Implementing Data Localisation Policies: A Step By Step Guide

Jul 10, 20244 min read

Data localisation policies refer to regulations that require data to be collected, processed, and stored within specific geographic boundaries. By mandating that data remain within the borders of a particular country or region, these policies aim to enhance data security, protect privacy, and promote national sovereignty over digital information.

Understanding Data Localisation Policies

Data localisation & residency are laws to protect data of a country's citizens. These laws require data about a nation's citizens or residents to be collected, processed, and/or stored inside the country, often before being transferred internationally. Each country decides the scope of its data localisation law such as what kind of data would be considered as PII, which industry will fall under that etc. Here are some examples:

In India data localisation law scope includes all Payment System Data.
In Australia it's the health records.
In Indonesia public services companies must maintain datacenters in the country. The Financial Services Authority in Indonesia requires data localisation for all PII (Personally Identifiable Information) data in a financial services organisation within the country.

Benefits of Data Localisation Policies

Enhanced Data Security : Keeping data within a defined geographic area reduces the risk of unauthorised access and improves security measures.
Compliance and Legal Requirements : Adhering to data localisation laws ensures that organisations comply with regulatory frameworks and avoid potential legal issues.
Support for Domestic Providers : Encourages the growth of local data centers and cloud services, boosting economic development and creating new job opportunities.

Cloud v/s On-Prem - Why do orgs choose the later more?

As a matter of fact organisations which have strict regulatory requirements like banking, financial, healthcare etc always prefer that the data-centers of the hosting provider or clouds are certified by their respective compliances. They do so because it becomes easier for them to answer during the audit and certification process.

Concerns some organizations have with cloud managed services is lack of ownership. You won't be able to access the management systems of these services, you might have experience in services like K8s or RDS. This might raise some eyebrows of regulators during a compliance audit as you won't be able to share who all have access to your infrastructure.

Sometimes cloud providers would not disclose upfront if they are sharing the information with anyone else. Most of their Non Disclosure Agreement(NDA) speak about how customers should not exploit cloud providers IP, however they fail to include vice versa.

In one of my fintech projects we had to add this as a separate agreement that they won't share our data and information without asking us.

So it's always better to go with a certified/proven cloud/datacenter provider if you have such a requirement.

Challenges with an on-premise setup:

Lack of automation tools for bare metal virtualisation platforms needed for infrastructure provisioning which was necessary to achieve the SLA and RTO/RPO benchmarks.
Dynamic on demand disk allocation was impossible since it was all on hardware storage area networks.
To set up a fully automated containerisation platform on a bare metal hypervisor.
Real time data replication between two separate datacenters.

Implementing Data Localisation Policies: A Step-by-Step Guide

Step 1: Assess Regulatory Requirements

Begin by researching and understanding the specific data localisation laws and regulations applicable to your industry or region.
Consult legal experts to ensure compliance with existing mandates and prepare for potential changes in the regulatory landscape.

Step 2: Evaluate Data Handling Practices

Conduct a thorough assessment of your current data handling processes, including data collection, storage, and transfer practices.
Identify areas that may require adjustments to align with data localisation requirements and enhance data protection measures.
Some businesses prefer to choose a self managed model for data localisation, privacy and security regulations. They are basically worried about IP security on systems managed by someone else.
In such a case, you can actually discuss with the cloud provider and get them to clarify their compliance readiness in an agreement. With a little due diligence managed services are recommended for higher benefits like High Availability, Autoscaling, Support & Maintenance.

Step 3: Develop a Data Localisation Strategy

Create a detailed plan outlining how your organization will implement data localisation policies effectively.
Define roles and responsibilities within the organization to ensure seamless integration of the new data governance framework.

Step 4: Secure Data Infrastructure

Invest in robust data security measures, encryption protocols, and access controls to protect sensitive information from unauthorized access or breaches.
Implement data storage solutions that comply with data residency requirements and offer high levels of data protection.

Step 5: Monitor and Review Compliance

Regularly monitor data handling practices and compliance with data localisation policies to address any potential issues promptly.
Conduct periodic audits and assessments to verify that data residency requirements are being met and make adjustments as needed.

Conclusion: Embracing Data Sovereignty for a Secure Future

In an era where data breaches and cyber threats pose significant risks to organizations, implementing data localisation policies is not just a legal requirement but a strategic imperative for safeguarding sensitive information. By following the steps outlined in this guide, professionals can navigate the complexities of data governance, enhance data security measures, and ensure compliance with evolving regulatory landscapes.

As the digital economy continues to evolve, prioritising data sovereignty and protection will be essential for building trust with customers, ensuring regulatory compliance, and fostering a secure environment for data processing and storage. By embracing data localisation policies proactively, organisations can unlock the power of data while mitigating risks and upholding the highest standards of data security and compliance.

Remember, data sovereignty begins with you – take the necessary steps today to secure the data of tomorrow.

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