Sensitive information is integral to our personal lives, businesses, and even national security. It’s critical to healthcare, financial matters, and more. However, it’s also data that, if exposed or mishandled, could lead to significant harm to the data subjects and the company that was breached. Risks range from identity theft and personal danger to financial loss, reputational damage, and threats to national security.
As our sensitive personal information becomes increasingly digital, it has become a legal necessity to protect it. To do so, companies need to understand the various types of sensitive information, how to protect it, how to respond to breaches, and how to comply with data privacy regulations.
What is sensitive personal information?
Sensitive personal information, also known as SPI, refers to data that, if exposed or mishandled, risks greater harm to an individual or organization. This type of information requires a higher level of protection compared to general personal information.
Sensitive personal information often includes:
- Social Security numbers (SSNs)
- credit card and banking information
- health records and genetic data
- information regarding racial or ethnic origin
- biometric data, such as fingerprints or facial scans
- sexual orientation or religious beliefs
Under many data privacy laws, all personal information belonging to children is categorized as sensitive by default, with more stringent requirements for consent and use. The sensitive classification is essential for determining which data handling practices and legal obligations apply for appropriate privacy and security.
The differences between personal information vs. sensitive information
It can be tricky to distinguish some kinds of personal information from sensitive information, but understanding the difference is essential for implementing appropriate protections. The distinction lies in the impact of exposure.
- Personal information is any data that, alone or combined with other data points, can identify an individual. Examples include names, email addresses, and phone numbers.
- Sensitive information refers to data that requires special handling due to its potentially harmful nature if disclosed, e.g. resulting in discrimination, oppression, identity theft, fraud, etc.
For example, while a person’s name and address are considered personal information, healthcare records, political or religious affiliations, or financial information are sensitive information. Regulatory frameworks like the General Data Protection Regulation (GDPR) often specify this distinction to enforce stronger protections for sensitive data.
Types of sensitive data
There are three main types of sensitive data that are particularly vulnerable to exploitation by hackers and malicious actors. These are:
- sensitive personal information
- sensitive business information
- classified information
We’ve looked at what constitutes sensitive personal information already, so let’s explore additional types of sensitive data.
Sensitive business information
Business Information encompasses data that is critical to an organization’s operations and competitive edge.
- Trade secrets: Confidential business information that provides a competitive advantage.
- Intellectual property: Including inventions, literary and artistic works, designs, and symbols used in commerce.
- Proprietary business information: Internal data that is vital for a company’s strategy and operations.
- Financial information: Including bank account numbers, credit/debit card data, credit history records, and tax filings.
Classified information
Classified information is primarily associated with government and military data and is restricted due to its sensitive nature.
- Classified government documents: Information that is restricted by the government to protect national security.
- Military secrets: Confidential information related to national defense and security.
It’s important to note that these categories often overlap, and the classification of sensitive data can vary depending on its context and applicable regulations. Organizations typically implement data classification systems to categorize information based on its sensitivity level, ranging from public to highly restricted.
Why is protecting sensitive information important?
Protecting sensitive information goes beyond regulatory compliance. It impacts trust, security, and operational efficiency. The reasons to prioritize this protection are multifaceted and include numerous benefits for individuals, businesses, and governments.
Enhancing personal security
When sensitive personal data such as health records, Social Security numbers, or biometric data is exposed, individuals face risks like identity theft, financial fraud, and even blackmail. Protecting this information helps preserve individuals’ privacy and prevent malicious actors from exploiting their identities. Increasingly, few people would continue to do business with a company that fails to protect information entrusted to it.
Building and maintaining trust
For businesses, trust is currency. Customers are more likely to share their data — including to make purchases — and interact with organizations that demonstrate a commitment to safeguarding sensitive information. Companies with data minimization and protection practices often enjoy higher customer loyalty and a better reputation in the marketplace.
Strengthening compliance with laws and regulations
Noncompliance with data protection laws like the GDPR, CCPA, COPPA, and HIPAA can result in hefty fines and legal consequences. Properly managing sensitive personal data helps businesses avoid these penalties while maintaining operations and meeting their obligations to protect privacy and provide transparency.
Mitigating financial losses
Data breaches are expensive, both in terms of immediate costs and long-term impacts. Expenses may include fines, litigation costs, compensatory payments to affected parties, and the expense of overhauling security systems. There can also be ongoing, resource-heavy requirements like regular auditing and reporting. Preventive measures significantly reduce the likelihood of these losses.
Enhancing operational resilience
Sensitive information fuels critical operations, from customer service to medical treatment to financial management. Protecting this data keeps operations running smoothly, even in the face of attempted cyberattacks. Downtime caused by breaches can lead to cascading disruptions that affect productivity and profitability.
Preserving national security
Governments rely on the confidentiality of classified information to maintain security and stability. Exposing sensitive government or military data can lead to geopolitical risks, compromise public safety, and threaten critical infrastructure.
