A company’s established procedure for archiving data to meet operational or legal compliance requirements is known as a data retention policy, also known as a records retention policy. Utilizing a template for a market data retention policy that offers a structure to adhere to when creating the policy can be useful for some organizations. In-depth data retention policies specify the business justifications for keeping particular data as well as what to do with it when it is time to discard it. Google, Microsoft, Apple, Twitter and Instagram are good examples of companies with a good data retention policy that benefits everyone. You must first determine the requirements of your data retention policy before establishing best practices.
Data Retention Policy
The established procedure for maintaining information by a business is called a data retention policy, also known as a record retention policy. Although ensuring proper data management under applicable legal statutes and regulations is the main goal of a market data retention policy, it is also a great way to boost productivity within your company. A market data retention policy outlines how each organization will collect, use, store, and eventually delete customer data.
A schedule for data retention or specific instructions for data retention is typically included in such policies. A standard market data retention policy lays out precise guidelines for how a business stores, accesses, and discards data.
Elements of a Data Retention Policy
#1. The Information You Collect
Define the data you must gather in your policy and inform your customers or users of the data collection practices employed by your company. Your type of business and your line of work will determine this.
#2. User Rights and Privileges
Both internal and external users can benefit from data retention policies. A well-designed policy also emphasizes users’ rights, including how they can ask to have their data deleted from company servers and how long an organization should keep it on file. Users have the right to modify and access their information whenever they want, as well as opt out of receiving marketing communications like push notifications, emails, and texts.
#3. Handling of Sensitive Information
Sensitive information can reveal information on a variety of subjects, including demographics, race, politics, income, and age. Although not all businesses fall under this category, some do, including law firms, polling, and opinion research firms, and survey management firms.
#4. Data Retention Duration
Another crucial element of your policy is the duration of data retention, also referred to as a data retention period. This covers how long data must be kept and whether it should be archived or disposed of after that time.
#5. Practices to Safeguard Data
It is critical to establish a strategy for safeguarding your stored data because data breaches pose a genuine risk to all online businesses. This should outline your data security strategy and your fallback plan in the event of a breach.
#6. Information About International Information Transfer
It is important to be aware of this and any applicable international laws if your company has clients in the EU or other countries. Even if you are based in the US, the GDPR is an excellent example of a global law that can have an impact on your data retention practices.
Benefits of a Data Retention Policy
Making a sound policy for market data retention has many importance. The following are a few of the more potent advantages:
#1. Automated Compliance
Organizations can guarantee compliance with legal requirements mandating the retention of different types of data by establishing a policy. This is market data retention policy aids businesses in maintaining regulatory compliance with the numerous and changing laws on the privacy of employee and consumer data. For instance, regardless of where a company is located, it must comply with the California Consumer Privacy Act when doing business with Californians.
#2. Less Chance of Receiving Fines for Noncompliance
Even if a company keeps all the data that is legally required, auditors may still ask for it, so the company must be able to provide it. Making it simpler and quicker to locate this data by only retaining the bare minimum amount of it lowers the likelihood that an organization will be penalized for failing to produce data that must be retained.
#3. Reduced Storage Costs
The cost of storing data is a direct expense, and storing less data benefits in lower storage expenses, as a result of data retention. Data storage is frequently expensive, especially if you keep a lot of it around longer than is necessary. A market data retention policy can assist you in determining the necessity and viability of storing various datasets by addressing questions such as whether data should be retained, how much it would cost to do so, how long it would be retained for, and how frequently it would need to be accessed. These policies’ questions make sure that there is effective and secure market data retention and disposal procedures to minimize expenses and storage needs at the same time.
#4. Lower Risk of Litigation
Data that is no longer needed is deleted to reduce the possibility that it will be discovered during legal discovery and used against the organization. Also, as data ages, its relevance decreases, and a market data retention policy gets rid of unnecessary data. Organizations benefit from data retention by lowering the risk for the occurrence legal action.
#5. Reassuring Customers About Privacy
Customers like to know that there is secure management and protection of their data. A robust data privacy policy helps them analyze how you store and process their data. Returning clients are at the heart of your operations. Therefore, it should cater for their privacy and peace of mind. Here, customers benefits from data retention by reassuring them of data privacy.
