Navigating data classification in the era of extensive cloud adoption

Healthcare and financial services organizations have embraced cloud technology due to the ease of managing increasing volumes of data, according to Blancco.

Cloud adoption has had significant effects on data classification, minimization, and end-of-life (EOL) data disposal. However, 65% of respondents say the switch has increased the volume of redundant, obsolete or trivial (ROT) data they collect.

Increasing volumes of stored data brings with it many issues and is of growing concern for organizations operating in heavily regulated markets. In addition to regulatory noncompliance risks, there are the cost and sustainability impacts of storing this data, as well as security concerns—more data means a greater attack surface and more liability in case of a breach.

Data classification and the cloud

Data management best practices indicate that organizations need to know what data they have collected, including its value, where it’s stored and when it needs to be permanently erased.

Yet just 55% of organizations can boast a mature data classification model that determines when data has reached EOL—meaning that nearly half fall short when it comes to determining when to dispose of cloud-stored data.

When asked about their cloud approaches, 60% of respondents said that their cloud provider handles EOL data for them. However, 35% do not trust their cloud provider to appropriately manage EOL data on their behalf.

“Healthcare and financial services providers handle some of the most confidential and sensitive information possible. While they have made the move to cloud for better connectivity, digital transformation and ease of managing data, many of them are still falling short when it comes to knowing how to reduce risk and maintain compliance when that data is no longer serving a business function,” said Jon Mellon, President Global Sales, Marketing and Field Operations at Blancco.

“Covid changed working norms for all industries, and adopting cloud helped adapt to those changes. But hackers also changed their approach. The industry reported that 45% of breaches that occurred in 2022 were cloud based. Yet our research found multiple instances of insufficient practices for managing EOL data in the cloud,” Mellon continued.

According to Blancco’s global study of 1,800 healthcare and financial services respondents:

• 65% of organizations feel that they can better manage EOL data on premises than in the cloud
• 63% use software-based erasure with an audit trail for managing all data – both on-premises and cloud, but a worrying 38% carry out erasure without an audit trail
• 91% of those surveyed recognize data classification as an important first step for achieving data security
• 36% are just beginning to implement a policy for data classification and minimization, with nearly one in ten yet to implement any such process

Regular assessment of data and setting retention periods is a critical and growing concern as regulatory requirements increase for the healthcare and financial services industries.

Managing EOL data

The study found that 57% of organizations have a data schedule where they review different data types to determine whether data has reached end of life.

But just 28% use the blunt approach of automatically setting a data expiration date, which is simple but ineffective: it does not consider what the data is, what it’s worth, or the risk of it getting into the wrong hands.

Healthcare and financial services organizations are, however, aware of the new challenges for managing EOL data in the cloud.

In fact, 65% have found it necessary to reassess how they determine what data is no longer needed since making the switch from analog to digital.

But in addition to falling short when it comes to data classification and minimization, a worrying 59% of respondents reported using processes without verified data destruction at least some of the time to deal with at least some of their EOL data. This can leave data intact and retrievable without a proper audit trail to prove proper EOL data disposal.

Best practice that may have been in place in on-premises data centers can be left behind when organizations migrate their data to the cloud.

While it is standard for cloud providers to refer to data deletion or destruction processes within user agreements, the practice of receiving clear assurances that specific sensitive data has been removed for good is still in its infancy, leaving highly regulated industries vulnerable to both regulatory noncompliance and unauthorized data access threats.

Rapid covid-generated cloud adoption is bringing to light the need for organizations to rethink ownership of their data in a heavily regulated and threat-saturated market.