Data Loss Prevention: What Is DLP and Why Is It Important?

Article Summary

Data Loss Prevention (DLP) is a crucial cybersecurity strategy designed to safeguard sensitive data from breaches, unauthorized access, and data exfiltration. By implementing DLP solutions, organizations can protect against threats to personal data, ensure regulatory compliance, and mitigate financial and reputational risks. A strong DLP strategy combines monitoring, encryption, and access control mechanisms to secure data at rest, in transit, and in use.

Data Loss Prevention Key Takeaways

• What is DLP? Data Loss Prevention refers to tools and techniques that prevent unauthorized access, loss, or exposure of sensitive data through cyberattacks or accidental leaks.
• Why DLP Matters: Data breaches can lead to financial loss, legal penalties, and reputational damage, making a strong DLP strategy essential for business continuity and compliance.
• How DLP Works: DLP solutions monitor data movement across endpoints, networks, and cloud environments, enforcing security policies to prevent unauthorized access or leaks.
• Types of Data Threats: Organizations face risks from insider threats, cyberattacks (phishing, malware, ransomware), accidental data exposure, and misconfigured cloud applications.

Best Practices & Solutions: Effective DLP includes data monitoring, automated risk detection, backup strategies, user behavior analysis, and ransomware protection to secure sensitive information.

The world has become inseparately reliant on digital tools to help run daily business operations, making cyberattacks and data leaks a lucrative and disruptive threat to your business.
Attacks and data losses have gotten so bad that 98% of organizations are partnered with at least one third-party vendor that has suffered a data breach in the last two years, and cyberattacks using stolen or compromised credentials have increased 71% year-over-year since 2023.

With these hard truths in mind, a reliable data loss prevention (DLP) strategy should be an integral part of any business aiming to safeguard their and their client’s intellectual property and confidential information while complying with industry data protection regulations for securing data.

Cyberattacks, data breaches, or even accidental exposures can result in massive financial losses, reputational damage, legal repercussions, and operational disruptions that can put your clients and bottom line in serious peril. And the more sophisticated these threats become, the greater the risks will be to your organization. 

But with the modern DLP strategies we will discuss below, you can help your organization mitigate these risks, protect critical information, and maintain business continuity.

What is Data Loss Prevention (DLP)?

Data loss prevention (DLP) refers to tools and techniques used to prevent a business’s and its client’s sensitive data from being leaked, misused, or lost during a cyber attack or accidental exposure.

An effective DLP strategy or data leak prevention strategy classifies and monitors data (manually or, ideally, automatically through a DLP solution) at multiple levels, including endpoints, networks, cloud storage, and SaaS apps to ensure that data access is not accidentally or intentionally granted to unauthorized parties.

Data leakage prevention strategies can address a range of concerns, from accidental data exposure to cyberattacks and internal threats. Today’s IT landscape is complex, internal and external threats are ever-present and constantly evolving, so DLP tools must be versatile and thorough enough to provide the necessary level of protection to keep your data safe.

What is Data Loss Prevention in Cyber Security?

Data Loss Prevention (DLP) is a crucial component of cybersecurity that focuses on safeguarding sensitive information from unauthorized access, theft, or accidental exposure. It employs a range of strategies, processes, and technologies to monitor and protect data at rest, in transit, and in use. 

By implementing DLP solutions, organizations can classify and manage sensitive data, ensuring compliance with regulations such as GDPR, HIPAA, and PCI-DSS. DLP significantly enhances cybersecurity efforts by reducing the risk of data breaches, which can lead to financial losses, reputational damage, and regulatory penalties. It creates a structured approach to data visibility, enabling organizations to identify and remediate vulnerabilities while also defending against insider threats and advanced cyberattacks.

DLP not only helps protect personal and intellectual property but also fosters a culture of data responsibility and compliance within organizations.

How Does DLP Work?

The most successful Data loss prevention strategies will utilize several layers of a security policy to protect your critical data – combining user activity monitoring, encryption, and access control mechanisms.

Automated DLP solutions, usually provided by a third-party vendor, use predefined policies established by the user to track and detect sensitive information. They are typically far more secure than manually tracking data across environments and devices and will automatically enforce rules that prevent unauthorized access, sharing, or transfer of data.