#6. Efficiency
A server’s performance will probably suffer if there is data overload. A data retention policy enables you to keep only the data that is necessary, enhancing the efficiency of your company. Your company benefits by standing out from the competition by having a data retention policy. A well-written policy makes your customers happy, which improves the user experience.
#7. Loss of data
When a significant data breach occurs, failing to remove years’ worth of client and customer information can have disastrous results. Data retention benefits businesses by preventing data loss. No company is immune from the possibility of a data breach, including universities and major social media platforms. Data breaches will have less of an effect on your company if you hold onto less data.
#8. Emergency Preparedness and Business Continuity
Strong data retention policies can aid organizations in regaining operations after disasters or system failures. Businesses can lessen the effects of a disaster or system failure by keeping crucial data and restoring their systems to a previous state. Additionally, by ensuring that vital data is accessible when required, data retention benefits businesses by supporting business continuity. For instance, if a company’s systems fail, it can use the saved data to restore them to a previous state and carry on with business as usual.
Data Retention Policy Best Practices
The requirements for developing a data retention policy vary depending on the organization. However, there are a few data retention best practices that businesses should follow when creating a data retention policy. Among these ideal practices are:
#1. Determine What Your Business Needs Are
Legal requirements come first, but any data retention policies you put in place should also streamline business-critical processes and encourages efficiency.
#2. Make Developing a Data Retention Policy a Collaborative Effort
You require input from a variety of different perspectives to develop a record retention policy that is truly comprehensive and serves the interests of your entire organization. Businesses should include their internal legal counsel, the finance team, the accounting group, as well as other managers and supervisors from different departments.
#3. Avoid Making Things Too Complicated
When drafting retention policies, use clear language and concise terminology. This will improve their clarity for the workforce and raise the likelihood of following it. And remember: You can always start small and make changes over time as needed.
#4. Identifying the Rules of the Law
Organizations must identify the laws and regulations governing data retention to include those requirements in the data retention policy. Compliance with applicable laws is only one part of developing a successful data retention policy. The retention policy must also consider the business needs of the organization. Operational needs may require that the business keeps data on file for longer than the law requires.
#5. Data Retention Types
when creating a data retention policy, taking data types into account. In any organization, certain data are worth more than others. A company should refrain from establishing a general data retention policy that covers all types of data. Instead, the policy should set forth the types of data that the business must keep and the length of time they must keep it.
#6. Choosing an Effective System for Data Archiving.
Consider implementing a data archiving system if regulatory requirements call for the organization to keep certain types of data on file for longer than the company needs them. The business can decrease the cost of archival data storage with the aid of a data archival system, which can also automate data lifecycle management and provide you with the resources to locate data in the archives.
Good data archival enables putting a legal hold plan into action. If an organization is involved in litigation, the data lifecycle management process will likely need to be suspended to prevent the deletion of the data that has been subpoenaed once its retention period has passed.
If there is an obligation to an organization to comply with regulations, it will probably need to document its data retention needs to meet legal obligations. There may be a lot of legalese in this formal document. As a best practice, take into account creating a more straightforward version of the document that can be used internally to aid stakeholders in the organization in understanding retention requirements.
#7. Sort Every Bit of Data
The organization can ignore every information that it deems to be unimportant. However, the backup and retention strategy must account for and incorporate all of the data and files that are present throughout the environment. By categorizing data, you can make sure that any private information that is crucial to business operations is secure and then is available for review or restoration whenever the organization needs it.
#8. Review Compliance Standards
Most businesses have at least one regulatory body in place to control how long they keep, backup and retain data. You might require assistance from a consultant who is knowledgeable about all the rules to stay compliant.
#9. Deletion Procedure
The data will eventually become unnecessary, and you will want to delete it to save money on storage. The deletion policy establishes the conditions under which you can discard data without jeopardizing compliance or business recovery.
What is the Importance of Data Retention
A company’s overall data management strategy includes a policy for data retention. A policy is essential because data can quickly accumulate, making it essential to specify how long an organization must retain particular data. Whether it takes six months or six years, a company should only keep data as long as it needs it. Data retention that lasts longer than necessary consumes extra storage space and raises costs.
How Do You Create a Data Retention Policy?
