What is data loss prevention? Everything you need to know

What is data loss prevention (DLP)?

To effectively protect sensitive information, organizations use a variety of DLP techniques:

• Contextual analysis examines the level of sensitivity of data as it is transferred as well as a user’s permissions and geographical location when accessing it. 
• Data classification creates tags for data, classifying it as sensitive or not, and uses algorithms to identify it quickly. 
• User access control allows an organization to restrict data access for each user and modify permissions for data access. 

Certain types of data are prime targets for cybercriminals. Organizations must take extra precautions to secure the following:

1. 1.Intellectual property (IP): If your institution uses or has intellectual property or trade/state secrets, you can use context-based classification systems within a DLP system to control access to this data while allowing authorized users to access it. 
2. 2.Personal information: If your institution collects, stores, and accesses personally identifiable information (PII), protected health information (PHI), or other types of sensitive data, you must comply with governmental regulations. DLP can then pinpoint, classify, and tag sensitive data, allowing your system to monitor data activity with little effort. 
3. 3.Login credentials: Username login and password information are a gateway to an organization's network and secure data, making it a high-ticket target for criminals. 

Why is data loss prevention important?

DLP software has become essential for organizations as they deal with increasingly sophisticated and expensive cyber threats. The stakes are high, with the average data breach costing $4.88 million in 2024.

Recent high-profile cases highlight the impact of data breaches – and the importance of cybersecurity. Take 23andMe's 2023 breach, which compromised user data and damaged the company's reputation – a serious blow given their role as custodians of highly sensitive genetic information.

The rise in cost and frequency of attacks may be attributed to several factors, the most prevalent being data volume growth. Organizations have to protect more sensitive information, and many are subject to regulatory frameworks like the GDPR, HIPAA, and CCPA. Protecting client information for companies handling health records or financial data isn't just about maintaining trust – it's a legal requirement.

Traditional security tools like standard encryption tools are no longer sufficient against data thieves and attacks. Organizations must also protect against insider threats, making DLP software a necessity to protect sensitive data from within and without. 

What causes a data leak?

Data leaks are an unfortunate but common issue for businesses of all sizes, and they can happen for many reasons. However, properly understanding the causes of data leaks is the first step in preventing them. Below, we’ve outlined some of the most common factors:

Human error 

Human error is currently the leading cause of data attacks because data thieves can trick people into sharing information. They use social engineering attacks, such as phishing, to persuade employees to click on malicious links or convince them to send emails containing sensitive data. 

Insider threats 

Insiders are individuals within an organization who have access to different parts of your system, including computer systems, data, or security procedures, and insider threats may include vendors, partners, contracts, and employees. Insiders may be malicious on their own, or outside attacks may compromise accounts to exfiltrate data. 

Malware and cyberattacks

Data thieves often use software like malware to attack a company's network and security system. A standard method of attack utilizes ransomware, which encrypts an organization's data to keep it under lock and key while the thieves demand a ransom. If the ransom is not paid, the criminals often threaten to release the data to the public. This strategy is often successful in cases where thieves have stolen intellectual property. Groups like Lapsus$ are notorious for this method. 

Device theft

Digital devices such as smartphones or PCs that have permission to access specific networks can be stolen and accessed. Even if a thief doesn’t target a particular device, it can still fall into the wrong hands. 

Physical theft

If an organization uses hard disk drives without a backup, any threat can wipe them out. Protecting the data is difficult, whether the cause is software corruption, a spilled drink, or other issues.

Key strategies for data loss prevention

To protect your sensitive data, a combination of smart strategies is essential. By addressing both human and technical vulnerabilities, you can significantly reduce the risk of breaches. Below are some practical approaches that can strengthen your data loss prevention efforts:

Employee training

Social engineering attacks are the most common way for data thieves to infiltrate an organization's system to steal sensitive data. Ensuring your employees have proper cybersecurity training, especially in recognizing phishing, smishing, and other popular attack tools. 

Data classification

Making data in your system easily identifiable and discoverable can help you keep track of sensitive or confidential data. A common reason confidential data gets stolen is that companies often forget or simply lose track of some data repositories. An organization can create better defense mechanisms and data visibility with data classification. 

Access control

Controlling access to data is a simple but incredibly effective way to protect data. This means granting permissions to employees, contractors, or other people only when necessary and only when they need it for their daily work. Decreasing the number of unauthorized users protects sensitive data while mitigating insider threats and data exfiltration. 

Endpoint security

Endpoint DLP allows you to monitor and stay on top of activity related to sensitive or confidential data. It secures and monitors activity on devices like servers, laptops, and mobile devices and can block users from performing any prohibited actions on each device. Additional endpoint security may also stop transfers between devices that aren’t approved.

Regular backups

Storing regular data backups of your data is used to recover data quickly if it’s lost, which may decrease any financial loss or legal impact. Backups are essential in situations where a data loss has occurred and are a last line of defense. 

Network monitoring

An efficient system with a network of tools within a DLP framework uses network monitoring tools to identify misuse of sensitive data. DLP will keep threats out while monitoring who can access confidential data and what they do with it. 

What are the benefits of using a data loss prevention solution?

DLP solutions are a great option for organizations that need to secure sensitive information and minimize the risk of data breaches. Let’s take a look at the main benefits of using a DLP system:

• Data protection: A DLP system aims to protect sensitive data from unauthorized users. You can better control data loss incidents by preventing data breaches and monitoring data within a system. 
• Compliance assurance: Complying with regulations such as the GDPR, HIPAA, and CCPA are requirements for some organizations to operate. Data loss prevention software allows IT teams to simplify and strengthen the protection of sensitive data from cyberattacks. 
• Cost savings: A DLP system can employ multiple security tools to protect confidential data within your network and the flow of data. Instead of purchasing each security tool separately, DLP systems offer built-in features and security tools, reducing the need for separate solutions. Organizations also save money by utilizing DLPs that meet strict data protection regulations, as they can prevent violations and expensive fines. 
• Reduced insider threats: With DLP systems, you can restrict access to confidential data. Employees and contractors can be given access to only the data they need to complete their daily work and nothing more, preventing data leaks. The DLP system can also monitor employee access and flag suspicious behaviors. 

Challenges of implementing data loss prevention solutions and how to overcome them

While data loss prevention solutions are appealing for many organizations, you may need to overcome some challenges and drawbacks. First, their cost is often a considerable challenge, especially for small or mid-sized companies. As companies usually tighten their belts rather than opening their wallets to splurge on new security measures, it can be hard to convince CEOs, CFOs, or other C-suite members of its value. 

Employee resistance is another challenge because new data loss prevention systems may mean a loss of data access for certain employees or more security hoops they have to jump through, which many do not appreciate. For employees that aren’t good with tech, this can be tricky. This also ties into the next challenge, the complexity of integration. Depending on your company's size, it may take a long time to fully integrate a system into your coexisting network(s), server(s), and more. 

To overcome these challenges, you’ll likely need everyone in your organization to adapt to a new DLP plan. Implementation cannot happen overnight and requires a team effort, so you’ll likely need help.

How can you ease the tension between employee workforces and a new data loss prevention system? 

• Provide employee training for DLP.
• Offer resources on how to access or request access to data assets.
• Start with the basic framework of a new DLP solution and roll out new tools in stages.
• If necessary, have a member of the IT team available to employees who need help adapting to the system.