Meet Data Residency Requirements with Protecto

As the world's governments are establishing regulations around data residency, the task of managing and transferring data is becoming increasingly complicated for businesses. These regulations impose restrictions on where personally identifiable information (PII) can be stored and processed, as defined by the governing bodies. This makes it more difficult for companies to effectively manage their data while also complying with these regulations.  

Meeting data residency requirements is hence extremely crucial to maintaining compliance.

What is data residency

Data residency refers to the physical or geographical location where data is stored or processed. It is the practice of ensuring that sensitive or confidential data remains within specific jurisdictions or regions due to legal, regulatory, or contractual requirements. Data residency may be mandated by data protection laws or industry regulations, and it is often a critical consideration for organizations that handle sensitive data, such as financial information or personal data.  

Numerous data privacy laws and regulations, such as the European Union's General Data Protection Regulation (GDPR), Brazil's General Data Protection Law (LGPD), and the Canadian Personal Information Protection and Electronic Documents Act (PIPEDA), now specify data residency requirements. Other nations, including Australia and Korea, have similar laws, and new regulations are emerging every year.

By ensuring that data residency requirements are met, organizations can comply with relevant laws and regulations and safeguard the privacy and security of their customers' data.

What drives the need for data residency

In some countries, data residency requirements mandate that the personal data of their residents must be stored locally. This poses a challenge for companies that operate in that region and need to share data containing personal information between their employees operating in different countries or even with their partners that are not geographically co-located with the company’s main location. Violating these laws can lead to significant legal and financial consequences for the company.

It may also be possible for organizations to have contractual obligations with their clients which necessitate the storage or processing of data in a particular geographical area. This requirement may be specified by businesses or government entities, indicating that certain data must be stored or processed in a designated location.

Protecto is a solution that addresses this challenge by identifying PII data and replacing it with unidentifiable, tokenized data.  

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Interesting read: Everything You Need To Know About Data Privacy Vault

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What is tokenized data?

Tokenization of data is the process of converting sensitive data into a unique identifier or "token" that is meaningless without the context of the original data. This process is commonly used in data security and privacy to protect sensitive information such as credit card numbers, social security numbers, passwords, date of birth, email address, and more.

Tokenization can help with data residency requirements by allowing organizations to store sensitive data in a particular geographical location without violating data residency laws or regulations.  

During tokenization, the sensitive data is replaced with a non-sensitive, system-generated token that is used to represent the original data. This token can then be used for data processing, storage, or transmission, without revealing the original data. This tokenized data can also be safely shared with others outside the region since it does not contain any PII data. This ensures that companies comply with local laws and regulations related to data privacy.

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The tokenized data can be used for routine operations, such as data analysis or processing, without the need to move sensitive data across borders. This way, the organization can meet data residency requirements while maintaining the data's confidentiality and integrity.

The Protecto advantage

What sets Protecto apart from other masking tools is its “Intelligent tokenization”. Protecto's tokenization is designed to preserve the functionality of the data, which means that companies can still run complex analytics and use tokenized data. On the other hand, if they use other masking tools, the masked data may be unusable.

For instance, if a company masks the entire description of a support ticket, a support agent may not be able to understand the problem and provide an effective solution. Protecto's intelligent tokenization, on the other hand, only replaces the PII data and leaves the rest of the comment intact. This way, a support agent can still understand the problem and provide appropriate assistance.

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In terms of the data residency laws, Protecto enables companies to safely send masked data to their global partners and, when necessary, re-identify the data only for authorized individuals and systems within the region. This way, companies can ensure compliance with local data privacy laws while still sharing data with their global partners.

Protecto's Privacy Vault is a powerful tool that can assist you in meeting current and future legislative requirements, whether you are preparing to enter a new market or already managing data residency laws. To learn more about how it can benefit your organization, request a demo of Protecto Privacy Vault, or sign up for a free trial account.

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Also read: Protecto Launches Groundbreaking Privacy Vault To Help Companies Take Control Of Their Sensitive Personal Data

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Frequently asked questions

What are data residency requirements?

A: Data residency requirements refer to regulations or policies that dictate where data should be stored and processed. These requirements aim to protect data privacy, security, and sovereignty by specifying that certain data should remain within specific geographic boundaries or jurisdictions.

How can data tokenization help meet data residency requirements?

A: Data tokenization can help meet data residency requirements by replacing sensitive data with tokens, allowing organizations to store and process data within specific jurisdictions while minimizing the storage and processing of actual sensitive data. This ensures that sensitive information remains within the required boundaries.

Does data tokenization ensure compliance with data residency regulations?

A: While data tokenization can contribute to compliance with data residency regulations, it should be used in conjunction with other appropriate measures. Tokenization helps minimize the exposure of sensitive data, but organizations should still consider additional factors such as data storage location, data transfer mechanisms, and any specific requirements outlined by the regulations.

Can tokenized data be stored or processed outside the designated jurisdiction?

A: Tokenized data itself does not contain sensitive information, so it can be stored or processed outside the designated jurisdiction without violating data residency requirements. However, organizations should ensure that the mapping between tokens and original data remains within the specified jurisdiction to maintain compliance.

Is data tokenization suitable for all types of data when addressing data residency requirements?

A: Data tokenization is applicable to various types of sensitive data, such as personally identifiable information (PII), financial data, or health records. However, organizations should assess the specific requirements and sensitivities of their data types to determine if tokenization is appropriate for meeting data residency requirements.

How often should data tokenization be reviewed and updated to meet evolving data residency regulations?

A: Data tokenization should be reviewed and updated regularly to align with evolving data residency regulations. It is essential to stay informed about any changes or updates in the regulations to ensure ongoing compliance. Regular assessments and audits of tokenization processes can help identify and address any gaps or updates needed to meet the evolving requirements.

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