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What is data encryption? 

Data and file encryption is the ability to translate data into another form, or code, so that only people with access to a secret key (formally called a decryption key) or password can read it. Encrypted data is commonly referred to as ciphertext, while unencrypted data is called plaintext. Currently, encryption is one of the most popular and effective data security methods used by organizations.

What is File Encryption Used For?

Businesses, organizations, enterprises, and agencies all have data in need of safeguarding. From a healthcare facility updating a patient’s medical record to a national bank interacting with consumer financial data — a wide range of personal information needs to be shielded from the public eye and must only be accessible to administrators with restricted privileged access.

With data breaches and identity theft on the rise, encrypting files not only means protecting an organization’s reputation and trustworthiness — it means protecting people and their valuable assets. Organizations usually need to encrypt: 

  • Business Operations Data: Files containing client contracts, financial transactions, payment histories, and customer negotiations should be kept secret. Otherwise, lax data security measures can compromise client relationships and cost an enterprise its brand and business.
  • Legal Data: By law, all legal data surrounding ongoing proceedings must be encrypted and protected in all its states, to prevent the case’s outcome from being jeopardized. Moreover, all communications with lawyers, paralegals, business partners, and all other parties to a case must be protected.
  • Human Resources Data: Employers possess a lot of personal data about their employees, including their wage and banking accounts, contractual obligations, contact information, social security numbers, medical documentation, and more. This diverse array of data makes companies a prime target for hackers and malicious internal actors looking to exploit financial and identity-based assets.

What Files Should Be Encrypted?

Data in Transit

Data in this state is on the move. It’s being shared, sent, and transferred back and forth between users and devices. Whether through email communications, video chat platforms, or social media channels, unencrypted data can easily fall into the wrong hands when traveling across the internet.

Data in Use

Data being manipulated or accessed in real-time is highly vulnerable because it’s already in an instantly usable state. One of the greatest threats to data in use is human error, which makes automated encryption solutions crucial. In today’s hybrid on-premises and cloud work environments, such encryption must also be an interoperable process, translating and moving with data as it’s used in different contexts and applications.

Data at Rest

Most organizations have a secure way of archiving confidential files so they are incredibly challenging to access without the proper credentials. However, in doing this, data is left in plain sight behind a locked door that hackers and internal adversaries can learn to bypass. To keep files irretrievable and incomprehensible, it’s best to encrypt them at rest so that, should a breach occur, data is not lost or stolen. In this case, identity access management (IAM) systems and strict privileged access policies are key to warding off cybercriminals harnessing stolen credentials to access private files.