Why is Data Retention Necessary?

Now we know that what is data retention, let’s explore its important also. Data Retention is important for following reasons that are as follows:

• Legal compliance: Many industries and educational institutions are legally bound to keep the records for a certain period. Maintaining and organizing data is essential to ensure an organization follows the rules and laws that apply to it. This helps the organization avoid getting into trouble with the law.
• Audit and Accountability: Organizations retaining required data go through the audit process smoothly. It creates a record of information that can be checked to see if the company is doing what it’s supposed to and following the rules.
• Business and Decision-making: Data plays a significant role in learning from past mistakes and analyzing future market trends; it leverages an organization’s decision-making process.
• Customer Relationship Management: Retained customer data enables organizations to understand their clients better. This, in turn, facilitates personalized services and helps identify valuable customers, improving customer satisfaction and loyalty.
• Resilience to Data Loss: Retaining essential operational data ensures businesses can recover quickly in the face of data loss or system failures. It supports business continuity and minimizes loss.
• Security incident investigation: In a security breach or cyber attack, retained data can be crucial in identifying potential sources and helping strengthen the system.
• Compliance with Financial Regulations: Industries must retain financial records for audit purposes, especially in finance. This ensures transparency and compliance with financial regulations.

How Long is a Data Retention Period?

Data retentions periods are different for each type of data, depending on the purposes of data collection and the relevance of the data for the purposes. Legal requirements sometimes stipulate that the minimal amount is a must, like with regulations such as HIPAA mandating that the medical record histories must be maintained for a period of 6 years. At the same time, corporations have own interests – for example, keeping business records may be necessary for tax purposes (often minimum 7 years) or purchase data (previous years). In addition to the quality of the data, the “natural life” of the data also matters: data from a social media post may only be useful for a short period of time whereas historic sales data may be valuable for a long time. In addition, companies should strive to keep good balance between getting compliant, data minimization and rational of business for choosing acceptable retention periods.

Data retention refers to the practice of storing and maintaining data, typically in a digital format, for a specific period. This concept involves determining how long different types of data should be preserved and ensuring compliance with legal, regulatory, or organizational requirements.

In this article, we will explore What is Data Retention, different data retention policies, and also, How can modify data retention policy.