A data retention policy is rarely easy to create, so some organizations might find it more beneficial to outsource the process of developing and implementing the policy. Ten fundamental steps can be followed by organizations when developing their own data retention policies:
#1. Choose a Person or Team to Be in Charge of Developing the Policy.
Due to the need for expertise in numerous areas, this task is typically not handled by a single employee of the company. The process of developing a data retention policy is typically a collaborative effort between the legal department of the company, the IT staff, and other important stakeholders.
#2. Find Out What the Legal Requirements Are for the Organization.
The policy must adhere to any regulations that are relevant to the organization and either meet or exceed its requirements. Determine the legal requirements upfront because they will serve as the policy’s framework.
#3. Describe the Needs of the Business of the Organization.
This entails classifying different data types and determining how long each data type should be kept. As part of the organization’s data lifecycle management process, data is typically only active for a brief period of time before being transferred to archival storage and ultimately deleted from the archive. Decide who will be in charge of monitoring compliance with the policy regarding data retention.
#4. Sort and Group Your Data.
Data types, access guidelines, and storage locations vary across every organization. Sort data into categories to enable the separation of sensitive information from generic information. To protect sensitive data against threat actors, strict cybersecurity laws and defenses are required.
#5. Find Out What Laws and Regulations Apply to Data.
Compliance standards guide as your policy rules are created. Every compliance requirement must be taken into consideration because violations can result in hefty fines.
To ensure policy compliance, figure out how to conduct internal audits. Choose how often the data retention policy should be examined and updated. Establish a method for enforcing the policy by working with the HR or legal departments of the company.
Identify the software-level implementation and enforcement methods for the data retention requirements. Formalize the data retention policy in writing. Present the policy to the relevant parties for approval after it has been drafted.
What Is the Standard Data Retention Period?
The amount of time that an organization keeps records on hand is referred to as a data retention period. Retention times for various types of data should vary. Data should only be retained for as long as it is useful, according to best practices… Most regulations are met by the generally accepted long retention standard of one year. But there are several established guidelines for the preservation of business data, depending on the sector in which you work.
- FISMA Data Retention Requirements – 3 Years
- ISO 27001 Data Retention Requirements – 3 years
- NERC Data Retention Requirements – 3 to 6 Years
- Basel II Data Retention Requirements – 3 to 7 Years
- SOX Retention Requirements – 7 Years
- HIPAA Data Retention Requirements – 6 Years
- NISPOM Data Retention Requirements – 6 to 12 Months
Why Do We Need a Data Retention Policy?
A data retention policy outlines the purposes, methods, duration, and methods for deleting data. The ability to comply with regulations, assert legal defenses, and recover from disasters is made possible by data retention policies, which are crucial to data management. Additionally, they can assist in keeping vital information accessible to staff members.
What Is a Good Document Retention Policy?
An organization’s adoption of a set of procedures known as a document retention policy serves as a manual for how important documents, records, and other types of information should be saved, kept, and destroyed. Your business can avoid legal issues, stress, and expensive discovery by having a solid document retention policy.
Whether it takes six months or six years, a company should only keep data as long as it needs it. Data retention that lasts longer than necessary consumes extra storage space and raises costs.
What Is the Difference Between Data Retention and Data Archiving?
Data retention describes how long the company that collected the data keeps the information. The deliberate storage of data in a format that makes it simple for collaborators to access it again is known as data archiving. The act of securely and responsibly deleting data is known as data disposal.
Data archiving focuses on safely keeping data that is valuable to the business permanently or over the long term. In the meantime, data retention develops a set of guidelines that specify how long a business should keep data before it needs to be discarded or moved to an archive.
How Long Should You Keep Customer Data?
No minimum or maximum retention times for customer and supplier data are specified by the General Data Protection Regulation (GDPR). The law states that you must only keep data as long as it is required for the purpose for which you obtained it.
Conclusion
A company’s data retention policy governs how data is stored for compliance or regulatory purposes as well as how it is disposed of after its purpose has been fulfilled. A data retention policy, no matter how basic, should specify the kinds of records and data to be retained, how long they must be kept, and what kind of storage system or devices will be used. All of these elements will typically be determined by the regulations set forth by the regulatory body that oversees the industry.
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