Data Security Management: What It Is, Why It Matters, and Best Practices

Your data is one of your most valuable assets.Today, having actionable data is critical to making better decisions, developing innovative ideas, and growing your business. But data is also becoming more and more attractive and valuable to bad actors who seek to steal and sell information about your company or your customers. 

From global financial institutions to local mom-and-pop shops, no company is immune to the threat of data breaches. As data becomes a more valuable asset on the black market and hackers come up with increasingly sophisticated ways to steal data, it’s critical that each company considers how and why they need to securely store, share, and manage their data. This is where data security management steps in to provide a comprehensive approach that ensures that sensitive information remains safe from unauthorized access, breaches, or misuse. 

For your business, this is not just about avoiding risk. It’s about maintaining your operational integrity and the trust of your customers and stakeholders. In this article, we’ll define data security management and examine how companies can develop and implement effective practices to keep information safe.

What is data security management?

Data security management refers to the processes, tools, and policies designed to protect data from being stolen, corrupted, or accessed without permissions. It includes your company’s proprietary business data and customer information. 

Some basic components of data security management include: 

• Access Control: Restricting who can view or use the data.
• Encryption: Encoding data to keep it safe from unauthorized access.
• Data Backups: Making copies of data so you can recover it if it’s lost or compromised.
• Monitoring and Auditing: Tracking who has accesses data and looking for irregular activity.
• Incident Response Plans: Preparing for quick action during security events.

Your company should do everything possible to prevent bad actors from hacking in and stealing information as well as prevent human errors from accidentally exposing private data. This way, effective data security management protects your business from financial losses, legal penalties, and damage to its reputation. Some data is required to be securely managed in accordance with industry and state laws and regulations, like: 

• the California Consumer Privacy Act (CCPA)
• the European Union’s General Data Protection Regulation (GDPR)
• the Health Insurance Portability and Accountability Act (HIPAA)
• the Payment Card Industry Data Security Standard (PCI DSS). 

Overall, data security management is about maintaining trust in your data. Any data breach can disrupt your operations and erode customer trust. By actively managing data security, your organization can minimize risks and ensure it complies with industry regulations.

Why data security management is important

As a business, you’re gathering a ton of information. Some of it relates is about how your business operates, including private details on your financials, product development, and growth plans. Even though this information isn’t regulated by law, you wouldn’t want competitors to have it and use it for their own gain. 

Other data is even more sensitive. Customer information, including personally identifiable information (PII) or financial details like credit card numbers must be carefully managed. This kind of data could be exploited by criminals to steal from, harm, or manipulate people. That’s why customer data management is tightly regulated by government agencies around the world. 

This is where data security management becomes essential for your company. You need to establish a framework that includes tools and processes to safeguard sensitive information against cyber threats. The framework should be a cornerstone of your business operations. Here are a few reasons why it matters:

• Trust. Customers expect their personal information to remain secure. A single data breach can severely damage your reputation and erode trust.
• Business continuity. Security breaches can disrupt operations, causing costly downtime. Proactive data security helps keep business running smoothly.
• Compliance. Many industries enforce strict data protection standards, and failing to comply can result in significant financial penalties.

How Data Security Management Works

There are many different ways companies can approach data security management. Each offers different benefits depending on the type of information collected and stored. However, all methods share common elements that form the foundation of data security management. In general, each data security management approach includes these components: 

• Encryption
• Access control
• Monitoring
• Response plans

In practice, this might look like an e-commerce company using secure tools to capture and manage credit card information and storing it in a way that can’t be read without an encryption key. The company has tools to ensure secure transactions and limit or restrict access to sensitive data. 

The company likely has other tools to monitor how data is being accessed, look for vulnerabilities, and flag unusual activity. If a breach does occur, it will have a response plan to contain the issue and notify affected customers that their data may have been compromised. 

This fictional example company, like all companies, continuously evaluates its data practices, updating its tools and processes to meet emerging threats and adopt the latest best practices.

Biggest data security threats

There are a lot of ways data can get out. These security threats can have a big impact on your business and your customer data, so it’s important to understand what they are and how they can harm your company. Here are some of the most significant data security threats:

Phishing attacks

In this type of threat, a cybercriminal sends deceptive emails or messages that look like they’re from trusted sources. These messages trick people into revealing personal information or clicking on malicious links. Cybercriminals might send users to a fake website and ask for real credentials they can steal or pose as a boss asking for gift cards. These attacks often create a sense of urgency, pusing people to act quickly without thinking through the request.

In 2015, an employee at an Anthem subsidiary—a healthcare management company—clicked on a phishing link. This gave hackers access to patient data and led to Anthem paying $115 million in a class-action lawsuit years later. 

Ransomware

This is where malicious software encrypts a victim’s data, rendering it inaccessible until a ransom is paid. Ransomware attacks are becoming increasingly common with large and public institutions, with many healthcare organizations paying ransoms to get access back to their critical data. 

