Essential Data Loss Prevention Best Practices Every Firm Should Know

Data is the most valuable resource any company possesses. When this is lost – whether through carelessness or a malicious attack – the consequences can be severe. This can range from a loss of trust among customers to regulatory fines and class-action lawsuits. In some cases, it could even threaten the future of the entire business. As such, having a clear plan for data loss prevention (DLP) is an essential part of any enterprise’s security policy.

Data loss is among the most damaging challenges for any business, especially in the current environment, where the cyber risks are greater than ever. In 2023, for example, there were 3,205 publicly reported data compromises, impacting an estimated 353 million individuals. However, our research suggests the vast majority of ransomware attacks that steal data go unreported, meaning the true scale of the problem is likely to be far worse.

The dangers posed by this go far beyond downtime. It could result in confidential proprietary information being leaked to competitors or sensitive customer financial details being used by fraudsters. If data does end up in the hands of criminals, it can also be used as the basis for extortion, which can leave firms at risk of severe financial penalties for breaching data protection rules such as GDPR.

When it comes to cost, many firms can expect a multi-million dollar bill for a data breach incident. In 2024, the average expenses for these issues totaled $4.88 million, according to IBM. Typical costs include ransom payments to hackers, data recovery efforts, forensic investigations and legal expenses such as fines and settlements with affected users.In short, data loss and theft can put a firm’s entire future at risk. As such, dedicated DLP tools are an essential part of any company’s cybersecurity strategy.

While avoiding the cost of a data breach is perhaps the most obvious reason to build a data loss prevention strategy, this should not be the only consideration. There are several other critical reasons why it’s important to have a strong data loss prevention policy. These include the following:

• Maintain compliance: Ensuring firms keep in compliance with data protection regulations around the world is essential, especially as these rules have tightened significantly in recent years. GDPR, for example, allows regulators to levy fines of up to either €20 million or four percent of global turnover for breaches – whichever is higher. Meanwhile, if you’re collecting customer credit card details, for instance, PCI DSS rules have stringent requirements for safeguarding this information.
• Protect brand reputation: As well as regulators, customers are also highly protective of their personal data and will make this a key factor when making decisions. According to McKinsey, 85 percent of consumers say that knowing a company’s data privacy policies is important before making a purchase, while 53 percent will only do business with firms that have a reputation for data protection.
• Protect intellectual property: Another potential issue is the loss of confidential business data. This could be trade secrets or intellectual property that would be highly valuable to competitors, or research and development priorities that could allow other firms to gain an advantage.

A typical business will hold a variety of data that will be of interest to hackers. This can broadly be categorized into high-risk, medium-risk and low-risk, depending on its sensitivity and value to the business. For example, customer financial or healthcare records would be regarded as in the highest-risk category, while outdated information with no commercial value or details that are already in the public domain are low-risk.

Typical types of data that businesses will need to protect include:

• Personally identifiable information (PII): This includes names, addresses, social security numbers, birth dates and other data that can be used to identify individuals.
• Financial data: Bank account details, credit card numbers, payment records and transaction histories can all be used by cybercriminals for fraud.
• Healthcare records: Patient medical history, insurance details and prescription information are extremely sensitive and valuable data, which is why firms in this sector are some of the most commonly-targeted organizations.
• Intellectual property (IP): This includes trade secrets, proprietary research and development, and confidential business plans, which will be invaluable to competitors.
• Employee data: HR records, salary details and performance reviews could be misused for identity theft or corporate espionage.
• Customer and client data: Contact details, purchase history and service agreements must be protected to ensure trust and regulatory compliance.
• Operational and legal documents: Contracts, internal reports and compliance documentation may result in serious legal and financial repercussions if exposed.

There are a range of activities that must be included if firms are to create a holistic solution for preventing data loss throughout their organizations. Some of the most important best practices that no company should overlook are as follows.

Step one is effective data discovery. It can be difficult for security teams to see exactly what company data exists, especially in the age of cloud computing, personal devices and shadow IT. However, firms can’t protect what they can’t see, so a thorough and regular audit of assets is a must. Once this is done, data should be classified according to its importance and level of risk to determine the level of protection it needs.

