CIO OPINION based on the company ’ s relevant records policy . This approach has powerful implications for regulatory compliance , cost savings , AI insights , sustainability , cybersecurity and access control .
Cost savings are a significant benefit of data classification . By assigning data to the right storage tier , businesses can optimise both cost and access . By understanding what the data allows businesses to make defensible deletion decisions , so what to retain and what to remove . These prevent indiscriminate storage and reduce unnecessary data bloat , ultimately cutting storage costs . In an era where data storage can be costly , this is a crucial consideration for businesses looking to manage their budgets effectively .
Regulatory
From a regulatory compliance perspective , proper data classification ensures that data is retained for the appropriate length of time , helping businesses avoid legal risks . This is particularly important in light of regulations such as GDPR , NIS2 , and most recently , DORA , which impose stringent requirements on data management and processing practices . By classifying data , businesses can ensure they meet these requirements and avoid hefty fines .
However , simply complying with each new data regulation as it emerges is not best practice nor is it strategic . This approach can lead to a reactive and fragmented compliance strategy , where businesses are constantly scrambling to meet the latest requirements . This not only increases the risk of noncompliance but also consumes significant resources and can disrupt business operations .
Instead , businesses should focus on creating a standardised process for data governance . A robust data governance framework provides a consistent and comprehensive approach to managing data across the organisation . This framework can serve as a template for regulatory compliance , ensuring that all data management practices are aligned with the highest standards and can be easily adapted to meet new regulations as they arise .
Artificial Intelligence
AI needs no introduction currently as it grips conversations at both a technical and economic level . As businesses increasingly adopt AI , having a robust data management strategy becomes even more critical . Having Redundant , Obsolete and Trivial ( ROT ) data can often lead to hallucinations or to the sharing of private data in LLMs , potential reputational damage can follow if data is exposed , or inappropriately accessed .
Proper data classification and indexing are essential for effective AI systems . Organised and categorised data allows AI algorithms to identify patterns and relationships more easily , leading to precise
Cost savings are a significant benefit of data classification .
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