In 2024, hackers accessed Change Healthcare information and held the systems hostage until a ransom was paid. This impacted pharmacy operations across the United States, making pharmacies unable to send and access insurance claims for nearly a week before the ransom of $22 million was paid to regain access to the system. The hackers were able to infiltrate through a tool that did not require multi-factor authentication.

Insider threats 

An insider threat, as the name implies, refers to an employee or associate with access to sensitive data who may intentionally or unintentionally cause data breaches. An unintentional breach could be as simple as an employee accidentally sharing PII through a screenshot. 

Malware

Malware is software designed to harm or exploit systems. It can steal data, disrupt operations, or provide unauthorized access to attackers. Home Depot had a data breach where bad actors installed malware on their point-of-sale system, allowing the hackers to steal payment information from customers for five months. 

Denial-of-service (DoS) attacks

This security threat occurs when attackers overwhelm a system, server, or network with excessive traffic, making legitimate services unavailable. 

SQL injection

Attackers exploit vulnerabilities in applications to execute malicious SQL (Structured Query Language) statements, gaining unauthorized access to databases. 

Zero-day exploits

Attackers target software vulnerabilities that are unknown to the vendor, exploiting them before patches are available. 

Social engineering

This type of attack involves manipulating individuals into divulging confidential information through psychological tactics.

Types of data security

There are many ways to approach data security, but most have common building blocks. Let’s look at the steps companies can take for effective data management in cyber security. 

Access controls

Access controls are all about ensuring that only authorized people can access sensitive data. This includes tools like role-based access controls (RBAC), where employees only have access to the data necessary to perform their jobs. For example, a customer service representative might see a customer’s name and order history but not their payment information.

By limiting access in this way, businesses can reduce the risk of insider threats or accidental data exposure. Access controls also include measures like two-factor authentication (2FA), where users verify their identity using something they know, like a password, and something they have, like a code sent to their phone.

Data auditing

Data auditing regularly reviews how data is used, who’s accessing it, and whether it’s being handled properly. This process can take a lot of different forms but often includes checking sensitive files to ensure they are encrypted, looking at who accessed them, and having tools and processes in place to quickly flag anomalies (e.g., repeated unauthorized access attempts). 

For example, if an employee suddenly accesses thousands of records they don’t normally work with, a data audit could catch that unusual activity early, preventing a potential breach.

Network security

Network security involves protecting the systems that connect all your devices and data. Tools like firewalls, intrusion detection systems, and virtual private networks (VPNs) work together to keep unauthorized users out.

One common way this is deployed is using a VPN to ensure employees working remotely can securely access internal systems without exposing sensitive data to cyber threats on public Wi-Fi.

Endpoint protection

Endpoints are devices like laptops, smartphones, or servers that connect to your network. Endpoint protection ensures these devices are secure, even if they’re outside the controlled environment of the company.

This could involve using antivirus software, mobile device management (MDM) tools, or encryption on laptops. For instance, if an employee’s laptop is stolen or lost, endpoint protection would ensure sensitive company data stored on the device remains inaccessible.

Best practices for implementing data security management

If you need to develop or improve your data security management, you’ve come to the right place. Let’s look at some of the tools and processes your company can implement to protect your sensitive and private information. 

First, ensure you control who has access to what data. Not everyone in your company needs to know everything. By implementing access controls and user authentication, you ensure data is properly segmented. 

• Multi-factor authentication tools (MFA) can help control access. Setting up user roles and requiring two authentication steps before accessing potentially sensitive information protects you in two ways:
  1. It ensures employees only access the data they have permission to see and prevents those who don’t need sensitive data in their daily roles from accidentally gaining access. 
  2. Deploying MFA makes it much harder for bad actors to steal login credentials and access internal systems. 

Next, establish secure encryption for your sensitive data. Ensure you have transport layer security (TLS) encryption to keep data secure while it is moving (commonly referred to as “in flight”). You also need data encryption for stored data (commonly referred to as “at rest”). Use robust encryption algorithms like AES-256 for maximum security. You can often use tools from your cloud system if you’re storing data in the cloud, or you can purchase other encryption tools that will best meet your needs.  

Finally, make sure you regularly update and patch your security systems. 

Cyber threats evolve rapidly. Regularly updating software and applying security patches addresses vulnerabilities before attackers can exploit them. There are many tools available for patch management and vulnerability scanning to identify known threats or needed patches. 

Then, make sure your employees are informed. Educate them about phishing scams and make sure they know how and where they originate. Teach them about the importance of data security and help them keep that information top of mind. Develop best practices for password management and ensure all employees understand how and why these practices matter. Be prepared for how you will respond to a breach with a clear plan to contain and recover from security incidents, including notifying stakeholders and conducting post-incident reviews to improve processes.

Your data is essential, and it’s equally important to develop the processes and get the tools you need to keep it secure. Domo has enterprise-level security helps protect your data and can easily integrate with your current security tools to ensure that your data is protected across the entire data lifecycle. Learn more aboutDomo’s data security features.