What is Data Residency

Definition

Data residency refers to the requirement that data be stored and processed within a specific geographic location or jurisdiction, driven by laws and regulations that dictate where certain categories of data, especially personal data, may physically reside.

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Ensures compliance with laws mandating data stay within a given jurisdiction
Reduces legal risk from cross-border data transfer restrictions
Builds customer and regulator trust by honouring local data sovereignty
Guides architecture choices such as regional storage and processing

Real World Example

A European bank configures its cloud platform so all customer data is stored and processed only in EU regions, satisfying regulatory residency requirements that prohibit moving that data outside the bloc.

FAQs

What drives data residency requirements?

Laws and regulations that dictate where certain data, especially personal data, must be stored and processed within a jurisdiction.

How is data residency enforced technically?

By configuring storage and compute to specific regions and restricting replication or transfer outside permitted locations.

How does residency differ from data sovereignty?

Residency concerns where data physically resides, while sovereignty concerns which jurisdiction's laws govern that data.