonomously. However, more endpoints equal more exploitable vulnerabilities, especially if you employ BYOD (bring your own device) practices. 72% of businesses don’t have malware protection for BYOD.

BYOD Adoption

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Antivirus software is a foundational endpoint security measure that should be installed on all of your employee’s devices, workstations, and servers. Although it doesn’t offer full protection, antivirus software acts as a great first-line defender in the prevention of malware.

An endpoint protection platform (EPP) integrates antivirus software with other technologies like data encryption and data loss prevention. It’s capable of detecting and mitigating new security attacks like file-based malware attacks or zero-day exploits.

Educate Your Employees 

Of all the accidental insider breaches reported by Egress’s recent data breach survey, 24% were caused by a lack of employee training, and 23% were caused by a lack of employee awareness

Provide employees with the security awareness training they need to prevent and identify suspicious behavior. Encourage them to make a habit out of tasks like frequently changing their password or using a secure VPN. Educate them on your data usage policies to reduce the negligent handling or sharing of sensitive data. And lastly, stress just why following these practices is so important. 


There are many other data security practices available than the ones listed here. You might utilize continuous user monitoring, implement a patch management strategy, or invest in a secure text message service for business. The key is to identify your business’ security priorities and create an action plan that targets your most at-risk areas. 

While there’s no such thing as being 100% risk-free, mitigating the risks as much as you can is good enough. Use this guide to protect your sensitive data during its collection, handling, storage, and transfer. 

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