Glossary term
Data Localisation
Subject: Technology, Cyber and Data, Data Protection and Privacy
Also known as: Data residency, Data localization requirement
Data localisation is a legal or contractual requirement that certain data be stored, and sometimes processed, only inside a particular country or region, rather than being sent or held abroad.
Explanation
Governments adopt localisation to keep data within reach of their regulators and courts, to protect national security or to support a domestic technology industry. Some rules need a full copy kept at home while allowing mirrors elsewhere. Others bar any transfer at all. Common targets are payment data, health records, telecom data and government information. In India, for example, the Reserve Bank of India requires payment system data to be stored only in the country. Data residency is the softer cousin: a business choice or contract term about where data sits, without a legal ban on moving it. Localisation raises cloud costs and can complicate global systems. Compliance teams record where each dataset is held, including backups. A hosting choice made for cost can quietly break the rule, and audits tend to uncover it.
Example
A global payments firm runs its card processing from a data centre in another region. A new national rule says transaction data on local customers must be stored only inside the country. The firm builds a local data store, migrates the records, moves backups onshore, and has an auditor confirm that no copies remain abroad.
Not to be confused with
- Data Sovereignty
- The principle that data falls under the laws of the country where it sits. Localisation is a specific rule forcing data to stay there.