What is Data Loss Prevention? | A Complete Guide to DLP Security

Data is the most valuable asset today’s businesses possess – and volumes are growing all the time. According to Statista, there are set to be 181 zettabytes of digital information in use worldwide by the end of 2025. Within this will be a wide range of highly sensitive details, from customer personal and financial information to trade secrets and other vital enterprise intellectual property.

It’s therefore vital that all companies make protecting this data their highest priority. Data loss – whether accidental or as the result of criminal activity – can be hugely damaging to businesses. As well as the financial impact, the reputational damage caused by failing to protect sensitive data can last for many years.

To avoid this and improve their cyber resiliency, firms must have a clear data loss prevention (DLP) strategy in place that covers every aspect of their operations. Understanding what is required and the technology necessary to implement this is essential in keeping information safe in a highly challenging environment.

Data loss prevention (DLP) refers to the tools, technologies and processes needed to prevent the loss or exposure of business information. Specifically, it aims to prevent the inappropriate access, use, sharing or exfiltration of sensitive data.

DLP needs to cover data at all stages – when it is at rest in storage, in use by employees and when it is in transit across the network. Some of the most common causes of data loss that an effective DLP strategy can address include:

• Data exfiltration: The deliberate theft of data by external hackers. This is a common goal of any ransomware attack, with 95 percent of publicly disclosed attacks exfiltrating data in 2025.
• Insider threats: This refers to employees with a grievance against their firm. Insiders may copy and remove data for a number of reasons, including taking company secrets to a new employer, selling data to the highest bidder, or simply cause harm in retaliation for a perceived wrong.
• Negligence: Careless employee behavior that leads to data leaks can range from leaving company devices on a train to accidentally emailing documents to the wrong recipient, as well as falling victim to phishing scams.

The biggest risks of data loss are financial. According to IBM, for instance, the average cost of a data breach in 2024 now stands at $4.4 million. However, this can grow significantly for firms in certain sectors, such as heavily regulated industries.

Healthcare organizations that are subject to HIPAA are especially vulnerable due to the sensitive nature of the data they possess and the large regulatory penalties for failures. IBM’s research found these companies faced the highest costs of any sector, with average data breach expenses reaching $7.42 million, followed by financial services ($5.56 million).

However, almost every business holds some form of personally identifiable information (PII) that will be of value to hackers. Regulations such as GDPR can result in large fines for the exposure of such data, in addition to the severe reputational damage that poor data handling can result in.

Data loss prevention combines people, processes and technology to spot risky activity, apply controls and prove compliance. Effective DLP follows a repeatable lifecycle that understands data context, watches how it moves, enforces policy and documents outcomes for oversight and improvement.

Key steps in this process include:

• Identify and classify: Locate sensitive data across endpoints, cloud and on-prem systems, then label it by type and risk level to drive policy decisions.
• Monitor: Track access, movement and usage in real time to flag anomalies such as unusual downloads, after-hours activity or atypical destinations.
• Enforce controls: Apply policy wherever data is accessed and used with measures like principle of least privilege, multifactor authentication (MFA), encryption and anti data exfiltration (ADX) to automate the blocking of suspicious traffic.
• Document and report: Capture detailed logs, alerts and outcomes to support audits, incident response and continuous tuning of policies.
• Review and improve: Regularly assess coverage, false positives and business impact to refine classifications, rules and user training.

In order to put these principles into practice, there are a range of steps that should be taken. These can be broadly split into two categories – technical solutions and process-driven efforts that focus on the human factors that may lead to data loss. Key things to take into account include:

Technical solutions:

• Encryption: Secure data in transit and at rest.
• Endpoint protection and ADX: Detect and block unauthorized data transfers.
• Cloud and application monitoring: Prevent misconfigurations and control data sharing.
• Access controls and MFA: Enforce least privilege and strong authentication.
• Backups and recovery: Maintain secure, tamper-proof copies for quick restoration.

Process-driven efforts:

• Clear policies and processes for data handling: Define how data should be accessed, used and stored.
• Employee training: Raise awareness of phishing and data handling risks.
• Regular access reviews: Adjust privileges during onboarding, role changes and offboarding to ensure old accounts are removed and only necessary privileges are applied.
• Incident response planning: Establish clear steps and responsibilities for quick containment.
• Vendor management: Assess and monitor third-party data security and any suppliers or partners with access to company information or systems.
• Data retention and disposal: Keep only necessary data and securely erase the rest.

Implementing a comprehensive data security management strategy is easier said than done. One of the biggest challenges is the scale of modern business networks. With vast amounts of data being accessed from potentially tens of thousands of endpoints – many of which may be invisible to IT teams – it can be hugely challenging to bring networks under control.

Another issue is striking the right balance between security and usability. While tools such as encryption, access management and anti data exfiltration technology are vital, care must be taken not to disrupt day-to-day operations through issues like false positives or overly restrictive policies.

Ensuring policies are being enforced can also be tricky, especially in large organizations where employees may be connecting remotely or on personally-owned devices. Close behavioral monitoring of activity is therefore a must to keep track of users at all times.

Simply having the right tools and technologies in place is not enough to guarantee protection against today’s complex and evolving threats. Following these best practices will be crucial in ensuring that any DLP strategy is implemented effectively.

• Have a complete picture of your data: Firms can’t protect what they can’t see, so it’s vital to conduct a full audit to identify what information the business possesses, where it is stored and which should be the highest priority.
• Ensure everyone takes responsibility: Data protection isn’t just the responsibility of the cybersecurity team – it’s up to everyone to play their part. Staff training must emphasize this as a priority.
• Regularly review tools and processes: Good patch management is an important part of keeping systems secure. However, efforts shouldn’t stop there, as firms always need to be aware of the latest developments and have the most up-to-date DLP tools to counter the constantly-evolving tactics of criminals.
• Ensure every endpoint is accounted for: Keeping every endpoint under control becomes increasingly difficult as more devices are added to the network. It’s therefore important IT teams have full visibility into every device and are able to install effective software onto them.
• Test systems regularly: Regularly reviewing the capabilities of the firm’s defenses can help spot any gaps, particularly those that might be introduced when new tools are added. This includes techniques such as penetration testing and phishing tests, where employees are sent fake phishing emails to see how they respond.

By following these points, firms stand the best chance of identifying and closing any weaknesses in their networks and ensuring data is secure at all times. Follow this simple checklist as a key starting point and you’ll be well on your way to success:

• Map and classify sensitive data
• Define clear DLP policies and rules
• Deploy tools across endpoints, networks and cloud
• Train employees on secure data handling
• Monitor alerts and refine controls
• Test responses with simulated incidents

With cybercriminals continuing to evolve their tactics, and trends towards double and even triple extortion ransomware showing no signs of slowing down, it will be critical that firms improve their DLP solutions in order to keep up.

Traditional endpoint protection solutions that mainly focus on stopping hackers getting in are no longer enough. In today’s environment, businesses have to assume they have already been breached, so the focus must shift to preventing hackers leaving the network with their prize. This means specialist capabilities such as anti data exfiltration (ADX) will be essential.

At the same time, the use of technology, such as artificial intelligence and automation to study data patterns, learn what normal behavior looks like and step in without human intervention, will be important in ensuring data can be protected without delays, while not disrupting legitimate traffic.