How various data privacy laws address sensitive information
Data protection laws worldwide seek to protect sensitive information by providing clear guidelines for its collection, processing, storage, and destruction. Here’s an overview of key regulations and their approaches to sensitive data.
The General Data Protection Regulation (GDPR)
The GDPR is widely regarded as the gold standard for data protection. It introduced stringent measures to protect personal data, particularly “special category data,” which includes health, racial origin, and biometric information. It also enforces strict rules for how that information is handled.
- Consent: Explicit consent is required before processing sensitive data so that individuals are fully informed.
- Data minimization: Organizations may only collect data that is strictly necessary for the stated purpose to reduce the risk of overcollection.
- Transparency: Individuals must be told how their sensitive data is collected, processed, and shared.
- Breach notification: Data breaches involving sensitive information must be reported to authorities and affected individuals within 72 hours.
The UK GDPR
When the UK left the EU, it implemented its own version of the GDPR, which aligns closely with the original but includes UK-specific updates. This law encourages robust protection for sensitive data while adapting to the needs of UK citizens and businesses. It includes requirements for handling.
- Special category data: Data such as health records, genetic information, and political opinions are subject to stricter handling requirements.
- Data Protection Impact Assessments (DPIAs): DPIAs are required for processing high-risk sensitive data to evaluate potential impacts on privacy.
- Children’s data: Organizations must take extra precautions to securely and transparently process sensitive data about children.
Switzerland’s Federal Act on Data Protection (FADP)
Switzerland’s updated Federal Act on Data Protection (FADP) aims to ensure that sensitive personal data is handled with an emphasis on security and transparency. This law is particularly notable for its strict regulation of international data transfers, reflecting Switzerland’s commitment to high data protection standards. There are several key provisions.
- Sensitive personal data: Includes information on health, religious beliefs, and racial origin, and requires informed, voluntary consent from the data subject.
- Right to access: Individuals can access, correct, or delete their sensitive data, ensuring transparency and control.
- Cross-border data transfers: Transfers are only allowed to countries with comparable levels of data protection.
California’s Privacy Rights Act (CPRA)
Expanding on the earlier California Consumer Privacy Act (CCPA), California’s Privacy Rights Act (CPRA) strengthens the privacy rights of California residents. It emphasizes protecting sensitive personal information (SPI), including health and financial data, by introducing stricter rules around its usage. There are several key provisions.
- Sensitive personal information (SPI): Introduces specific rules for handling SPI, which includes health, financial, or biometric data.
- Right to limit use: Consumers can restrict businesses from using their SPI beyond what is necessary for service delivery.
- Data minimization: Requires businesses to collect and use only data that is necessary for their purposes.
Personal Information Protection and Electronic Documents Act (PIPEDA)
Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) governs how private sector organizations handle personal data, including sensitive information. While it is less prescriptive than the GDPR, PIPEDA places a strong emphasis on meaningful consent and accountability with its requirements.
- Consent: Organizations must obtain clear and informed consent before collecting sensitive information.
- Accountability: Businesses are accountable for protecting sensitive data and ensuring that third parties comply with privacy rules.
- Access rights: Individuals have the right to know how their data is used and request access to their personal information.
Australia’s Privacy Act (APA)
Australia’s Privacy Act (APA) protects personal information, including sensitive categories such as health and criminal records. It applies to businesses and government agencies, promoting transparency and accountability in data handling. There are several notable aspects.
- Sensitive information: Covers health, biometric, and political data, and requires explicit consent for its collection.
- Privacy policies: Organizations must clearly explain how sensitive data is collected, stored, and used.
- Data breach notification: Breaches involving sensitive data must be reported to affected individuals promptly.
South Africa’s Protection of Personal Information Act (POPIA)
South Africa’s POPIA aims to protect individual’s rights to privacy while keeping information accessible when legally necessary. It establishes specific rules for processing sensitive personal data, such as health or biometric information, while prioritizing fairness and accountability.
- Sensitive data: Processing sensitive information requires specific justification and compliance with POPIA’s conditions.
- Consent and security: Organizations must obtain clear consent and use robust security measures to protect sensitive data.
- Rights of individuals: Individuals can request access to or correction of their sensitive data.
Understanding these laws is essential for businesses operating across multiple jurisdictions. By adhering to these regulations, organizations can protect sensitive information, build trust, and avoid penalties.
Best practices to protect sensitive data
Protecting sensitive information requires a holistic approach that combines technical, organizational, and human-focused measures.
Implement encryption
Encrypt sensitive data both while it is at rest and in transit. Encryption encodes data, making it appear scrambled and unreadable to unauthorized users. Encrypting databases helps ensure that even if a system is breached, the stolen data remains inaccessible.
Using algorithms for advanced encryption standards is essential, and securely managing your encryption keys is also crucial to maintaining data protection.
