Data classificationis afundamental security practiceused toprotect sensitive informationbased onrisk, confidentiality, integrity, and regulatory requirements.

Key Factors in Data Classification:

Data Sensitivity:

Organizations classify data based onhow sensitive it is:

Public(e.g., marketing material).

Internal Use Only(e.g., business plans).

Confidential(e.g., financial reports).

Restricted/Highly Confidential(e.g., personal healthcare records, credit card details).

Compliance & Legal Requirements:

Certain data types have strict compliance laws:

PII (Personally Identifiable Information) → GDPR, CCPA

Financial Data → PCI DSS

Healthcare Data → HIPAA

Cloud providers must ensure security policies align with compliance frameworks.

Impact on Security Controls:

Highly sensitive data requires encryption at rest and in transit.

Access control must be enforced with least privilege and IAM policies.

Risk Management:

Properdata classification helps organizations define security policiessuch as:

Retention policies(How long data should be stored?).

Backup and disaster recovery strategies.

This is outlined in:

CCSK v5 - Security Guidance v4.0, Domain 11 (Data Security and Encryption)

Cloud Controls Matrix (CCM) - Data Security and Data Classification Standards​