# Data classification · Glossary
The practice of labelling data according to its sensitivity, regulatory status or business criticality, so that handling rules can be applied consistently.
[Glossary](/glossary) · Data governance and quality

# Data classification

     The practice of labelling data according to its sensitivity, regulatory status or business criticality, so that handling rules can be applied consistently. Typical labels distinguish public, internal, confidential and restricted information, along with categories such as personal or special category data.

## Why it matters

     Access control, retention, encryption and AI usage policies all depend on knowing what kind of data is involved. Without classification, organisations either lock everything down and slow legitimate work, or apply controls unevenly and expose sensitive data.

     Classification is increasingly a prerequisite for AI adoption. Before connecting a language model to internal documents or data, teams need to know which sources contain personal, commercially sensitive or contractually restricted information.

## In practice

     For example, a UK financial adviser network preparing to pilot a drafting assistant might classify its document repositories first, excluding folders with client identity documents and marking suitability reports as restricted, so the pilot only retrieves from approved sources.

## Where Rodan fits

     Rodan builds classification into data and AI platforms delivered through [AI and Decision Systems](https://rodan.io/what-we-build/ai-decision-systems). See also [how to protect sensitive data when using AI tools](https://rodan.io/insights/how-to-protect-sensitive-data-when-using-ai-tools).

## Related terms

- [Personally identifiable information (PII)](/glossary/personally-identifiable-information)

- [Role-based access control (RBAC)](/glossary/role-based-access-control)

- [Data governance](/glossary/data-governance)

- [Shadow AI](/glossary/shadow-ai)

- [Encryption](/glossary#encryption)

- [Data catalogue](/glossary/data-catalogue)

- [Metadata](/glossary/metadata)
HTML: https://rodan.io/glossary/data-classification