Storing, sharing, and processing information across borders in our data-driven world are fundamental to all public and private sector activity. But this globalized flow of information comes with added complexity: governments worldwide are imposing stricter regulations on data collection, usage, and transfer, creating new challenges when balancing data compliance with utility.
For many years, the European Union’s General Data Protection Regulation (GDPR) has been considered by many as the golden standard when it comes to data protection. In reality, there is a growing patchwork of jurisdiction-specific laws that affect data management in different ways. Examples include Canada’s Consumer Privacy Protection Act (CPPA), the United States Clarifying Lawful Overseas Use of Data (CLOUD) Act, and India’s Digital Personal Data Protection Act (DPDPA). Additionally, legislation like the Federal Intelligence Surveillance Act (FISA) as well as guidance on the use of commercially available information impact specific sectors like intelligence and security.
Failing to take the entire (and evolving!) regulatory environment into account can lead to fines, loss of stakeholder trust, and expensive legal bottlenecks. To address these concerns, organizations need strategies to manage risks as they transfer data.
Understanding the geopolitical challenges of data movement
Moving data across borders is increasingly influenced by geopolitical factors like national security priorities and rising concerns over data sovereignty. As governments aim to protect citizen data and national interests in a world that is rapidly changing, organizations face significant hurdles in maintaining both compliance and operational efficiency.
Variable data sovereignty laws
More countries are enacting data privacy legislation to protect citizens and safeguard domestic information from foreign adversaries. According to UN Trade and Development (UNCTAD), 71% of countries now have data protection laws, with another 9% drafting similar legislation.
"While most laws aim to keep sensitive data within a country’s borders, they often differ in scope and definitions."
For example, the GDPR universally grants EU citizens the right to be forgotten, whereas such rights in the US depend on state laws. Defining personal data, consent standards, and transfer requirements also vary across regions. Tracking and adhering to inconsistent standards can quickly become a logistical nightmare and increase noncompliance risks.
Gaps in cross-border agreements
Variable data privacy laws often generate regulatory overlap and contradiction, further complicating data governance. For instance, the Schrems II judgment resulted in replacing the EU-US Privacy Shield with the stricter EU-US Data Privacy Framework for governing transatlantic data transfers. However, even this agreement remains under scrutiny, with experts predicting further revisions to resolve future legal grey areas.
Similar rulings may continue invalidating data regulations and mechanisms over time, potentially leaving organizations in legal limbo until governments adapt. The stakes are high, considering that data flows between the US and EU alone underpin a $7.1 trillion economic relationship.
Inefficient infrastructure and resources
In an effort to address a hodgepodge of regional laws, organizations may end up with complex and redundant data infrastructure, software, and management strategies. This fragmented approach can lead to resource-intensive systems that are costly and inefficient to run. End-users may struggle to access data quickly, slowing productivity.
By exacerbating manual processes, expansive and disjointed tech stacks also make it harder to monitor compliance and ensure that appropriate data controls are in place. Balancing compliance with efficiency is difficult as the regulatory environment evolves, with no one-size-fits-all solution.
Geopolitical tensions
Trade wars, sanctions, and national security concerns add another layer of complexity to data movement.
Businesses scaling globally may encounter significant risks in regions with heightened scrutiny of foreign entities and strict data protection laws. As technological competition intensifies between countries like the US and China, organizations may become entangled in data sovereignty disputes.
Key risk management strategies
By adopting resilient data infrastructure, staying ahead of regulatory changes, and embedding privacy-first principles, organizations can protect data assets and stay agile in a dynamic geopolitical space.
Building localized data infrastructure
To mitigate regulatory risks, build a data infrastructure that aligns with regional laws. A leading approach is data localization, which involves storing and processing data within regulatory boundaries.
Many countries now mandate local data storage through residency laws, which require citizen data to be collected, processed, and stored locally before being shared abroad. Setting up local servers and private clouds, or leveraging cloud providers with local data centers, can help you address these requirements. For organizations processing high volumes of citizen data in a specific region—like the EU—localized infrastructure simplifies compliance and reduces risk exposure.
Keeping up with data regulations
As part of a proactive data governance strategy, stay informed of legal and geopolitical developments affecting data movement.
Regularly assess what types of data your organization handles and where it is stored, processed, and shared. Continuously audit your data activities against emerging legislation, especially if your operations and cloud infrastructure expand to new areas. Emerging data governance solutions can also aid in automating compliant cross-border data transfers, eliminating the need to research laws and apply controls manually.
Establishing privacy-first policies
Rather than treating data sovereignty laws as legal checkboxes, establish a culture of data protection and security within your organization. This is key to adapting to new privacy legislation and avoiding costly oversight.
Designing data infrastructure and management systems that align with relevant legislation is a good starting point. However, consider your organization’s values surrounding data privacy—beyond the minimum legal requirements—and develop in-house policies that reflect them.
For example, outline which data types are necessary for specific users and use cases, using data minimization principles to avoid unnecessary risk. Write data processing agreements (DPAs) with third-party vendors, even if agreements aren’t required by law in your jurisdiction. You can also develop training programs on data privacy, helping raise user awareness and improve early identification of compliance risks.
Data utility and compliance: A fine balance
While these strategies ensure compliance, they can come at the expense of data utility. Localized storage reduces regulatory risk but can limit user accessibility. Likewise, relying on manual processes and disjointed software to manage regional laws raises costs, slows workflows, and increases the risk of regulatory oversight.
Innovative solutions in the data governance space can bridge this gap, helping organizations get the most out of their data without sacrificing compliance. For example, ORIGIN by Intlabs is a smart data governance platform that offers:
- Localized infrastructure made accessible. ORIGIN provides centralized access to distributed local data sources using a data mesh architecture. This means that if your organization uses multiple servers globally, users can easily access data from those sources in one convenient interface.
- Compliant cross-border transfers. ORIGIN uses AI to analyze your data against legislation and policy relevant to where it’s processed and shared. The platform then automates rules like content redaction to ensure compliance when transferring data between regions. ORIGIN AI stays up-to-date with the latest guidance and legislation so admins don’t have to keep track of changes manually.
- Streamlined reporting and accountability. ORIGIN uses blockchain technology to record every activity throughout the data lifecycle, simplifying risk detection and regional reporting requirements.
Gain control over your data movement
There is currently no universally accepted standard for how data is protected and shared. In fact, variable laws are likely to fuel geopolitical tensions for years to come. In this landscape, it’s crucial to understand the regulatory risks associated with your organization’s data activities, especially if you lack full awareness of what information you’re handling and how and where it’s used.
Resilient data governance tools and processes, including localized infrastructure and proactive policies, are key to addressing risks. However, organizations must also maintain data accessibility and optimize resources, ensuring compliance without compromising the data’s intended value. While every organization has unique requirements and operating areas, a solution like ORIGIN can significantly streamline compliant data transfers across any regulatory boundary.
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