What is a Data Retention Policy?

A data retention policy is a documented set of standardized procedures that specifies how long certain types of an organization’s data should be kept to meet business, legal, and regulatory requirements before being disposed of or deleted. Data retention policies are crucial in data management, privacy, and cybersecurity.

An effective data retention policy typically includes:

• ​Retention periods for different types of data: Defines specific retention timeframes for various categories of data, such as financial records, personnel files, healthcare records, contracts, and sensitive data.
• ​Roles and responsibilities: Designates internal stakeholders responsible for implementing and enforcing data retention processes and ensuring compliance. This often involves IT, legal, records management, and business heads.
• ​Backup and storage protocols: Outlines how data should be securely backed up and stored onsite or offsite during the mandated retention periods to prevent data breaches or loss.
• ​Data disposal and destruction: Provides guidelines for permanently disposing of or destroying data once the defined retention period has expired, including physical destruction and degaussing options.
• ​Compliance with privacy laws: Ensures data archiving, backup, and retention practices adhere to relevant laws and industry regulations such as GDPR, CCPA, and PCI DSS. Violations can result in significant legal penalties.

Why is a Data Retention Policy Important?

Regular Backups and Archiving

Proper data backups are essential to business continuity when faced with unexpected disasters. Without comprehensive data backup measures, disaster recovery will be incomplete and affect business continuity due to lack of access to required data and records.

Backing up too much data can complicate the recovery process and consume expensive storage space, decreasing network access speed. A data retention policy helps ensure that the business retains or backs up the appropriate data for a suitable amount of time.

Streamlined Data Management

A retention policy is part of an enterprise’s overall data management plan. The organization must outline all the different types of data and records it retains and how long each type should be stored and backed up. The policy helps ensure that outdated or duplicated data is appropriately disposed of, making it easier to find relevant and useful data.

Legal and Regulatory Compliance

Efficient data and records management supports core business functions and helps the organization meet its legal, statutory, and regulatory obligations. The focus on data privacy has increased, resulting in more complex laws and regulations worldwide.

For example:

• ​Publicly traded companies in the United States must establish a retention policy to meet the requirements of the Sarbanes-Oxley Act (SOX).
• ​Healthcare organizations are subject to the data retention requirements of HIPAA.
• ​Companies that process customer payments must adhere to PCI DSS requirements.
• ​Companies collecting and processing the personal data of EU citizens must comply with GDPR.

A data retention policy can help an organization maintain data privacy and confidentiality, and protect the firm from non-compliance fines, punitive actions, and future legal liabilities.

Meet Business Needs

Organizations may have specific contractual and business needs that require a data retention policy. The policy should specify how long the company will keep particular datasets and how it plans to make exceptions in case of lawsuits or other disruptions.

How To Determine Appropriate Data Retention

To implement an effective data retention policy, the company must first identify the types of data it stores and then classify that data. The appropriate data retention often depends on the kind of data to be retained.

The data lifecycle or retention period also matters. Some data, like standalone emails, can be classified with a short storage period before automated deletion. Other records, like sales contracts, must be stored for many years.

For example:

• ​Healthcare organizations store PII such as patient name, date of birth, Social Security number, and medical data.
• ​Financial services companies store customers’ credit scores, payment history, and loan information.

The retention policy should consider these data types and assign appropriate lifecycles accordingly.

Key Components of a Successful Data Retention Policy

A data retention policy should cover how the organization will backup, archive, and delete paper-based and digital records. The final document should be holistic and cohesive, with inputs from multiple groups and applied across the enterprise. The policy can be updated or revised, and a record of these revisions should be maintained.

A data retention or data backup policy may include some or all of the following sections:

Applicable Legal and Business Requirements

This section should detail the business and legal need for data retention and backups. It should be updated as requirements and regulations change.

Data Retention Procedures

Each record and data type will have different retention periods and processes. Consider where the data will be retained, how it will be backed up, and how long. Specify the role or team that owns each data type and is responsible for managing it. Mention which records need not be retained and can be deleted immediately.

Data Destruction Procedures

Highlight how records will be deleted when the retention time is up. Specify the process for destroying paper documents and detail which electronic documents must be manually deleted versus which the system automatically purges.

Data Archival Procedures

Some data may not be required for day-to-day use but must still be archived for legal or regulatory reasons. Archival procedures specify the document types, storage locations, and retrieval processes.

Some paper documents may be stored off-site for retrieval only if necessary. Certain electronic records may be stored on different servers to ensure quick response time and avoid clutter on local servers.

Exception Processes

The organization may have some exceptions to its standard data retention, destruction, or archival procedures. Clarifying these exceptions in the data retention policy is essential.

Proper Responses to Discovery, Legal, or Audit Requests

The organization should have a standardized response if there is a discovery, legal, or audit request. This section should specify the response process, who is responsible for making the response, and how it will be documented.

In addition, a comprehensive retention policy should include:

• ​Company name and contact details
• ​Version control
• ​Policy purpose
• ​Affected stakeholders
• ​Key terms used
• ​Roles and responsibilities of personnel involved

Best Practices for Backing Up Data

Storage space can be expensive, and not every piece of data needs to be backed up. Every organization’s needs are different. There are no set rules about backup strategy, frequency, or retention periods. An organization must assess its requirements holistically when developing its data retention policy.

Best practices include:

Identifying and Classifying Data Types

Classifying data can help identify which data needs to be backed up or archived and for how long. Questions to consider:

• ​Is the data critical now?
• ​Is it likely to remain vital in the future?
• ​Is it proprietary intellectual property?
• ​Does it constitute confidential business secrets?
• ​Is it a permanent document?

Identifying Legal Requirements

Is the data necessary for compliance or audits? Organizations must determine if there are legal or regulatory requirements to back up data for a specific time and manage their backup policy accordingly.

Identifying Business Requirements

The backup policy must consider the organization’s business requirements about each data type and how it is backed up. This may depend on the probability of data loss, the relative importance of the data, and how often it is refreshed.

Specifying Relevant Details

The policy must include details such as:

• ​Backup frequency
• ​Retention period
• ​Encryption requirements
• ​Access methods
• ​Personnel authorized to access the backup data

Make ZenGRC Part of Your Data Protection Plan

As organizations generate and consume ever-increasing amounts of data, they often need help using, storing, archiving, and destroying it appropriately. Managing the data lifecycle is not feasible manually because it’s inefficient, resource-intensive, and can create serious security and compliance risks.

To address these challenges, an automated data retention records management and backup solution is required. A comprehensive platform like ZenGRC provides the conveniences and features needed. ZenGRC can be incorporated into a business’s data retention strategy to meet legal and regulatory requirements.

ZenGRC enables organizations to automate their data lifecycle, provides defensible auditing capabilities, enforces structured retention policies, and maintains trackable accountability.