How Data Sovereignty Can Affect Your Cloud Strategy

Cloud-based SaaS and data solutions allow companies to operate like never before. Brands can scale their digital infrastructure in the blink of an eye, spinning up virtual servers in any country to support data collection, processing, and storage.

However, this flexibility has led to rising concerns about data sovereignty, compliance, and security. Research from Gartner predicts that by 2024, 75% of the global population will have its personal data covered by privacy regulations. And the price of noncompliance is steep. For example, GDPR fines can be up to 4% of a company’s global revenue or 20 million euros, whichever amount is higher.

So how can international brands balance their own needs against compliance with a web of data regulations? Read on to learn how companies can leverage both technical and operational solutions.

Is the cloud compatible with data sovereignty?

Your company probably has a strategy for protecting data in the cloud. You’ve considered the threats of accidental data loss, hackers, and privacy compliance violations. But have you factored data sovereignty into your cloud strategy?

Data sovereignty is the idea that data is subject to the laws of the country in which it’s collected. Specific rules vary by location, but there are a few critical components to most regulations:

• Companies must prevent data breaches or the exposure—whether accidental or intentional—of consumer data.
• Data should only be accessible to essential personnel, enforced at both the architectural and policy levels.
• Data must be encrypted, both at rest and in transit.

Sounds simple, right? Any sane data policy includes encryption and strict access limits. The problem arises when brands collect data from users all over the world. 

Suddenly, you have records from all different jurisdictions, each with its own rules about storage and use. And to add an extra twist, there are even rules about how and where you can transmit data. Meta has fought a years-long battle with the EU over transferring data to servers hosted in the US.

Most companies aren’t moving as much data as Meta. But data sovereignty still creates complexity for international brands at every stage of the data lifecycle:

• Collection methods must comply with local regulations.
• Depending on the jurisdiction, your company might need to store data in the user’s home country, which could mean setting up extra cloud infrastructure in several locations.
• Once data is ingested, you need to manage how you transmit, use, and share it with third parties—and preserve those controls as long as you hold the data.

Say you’re an international SaaS company offering email, word processing, search, and online advertising services. In theory, you have the luxury of working with a broad array of data to improve your products and remarket to your customers. But once you factor in data sovereignty, you soon realize you need to be incredibly careful with how you collect any given user’s data, where you store it, and what you use it for.

However, there are solutions to these jurisdictional challenges.

5 ways to get ahead of the curve

Given the growing number of data regulations international companies have to comply with, data sovereignty can feel like a massive headache. But aside from being legally necessary, it’s an important step in building customer trust.

According to a KPMG survey, 62% of business leaders say their companies should do more to protect users’ data. And that same survey found that 86% of consumers consider data privacy a growing concern. Clearly, brands can do more to keep their customers’ private information secure.

Here are five vital steps you can take to minimize operational risks.

1. Know what you’re working with

First and foremost, you need to know exactly what data you’re collecting and storing. It might seem obvious, but in a digital world that moves at light-speed, departments can get out of sync. Your marketing team might launch an exploratory campaign in a new territory, and the engineers don’t hear about it until support requests start coming in.

To get a thorough handle on your data, you need to consider a few key points:

• From what countries and regions are users accessing your sites and services?
• What privacy regulations cover each of those locations?
• Where are you storing data?
• Are you moving data across borders from its original collection point to its final destination?
• How are you using data, especially if you share it with third parties?

2. Get on the same page with legal and compliance teams

When your team has a full plate, it can be tempting to cut corners in the name of expediency. Regulatory compliance is the last place to do that. The costs of data non-compliance can add up quickly, and erode your customers’ trust in the process.

Go over the following with your legal and compliance teams:

• What data regulations cover the countries in which you’re collecting or storing user data?
• Do you need to make any operational or infrastructure changes to comply with those regulations?
• If you have any ongoing legal exposure, do you need to report it, and what’s the most efficient way to remedy the situation?
• What internal controls should be in place to ensure compliance in any new markets your company enters?

3. Leverage an off-the-shelf data privacy platform

One solution many companies use is an off-the-shelf privacy platform. These systems work with the rest of your technology stack to tag data, manage data subject requests, and track data updates or deletions. Fitting into your team’s workflow, they handle privacy and allow your data systems to function normally.

Third-party data privacy platforms are convenient but don’t always integrate smoothly with other systems. If your company has a complex cloud infrastructure, adding an off-the-shelf data privacy platform into it could have hidden technical costs and impacts on your company’s data operations.

4. Private SaaS

Private SaaS platforms are another option for brands looking to enhance their data controls. With these solutions, your team can enjoy the flexibility of the cloud while keeping your data in-house. This makes it far easier to enact strict access controls and improve security without hampering or disrupting your internal analytics and data streams.

While private SaaS options facilitate compliance, they can also add to engineer workload. There’s more setup and management effort than public clouds, so it’s important to balance the privacy benefits against the increased internal costs.

5. Be ready to report

Security researchers estimate that almost 2,000 data breaches took place during the first half of 2022. No company wants to deal with one, but you need to prepare for it. Many international data regulations state that breaches must be reported promptly—often in under a week—and delayed reporting can compound potential fines.

To minimize your data breach risks, develop a reporting plan for every jurisdiction in which your company operates. Perform regular security audits on your entire data processing stack, and take any potential problem seriously.

Laws are laws, but is that really it?

A step-by-step approach to regulatory compliance works, but it’s an onerous task. And with each new country your brand enters, you have to repeat the process. It’s difficult to scale your business when every new expansion opportunity starts with weeks of poring over data regulations. Or worse, if you need to modify your team’s workflow to be compliant.

Settling for pre-built solutions and hoping they work with your infrastructure isn’t a sustainable approach. Brands need to be ready for a privacy-first world, and data security should be part of your workflow from start to finish.

Imagine a platform built with data sovereignty and privacy as central features, rather than afterthoughts. The compliance process begins at data ingestion, automatically applying regulatory tags to data as you collect it. Data resides in secure and compliant locations based on its jurisdiction and is blocked from any transfers or usage that would violate relevant rules. Access controls and workflows are easily managed, maintaining privacy without impeding operations.

This might sound like a dream, but it’s already a reality.

How Scuba supports data sovereignty and compliance

Your brand shouldn’t have to choose between powerful data analytics and privacy compliance. Nor should you need a huge IT team to achieve both goals.

With Scuba’s privacy-by-design customer intelligence platform, you can get the best of both worlds:

• You can deploy Scuba in private clouds or behind your company’s firewall and maintain total access controls, something that many competing platforms don’t offer.
• Privacy is built into our platform, with the ability to implement automated data governance at the ingestion stage instead of dealing with manual data management.
• With industry-leading certifications including SOC2, ISO27001, ISO27018, Privacy Shield, and GDPR, regulatory compliance is a benefit rather than a burden.
• Highly configurable access controls grant your users access to the data they need while minimizing the risk of overexposure or accidental data loss.
• While many tasks like data ingestion and querying don’t require IT support, automated alerts allow your engineering and security teams to respond rapidly to any problems that arise.

Ready to learn more about how Scuba can facilitate regulatory compliance and elevate your data analytics? Request a demo today or talk to a Scuba expert.