Employ robust access controls
Adopt role-based access controls to restrict access to sensitive information based on job responsibilities. Multifactor authentication adds an extra layer of security, making it much more difficult for unauthorized individuals to access critical systems.
Develop a data classification system
Categorize data by sensitivity levels (e.g., public, internal, confidential, restricted). This enables organizations to prioritize protections for the most critical information.
Train employees regularly
Human error is a leading cause of data breaches. Provide ongoing training to educate employees about phishing threats, password hygiene, and secure data handling practices.
Monitor and audit systems
Conduct regular security audits and deploy monitoring tools to detect unauthorized access or unusual activity in real time. This proactive approach helps identify vulnerabilities before they can be exploited.
Secure backups
Maintain encrypted backups of sensitive data in offsite or cloud-based storage solutions. Regularly test backup restoration processes to check reliability in case of data loss or ransomware attacks.
How to respond to a data breach involving sensitive information
An effective response plan helps minimize the impact of a data breach and demonstrates accountability. Quick and decisive action can limit damage, help restore trust with customers, and show proactivity to regulators.
Immediate containment
- Isolate affected systems: Quickly identify compromised systems and/or accounts and disconnect them from the network to prevent further impact from the breach.
- Activate your response team: Bring in your pre-designated incident response team (IRT) to manage the situation. This group should include IT experts, legal advisors, and communications personnel to handle the breach quickly and efficiently.
Assess the impact
Determine what data was accessed or stolen and how the breach occurred. Assess whether sensitive data, like personal or financial information, was involved, and, if relevant, where the affected data subjects are located to determine which laws’ requirements need to be followed. Knowing whether PII, health records, or financial data were compromised will help prioritize the next steps and regulatory compliance.
Notify stakeholders
Timely notification is critical. Inform affected individuals, relevant regulatory bodies, and any other stakeholders. Comply with breach notification requirements specified in laws like the GDPR or HIPAA.
Conduct a forensic investigation
Analyze the breach to identify vulnerabilities and determine whether malicious actors are still active. Use the findings to recover data if possible and strengthen security protocols.
Implement recovery measures
- Patch any vulnerabilities identified during the investigation.
- Strengthen access controls and implement new safeguards as needed.
- Provide support to affected individuals, such as offering credit monitoring services if financial data is exposed.
Rebuild trust
Following a breach, transparency is key. Keep customers and stakeholders informed about what happened, how you’re responding, and the steps you have taken or will take to prevent future breaches. Then, take proactive measures, like security audits or implementing new safeguards, to rebuild trust and demonstrate your commitment to protecting data moving forward.
The risks of sensitive data exposure for companies
Exposing sensitive information poses significant risks for businesses, with consequences that extend beyond immediate financial losses.
- Financial repercussions: Data breaches often result in regulatory fines, litigation, and compensation payments. For instance, GDPR penalties can reach up to EUR 20 million or 4 percent of annual global turnover, whichever is higher. Additionally, businesses face costs associated with incident response, remediation, and lost revenue.
- Reputational damage: Public perception can plummet following a data breach. Customers lose trust in companies that fail to protect their data, often choosing competitors instead. The long-term reputational damage and loss of customers, advertisers, and others may be more costly than immediate financial penalties.
- Operational disruption: Breaches typically disrupt normal operations. IT teams may need to focus on containment and recovery, diverting resources from other business functions to do so. Longer-term, resource-demanding audits or reporting may be required. This downtime can impact productivity, service delivery, and profitability.
- Legal consequences: Failure to comply with data protection laws can lead to lawsuits, regulatory sanctions, and even criminal charges for gross negligence. Businesses operating in multiple jurisdictions may face complex legal challenges.
- Loss of intellectual property: For companies relying on trade secrets and proprietary information, data exposure could erode their competitive edge. Losing intellectual property to competitors or cybercriminals can undermine long-term growth and profitability.
How Usercentrics Consent Management platform can help protect your company’s sensitive information
Sensitive information is a critical part of business, but managing it comes with significant challenges. It’s not just about avoiding fines or meeting legal requirements. It’s about treating privacy as foundational to how your organization operates. Whether you’re dealing with personal data, business secrets, or compliance with privacy laws, handling sensitive information properly helps to protect both people and organizations from unnecessary risks.
A consent management platform (CMP) like Usercentrics CMP can help you with sensitive data protection measures by enabling you to manage and document user consent transparently. It reduces the risk of unauthorized access or misuse by limiting the data you have to only that which is necessary and consented to. In the event of a complaint or regulatory inquiry, it also enables you to provide a clear audit trail of users’ consent history.
Additionally, a CMP streamlines compliance with regulations like the GDPR, which mandate strict safeguards for sensitive data. By automating processes like cookie consent and data access requests, Usercentrics helps businesses minimize vulnerabilities and demonstrate accountability. In short, a CMP makes it easier to maintain trust while keeping sensitive information secure.