These solutions operate across three main areas, data in use (data an employee is working with), data in motion (data that is being shared across networks), and data at res t (data stored on devices and servers).

A DLP solution inspects all this data in real-time, checking for keywords and items that signal sensitive information (like social security numbers) and then either encrypting or restricting access based on the user’s criteria. It will also monitor for unusual activity, like large data downloads of confidential material, and take preventive action. It will then create an IT ticket to log for further investigation.

These preventive measures, and automated reactions, come together to create a robust automated security system that ensures the safe storage of your critical data.

Types of Data Threats in DLP

There are various types of data threats that organizations need to defend against when it comes to DLP. These threats may originate from either a deliberate attack on your network by either internal or external players, or through an accidental leakage through personal devices or improper procedure. Below we have listed out some of the most common data breach threats to keep an eye out for: 

Accidental Data Exposure: It is possible that employees will unintentionally share or upload sensitive information to an unsecured platform, putting it at risk for a data breach. This can happen if an employee sends confidential information to the wrong email address, or uploads it to an unencrypted server.

Malicious Insider Threats: Employees or contractors who have access to sensitive data may intentionally leak or misuse it for personal gain or malicious reasons, possibly as retaliation or for a bribe they were offered. They may then download data to their personal device to share it publicly, potentially harming the business’s reputation and finances.

External Attacks (Cyberattacks): Hackers commonly use techniques like phishing, malware, or ransomware to steal sensitive data. Phishing emails, for example, may mislead an employee to provide login credentials to someone outside the company.

Unauthorized Data Sharing: Employees may share sensitive data with third parties without following security protocols or procedures. Sharing sensitive data without encryption with a third-party vendor is one way you can be put at risk for a data leak.

Data Leakage via Cloud Applications: Misconfigurations in cloud services can also expose sensitive data to unauthorized or unwanted users. A misconfigured cloud storage bucket that allows public access to confidential files, for example, would leave you open to a security breach.

Mobile Device and BYOD Risks: Unsecured personal devices used for work are a common oversight that can lead to data loss or exposure. It can be very easy for employers to misplace company phones and laptops that contain sensitive information and are not properly secure, or to store data on a personal device outside the company’s network. Theft and loss can then lead to a significant loss of sensitive data with very little effort.

Weak Authentication and Access Control: And simply having poor access controls or weak authentication can allow unauthorized individuals to access sensitive data. If your company has easy-to-predict or common passwords, you may be at risk of a data breach.

DLP solutions that monitor, detect, and mitigate these types of threats by enforcing data security policies are irreplaceable tools when it comes to securing your data. Automation allows you to effortlessly discover your security holes and track unusual behavior, allowing you to prevent your breaches before they happen.

5 Reasons Your Enterprise Needs Data Loss Prevention

Data loss is inevitable. People make mistakes, applications malfunction, and cybercriminals are constantly looking for vulnerabilities in the security perimeter of businesses. This can lead to multiple negative implications and risky situations for a company, but efficient data loss prevention software can stop most of the incidents and minimize the outcomes of the rest.

Below we have listed some of the most common disruptions a date beach can cause, and why companies begin adopting DLP as one of the guiding principles of their IT security:

1. Business Continuity: Losing important data can disrupt business operations, halting productivity and costing revenue. Effective DLP ensures that your business can recover quickly from incidents and maintain continuity.
2. Reputation Management: A data breach can severely damage an organization’s reputation. Customers, partners, and investors may lose trust, resulting in lost business opportunities.
3. Legal Penalties: Non-compliance with data protection laws, such as GDPR or HIPAA, can result in hefty fines and legal consequences. DLP helps organizations adhere to these regulations.
4. Prevent Permanent Data Loss: Corporate espionage or targeted attacks may result in the permanent deletion of sensitive information. DLP helps prevent the irreversible loss of critical data.
5. Cost Savings: The financial impact of data breaches can be immense. Investing in a DLP solution can help avoid the costs associated with data recovery, legal fees, and lost business.

If you feel that your business may be at risk of a data breach through any of the above-listed risks, seriously consider strengthening your security with a DLP solution. Many businesses cannot afford the burdens carried with severe data loss, and a single hack could send your operations into a tailspin.

