Strategies to Help Ensure Data Residency Compliance

The growing importance of Data Residency means that companies must carefully manage where and how their data is stored to ensure compliance with local regulations. The following strategies provide practical ways to secure data residency, allowing organizations to navigate the complexities of data sovereignty while maintaining robust privacy and security standards.

To meet data residency requirements, organizations can:

• Store Data Locally: Physical store data within the country of origin to help keep it governed by local laws.
• Use Encryption and/or Tokenization: Use a Cloud Data Protection Gateway hosted on-premise to encrypt or tokenize data locally before transmitting it, retaining control and reducing risk of becoming subject to foreign jurisdictions.
• Manage Keys and Token Vaults Locally: Storing encryption keys and token vaults locally ensures sole access to sensitive data, reducing the risk of exposure to foreign jurisdictions and companies.

How Encryption and Tokenization Work To Address Data Residency Issues

Encryption and tokenization are effective measures for securing data, allowing companies to use offshore services whilst reducing exposure to foreign jurisdiction and security risk.

Tokenization

Tokenization allows businesses to keep sensitive data within specific geographic boundaries while still enabling global operations. Instead of transmitting the sensitive data across borders, only the tokens are sent to other locations or third-party service providers. The original sensitive data and the tokenization system (including the token vault) are kept within the required jurisdiction. Since tokens have no inherent value and cannot be reversed to obtain the original data, they can typically be transferred across borders without violating data residency laws.

Encryption

Encryption protects data both when it's stored (at rest) and when it's being transmitted (in transit). This comprehensive protection ensures that even if data crosses borders or is intercepted, it remains secure and unreadable without the decryption keys - which should be stored in the required jurisdiction. This approach effectively masks and secures the data throughout its lifecycle, potentially exempting it from data residency requirements.

Benefits and Advantages of Encryption and Tokenization

Both encryption and tokenization offer valuable benefits for businesses striving to meet data residency requirements whilst reducing compliance scope. Ultimately, the choice between encryption and tokenization (or a combination of both) depends on the specific data residency requirements, the nature of the data being protected, and the operational needs of the business.

Tokenization Benefits

• Data Localization: Tokenization allows sensitive data to be kept within specific geographic boundaries while enabling global operations.
• Reduced Compliance Scope: By replacing sensitive data with tokens, businesses can often reduce the scope of compliance audits and assessments.
• Cross-Border Data Flows: Tokens, which have no inherent value, can typically be transferred across borders without violating data residency laws.
• Demonstrable Compliance: Tokenization provides a clear mechanism for businesses to show they are protecting sensitive data and adhering to data residency requirements.
• Format Preservation: Tokens can maintain the same format as the original data, allowing tokenized data to meet an existing systems data format requirements.
• Protection Against Insider Threats: Even if someone within an organization has access to tokens, they cannot retrieve the original data without access to the tokenization system.

Encryption Benefits

• Data Protection in Transit: Encryption secures data as it moves across borders, allowing for compliant cross-border data transfers.
• Cloud Storage Flexibility: Encrypted data can be stored in various geographic locations while maintaining data privacy and compliance, as the data remains inaccessible without the proper decryption keys.
• End-to-End Security: Implementing end-to-end encryption protects data throughout its lifecycle, potentially exempting it from certain data residency requirements.
• Processing Capabilities: Encrypted data can often be utilized in its encrypted form, allowing for data interoperability in different locations without compromising security.
• Uniform Application: Encryption can be applied consistently across different types of data and systems, making it scalable.

Why You Need a Data Residency Compliance Solution

Disregarding data residency requirements poses significant risks for contemporary businesses. Organizations face potential legal sanctions, including substantial fines, alongside severe reputational damage that can erode customer trust and market position. The expense and complexity associated with retroactively addressing compliance issues can be considerable. To navigate these challenges effectively, businesses must prioritize robust data governance strategies, align with compliant service providers, and implement comprehensive data security practices that adhere to international data residency regulations.

StratoKey’s Data Residency Solutions

StratoKey’s intelligent CASB includes a Cloud Data Protection Gateway, that provides both an encryption and tokenization engine for SaaS and cloud services like NetSuite, Salesforce, Jira, Confluence, and ServiceNow (plus many more). Data remains stored within local services (customer hosted environment) and is substituted and transmitted into any cloud based service, in a secure format such as a token, or encryption. Encryption keys and token vaults remain safely resident in the client's country. By leveraging StratoKey's CASB platform, businesses can implement a comprehensive data protection strategy that addresses data residency concerns while enabling the use of cloud and SaaS applications

Since 2012, StratoKey has worked with clients in healthcare, finance, cybersecurity, manufacturing, education and technology sectors to help manage data residency needs. StratoKey enables organizations that have strict data security and residency requirements to utilize the full potential of the cloud, without compromising security.

Learn more by downloading the StratoKey White Paper or contacting us to discuss your organization’s data residency needs.