Encryption won’t prevent data loss by itself, but it does mean that if a business is compromised, there’s less chance that hackers will be able to use any stolen data. This needs to include both data at rest and data in motion and is a requirement for standards such as PCI DSS, which mandates cardholder data be protected with this technology.

Strong control of who has access to your systems is critical in preventing data exfiltration. A key best practice is to adopt a position of ‘principle of least privilege’. This states that any employee should only have access to data that is required for their day-to-day job and not more.

Tools such as multifactor authentication are critical in ensuring hackers aren’t able to use stolen credentials to exfiltrate data. However, this alone is not enough. It’s also important to ensure privileges are restricted to the minimum needed for individuals to complete their jobs, while any unused accounts should be deleted.

User error continues to be a primary cause of data breaches. In fact, one report from the World Economic Forum in 2022 claimed as many as 95 percent of cybersecurity issues can be traced back to this. Mistakes can range from losing devices to IT misconfiguration or inadvertently sending sensitive details directly to hackers.

Technical solutions can help address these issues, but they can’t stop them completely. Therefore, comprehensive user education must be a central pillar of any data loss prevention strategy. The key to getting this right is to make it an ongoing process and ensure there are multiple learning methods and follow-up checks used to ensure all rules are being followed. 

Educating employees about their responsibilities and teaching them how to spot the telltale signs of common threats like phishing attacks helps to reduce these risks and ensure all employees are behaving properly.

Failing to fix known vulnerabilities is another common issue for businesses. In fact, a recent study by Verizon found that in 2024, the number of breaches linked to known vulnerabilities almost tripled from the previous year, accounting for 14 percent of all data loss incidents. An effective patch management program is the key to reducing these risks.

Full monitoring of all network traffic is essential in spotting threats that have already penetrated a firm’s perimeter. This can alert security teams when unauthorized personnel are trying to access restricted data. Meanwhile, dedicated endpoint security solutions such as anti data exfiltration (ADX) immediately prevents any unauthorized attempts to remove data from a network.

Larger firms in particular may struggle to keep on top of the growing volumes of data today’s digital activities generate. Therefore, automation solutions will be essential in providing support at the scale necessary. For example, ADX solutions automatically block any suspected data exfiltration attempts as soon as they occur, without the need for a human to review and approve these actions.

The above best practices can be achieved with the help of dedicated DLP solutions. However, there are a range of options available for this, each with its own pros and cons. Some are dedicated to securing cloud computing services, while others should be deployed across mobile endpoints to guard against data exfiltration. Understanding what these choices are, as well as their benefits and limitations, is critical.

As well as the right training and operational practices, you need the right cybersecurity technology tools to prevent data loss. There’s no one silver bullet to achieve this – instead, you need to take a defense in depth approach that covers everything from initial perimeter protection through to blocking data exfiltration attempts.

However, there are a few types of solutions that promise to play a key role in data loss prevention. It’s vital you understand how these work and what their limitations are in order to understand what they should fit into your strategy.

Endpoint detection and response (EDR) tools monitor every action taken on network endpoints in real-time. They spot potential infections such as ransomware that aim to steal data and shut them down before they have a chance to succeed. These tools work across desktop and laptop PCs, smartphones and even Internet of Things devices.

DLP software aims to prevent data leakage by classifying a firm’s data and constantly monitoring how it is used. This is useful for gaining better visibility into where your information is and who is accessing it. However, while they can be very useful for guarding against accidental data leaks, DLP tools are often less effective at dealing with malicious threats. This is because they are a reactive solution that may not be able to keep up with the latest attack vectors.

Like EDR, ADX solutions sit on the endpoint. However, there are some key differences. Their primary focus is to monitor all outgoing traffic looking for potential data theft 24/7. Using behavioral analytics and machine learning to build a full picture of a business’ normal activity, this technology can study data traffic, destinations and users to identify and automatically block any suspicious data transfer. Because they are not dependent on traditional methods like signature matching, they are much more effective at spotting data exfiltration attempts in progress than other tools.