Definition
Data Residency refers to the geographical or physical location where an organisation’s data is stored, governed by the legal and regulatory requirements of that specific region. This concept ensures data remains within designated boundaries to meet compliance, performance, or sovereignty needs.
Key aspects of data residency:
Geographical constraints
Mandates that data be stored in specific countries or regions (e.g., EU GDPR requiring EU citizen data to reside within member states).
Compliance drivers
Aligns with privacy laws like GDPR, HIPAA, or sector-specific regulations (financial, healthcare) that dictate storage locations.
Performance optimisation
Reduces latency by storing data closer to end-users (e.g., regional cloud servers for faster access).
Sovereignty linkages
While data residency focuses on physical location, it intersects with data sovereignty-the legal jurisdiction governing stored data.
Related concepts
Summary
Data Residency serves as the foundational mechanism for enforcing data sovereignty by physically anchoring information within jurisdictions whose laws govern its use. This geographical constraint ensures data remains subject to specific legal frameworks, creating a tangible link between storage locations and regulatory compliance.
Over 130 countries now enforce data residency rules, with violations risking fines up to 4% of global revenue under GDPR.
