A data retention policy is a company’s established protocol for keeping records for a set period. It may also be called a records retention policy or backup retention policy. The goal is to secure your data and ensure compliance with particular business needs, industry guidelines, or legal requirements.

A comprehensive data retention policy and records management plan detail why a company wants to retain specific records and where to store or archive this data. The policy should also include information about who is responsible for each data type and how it will be deleted (or purged) at the end of its retention period.

A data retention policy should also specify backup storage procedures to help a company recover if it experiences data loss.

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 the following:

  • Retention periods for different types of data: The policy should define specific retention timeframes ranging from 2-10+ years for various categories of data, such as financial records, personnel files, healthcare records, contracts, and sensitive data. 
  • Roles and responsibilities: The policy designates internal stakeholders responsible for implementing and enforcing data retention processes across systems and ensuring compliance. This cross-functional team 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. This includes servers, backup systems, archives, and more.
  • Data disposal and destruction: Provides guidelines for permanently disposing of or destroying data once the defined retention period by law has expired, including physical destruction and degaussing options.
  • Compliance with privacy laws: Ensures data archiving, backup, and retention practices adhere to relevant federal and state laws and industry regulations such as General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA) as well as Payment Card Industry Data Security Standard (PCI DSS) requirements for credit card data. Violations can result in significant legal penalties.

Why is a Data Retention Policy Important?

Regular Backups and Archiving

Proper data backups are essential to your business continuity plan when faced with unexpected disasters. Suppose an organization needs to have comprehensive data backup measures in place. In that case, disaster recovery will be incomplete and affect business continuity because of a lack of access to the data and records required to function correctly.

On the other hand, backing up too much data may need to be clarified for the recovery process. Moreover, unnecessary retention and full backups can consume expensive storage space and decrease network access speed.

Thus, a data retention policy helps ensure that the business retains or backs up the appropriate pieces of 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 data that’s still relevant and useful.

Legal and Regulatory Compliance

Efficient data and records management can support core business functions and help the organization meet its legal, statutory, and regulatory obligations. In recent years, the focus on data privacy has increased, which has resulted in more complex laws and regulations worldwide.

For example, publicly traded companies in the United States must establish a retention policy to meet the data retention requirements outlined in the Sarbanes-Oxley Act (SOX). Similarly, healthcare organizations are subject to the data retention requirements of the Health Insurance Portability and Accountability Act (HIPAA).

In addition, companies that process customer payments (e.g., via credit cards) must adhere to the data retention and data disposal requirements specified in the Payment Card Industry Data Security Standard (PCI DSS).

Any company globally that collects and processes the personal data of EU citizens must adhere to the data retention requirements of the European Union’s General Data Protection Regulation (GDPR). To comply with the GDPR data protection law, data retention policies must explain what is being collected, why it’s being collected, where it’s being held, and the retention period.

Besides achieving compliance with these laws, a data retention policy can help an organization maintain its data privacy and confidentiality. It can also protect the firm from non-compliance fines, punitive actions, and future legal liabilities.

Meet Business Needs

Organizations may also have specific contractual and business needs that require a data retention policy. As such, 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. Then, it must classify that data. These steps are crucial because 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. Meanwhile, other records, like sales contracts and the associated details, must be stored for many years.

For example, healthcare organizations store Personally Identifiable Information (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 within the document.

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. It is also important to mention which records need not be retained and can be deleted immediately.

Data Destruction Procedures

Highlighting how records will be deleted when the retention time is up is essential. Specify the process for destroying paper documents—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 to ensure clarity and communication.

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 to the above sections, a comprehensive retention policy should include the following:

  • 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 every piece of data can be backed up without being backed up. Regarding data retention and backups, 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.

However, there are several best practices that organizations can consider to get started:

Identify and Classify Data Types

Classifying data can help identify which data needs to be backed up or archived and for how long. These questions can help determine if a particular type of data you need to back up:

  • 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?

Identify Legal Requirements

The most important question is: 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.

Identify Business Requirements

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

Specify Relevant Details

The policy must include details such as the following:

  • 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 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. Here’s where a comprehensive platform like ZenGRC provides the conveniences and features you need. ZenGRC can easily be incorporated into a business’s data retention strategy to meet legal and regulatory requirements effortlessly.

ZenGRC enables organizations to automate their data lifecycle, provides defensible auditing capabilities, enforces structured retention policies, and maintains trackable accountability. Get a demo and learn more about ZenGRC’s automation workflows, integrations, and configurations.