And while automated solutions will be your best bet against data breaches, there are also some standard best practices you can follow to help prevent any critical data loss.

Data Loss Prevention Best Practices

This section discusses critical enterprise DLP practices. It is important to combine as many of these practices as possible to make sure your data loss prevention is efficient and can withstand modern cyber threats.

Backups are essential to recovery.

Backup is a must-have practice for data loss prevention for both on-prem and cloud environments. An efficient backup solution works automatically and requires minimal manual control from the IT team.

Is backup enough for data loss prevention?

Some organizations think that having a backup is enough for data loss prevention. However, we think it’s an erroneous approach for the cloud DLP for the following reasons:

1. 57% of backup compromise attempts were successful in 2023, meaning that attackers were successful in impacting the recovery operations of over half their victims.

2. Recovery in the cloud takes more time than with on-prem systems. This is especially true for ransomware attacks.
3. Ransomware, man-in-the-middle, and zero-day attacks often include data leaks. And it is preferable to prevent them rather than exclusively rely on backup.

Data Retention Policies help mitigate compliance and data loss risks.

Google Workspace, Microsoft 365, and certain third-party tools have functionality for data retention (the protection of certain files from deletion and editing). Here’s how it works in Microsoft 365. An Admin creates a data retention policy for a certain type of files (files with a particular word in the name or belonging to a certain organization). Every time such a file is edited or deleted, Microsoft 365 creates its copy and stores it in a separate location. Keep in mind that the file takes up the user’s storage space. To uncover this copy, Admins need to use a special search which makes the recovery process harder.

User and Data Behavior Monitoring help address insider risks.

Monitoring data behavior also helps improve data loss prevention. Admins can detect and investigate whenever a record (file, folder, or email) is deleted, edited, or removed from the trash. But it’s next to impossible to carry out manually within a large organization where hundreds of files are edited and deleted on a daily basis. That’s why this is usually an automated function within third-party DLP solutions.

User behavior monitoring is similar to data behavior monitoring. Only it focuses on detecting suspicious behavior of certain users and enables companies to identify employees that carry out man-in-the-middle attacks.

Shadow IT Control prevents dangerous apps and integrations.

This practice helps prevent data loss in zero-day attacks. It is important for companies to identify potentially dangerous applications with editing permissions and revoke their access to sensitive data. This DLP program requires proper application risk assessment and, if done manually, can take several weeks. Tools like SpinOne have app detection and evaluation functionality and can do this task within seconds.

Ransomware Protection Software helps stop incoming attacks right away.

Some ransomware protection tools can stop ransomware at the very beginning of an attack preventing it from decrypting the entire corporate data. Note, however, that most anti-ransomware tools usually wait for the end of the attack and only then start recovery from backup. In the case of cloud data, this process can take weeks or even months due to API limitations. Another type of ransomware protection uses historical data to identify the ransomware and get the key from their database. Unfortunately, ransomware is the most actively evolving type of malware, so chances are high that an organization will be hit with a new type. The best anti-ransomware tools use data behavior analysis to spot cloud ransomware, identify the application that causes the attack, and revoke its access to your data.

Control over sharing helps prevent unauthorized access.

Sharing control, or monitoring and managing changes to file or system access, can significantly enhance data protection. Admins of cloud collaboration tools need to ensure that files containing sensitive data have proper sharing settings, and that these settings are honored and maintained over time. This practice includes the immediate detection of unauthorized sharing or changes made to security settings.

Adopting a DLP Solution

For large enterprises managing vast amounts of sensitive data, manual DLP practices are not enough. Automated DLP solutions are crucial tools when it comes to implementing comprehensive data protection strategies and ensuring your and your customer’s data security. Solutions like SpinDLP offer advanced features such as 24/7 ransomware detection, shadow IT discovery, and automated data retention policies to protect against modern cyber threats.

By adopting a robust DLP solution, organizations can automate data monitoring, enforce security policies, and minimize the risk of data breaches, ensuring their sensitive information remains secure.

Data loss prevention is essential for safeguarding the data that forms the backbone of any organization. A well-implemented DLP strategy provides a multi-layered defense against a variety of data threats, protecting not just the company’s data, but also its reputation and future.Get in contact with our sales team for a free demo here.

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