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With each visit to a website, transaction, and social network post, users create their digital footprint. In our world connected by technology, all the information used to navigate the web would typically go through the borderless cloud, ending up on servers situated thousands of miles apart from each other.
Yet, the global trend is reshaping the way in which data crosses borders, with governments trying to influence the storage locations of the information produced by their citizens.
Since storing data within national borders is often aimed at improving security and compliance, it’s also important to understand the fundamentals of Cybersecurity and how organizations protect sensitive information.
First of all, people should remember that the “cloud” does not exist in its magical, etheric form, it is comprised of large data centers where there are rows of computer servers.
Previously, companies could store their user’s data anywhere it was cheaper and more convenient to do so. Today, data localization is a system of laws prohibiting this free and borderless movement of data.
The world’s leaders have been actively enacting such regulations since the control of information has come to be equated with sovereignty.
Having sensitive information stored locally prevents the citizens from foreign spying and espionage through cyber security breaches. The nations fear the possibility that the information about their citizens will be available to foreign intelligence agencies if it is stored in another country.
When local authorities carry out investigations on cases of cyber crimes, fraud, or tax evasion, they need prompt access to the evidence, which is available in digital form. If the evidence is stored abroad, then the process may take months due to international legal procedures.
However, all countries do not apply such policies in the same way. There are three major categories:
China and Russia have stringent data localization regulations that prohibit the transfer of personal data across borders.
Some countries have an emphasis on industries that need maximum protection. An example of such regulations is those in India that regulate the payment records and subscriber accounts in the telecom and financial sectors.
Under GDPR, the transfer of data from the EU region is allowed to other countries, provided that those data centers have similar privacy standards in place.
Thus, the new currency of the digital era is the data, and countries are becoming increasingly reluctant to lose it out of their jurisdiction. Although stringent data localization policies may bring additional costs for corporations since they would need to establish data centers locally, these regulations have definite benefits for security and privacy.
