International data transfer regulation is rooted in heavy manual processes and paperwork. It impacts business decisions and leaves room for risk. Legal and regulatory teams have to jump through a host of complexities — requiring the assessment of specific circumstances of data transfers like relevant country laws and practices and any additional contractual, technical or organizational safeguards.
As tedious as international data transfers may be, they are an essential pillar for global economies and businesses operating in an increasingly digital world. It is estimated that data transfers will contribute $2.8 trillion to the global gross domestic product by 2025. In 2022 alone, 85% of EU-based companies used standard contractual clauses to transfer data outside Europe.
Simply put, getting out of the "vicious circle" of manual paper solutions for international data transfers is critical.
What if entities could operate without moving data across borders or eliminate the need for data transfers?
Looking into the crystal ball on the future of data transfers
How data transfers are executed will inevitably change — we know that much. The reality of an increasingly localized digital footprint is undeniable. Seventy-five percent of countries have already implemented data localization laws. Leaning on legal teams and paperwork to keep up with ever-changing regulations and laws will only cause more friction and complexity.
But what if there was a technical solution that could scale and serve as a single point of ingestion for data within your cloud environment? Would life become more simplified if an organization could apply governance at ingestion, rather than after the fact, with a platform supported cross-functionally and in real-time? This revolutionary approach could provide organizations with integrated analytics and external and internal privacy without transferring data.
New technology solutions are tangible and practical
Investing in privacy-by-design solutions doesn't require losing control of data by forcing companies to send it outside their cloud. Instead, it remains in the organization's private cloud, a capability that offers many benefits and opportunities — and streamlines data governance. With a technology-first approach to international data transfers, companies can reap benefits in a number of ways.
A technology-first approach won't disrupt current compliance mechanisms
If organizations have a solution inside their cloud, they eliminate the need to leverage third-party vendors and can keep data in-house. Data transfers will not be necessary, and all data functions — from compliance to analyses — will then be performed internally. The ability to keep data behind a company firewall lets them control the data without disrupting existing data analytics and compliance mechanisms, which minimizes the security risk.
A privacy-by-design solution will check global privacy compliance needs and easily integrate a company’s existing infrastructure. And if an organization facilitates an international data transfer program, compliance requirements like assigning data permissions and setting retention policies can be done when ingesting data into the solution, minimizing lags in compliance during onboarding.
Reduce overhead, increase profits
Consider the ripple effect of legal solutions for compliant data transfers. Should one component fall out of place, the impact is felt across the board. The cost of data transfer analysis and compliance can be significant. Organizations rely on their technical and legal teams — ranging anywhere from a few to 100 or more people — to manage and document data transfers. Companies must maintain this steep cost each year. Regardless of how many engineers and compliance staff a company has, an automated technical solution could reduce and mitigate that cost.
Improper and time-consuming data transfers can result in decreased GDP and missed revenue for companies. Given that 60% of the global GDP is already digitized, disruptive data transfers across borders can reduce GDP gains and even harm local economies and digital ecosystems.
Local and national government data laws also disrupt cross-border data flows for companies. As data localization is prioritized by countries, companies will experience decreases in the efficiency and resiliency of data transfers — and rises in the cost of daily operations. Jumping through multiple complex legal restrictions and enforcements, while doable, is not an optimal method of handling data transfers — particularly between the EU and U.S., which have a data transfer relationship worth more than $7 trillion.
Supports international data governance measures
With complex and differing legal requirements across countries, companies have the difficult task of doing many things at once: understanding individual country laws, assessing risk based on the nature of data transferring, mitigating risk and maintaining proper documentation. In short, this is a massive manual case-by-case process. With a technical solution, companies could mitigate such a heavy overhaul while still fulfilling data governance requirements — and improving the transfer process.
Conclusion
Legal solutions are not sustainable as the only mechanism companies can use to ensure and execute data transfer compliance. As privacy laws and regulations continue to increase, adherence to customer privacy preferences and rights must also. Organizations will need to find nimble and creative ways to meet these obligations.
There is an alternative to costly, legally time-consuming and operationally intense policies and procedures for data transfer and compliance. Legal teams, compliance and risk teams and data officers should consider embracing new technology approaches and envision future technical compliance solutions. A technical privacy-by-design solution's benefits are attractive and comprehensive: easy to use, nondisruptive, automated and cost-effective. The digital landscape changes constantly, so why shouldn't we find a digital compliance solution?
There is hope. New privacy-by-design data platforms can dramatically reduce risk and enable brands to keep control of their data, while expanding their business demand and protecting their customers.
