Microsoft Security, Compliance, and Identity Fundamentals (SC-900) Practice Exam

Sensitivity labels play a crucial role in Microsoft's information protection strategy by allowing organizations to classify and protect their data based on its sensitivity level. When applied to documents, sensitivity labels can indeed enable encryption, providing an additional layer of security for sensitive information.

When a sensitivity label is assigned to a document, it can automatically apply encryption to the contents, ensuring that only authorized users who possess the appropriate permissions can access and read the document. This functionality is particularly useful in maintaining data confidentiality, complying with regulations, and preventing unauthorized access.

Additionally, these labels can also integrate with Microsoft Information Protection to enforce policies that dictate how data is handled, shared, and secured. This capability extends to both internal users and scenarios involving external sharing, enhancing overall data governance.

In summary, the ability of sensitivity labels to encrypt documents supports organizations in safeguarding sensitive information while ensuring that its accessibility aligns with their compliance and security strategies.