Ashley Eisenberg, Legal Director and DPO, Forter, discusses the main benefits of a European data centre, exploring regulatory breach mitigation, enhanced control over data, reduced latency and improved performance during busy periods.
For businesses, there is significant potential to derive value from data. Data can enable personalised shopping experiences, improved stock management, bestseller identification and a deeper understanding of consumer experience levels to drive a competitive edge. However, with businesses collecting more data than ever before, and the global regulatory landscape governing how data must be collected and protected, businesses are often challenged on how to effectively manage, store and protect it in a way that optimises for broader business benefit, while at the same time remaining compliant with global regulations and instilling trust in consumers.
The security and availability of this data are paramount, which is why complex regulations like the General Data Protection Regulation (GDPR), the European Union’s Network and Information Security Directive (NIS2) and many other European regulations governing how data must be protected exist. Businesses must ensure compliance with these regulations while balancing them with the fast-paced demands of digital commerce requires them to choose a solution that supports both operational needs and regulatory obligations. In this regard, a data centre in Europe is a strong asset.
Data protection as a key driver
In light of recent high-profile cyberattacks, consumers are naturally concerned about how their data is managed. This comes as no surprise as fraudsters continue to target consumer data, including their loyalty points. Such attacks can at best negatively affect the brand’s reputation and consumer relationships, and at worst, lead to serious repercussions for the consumer.
To mitigate this risk, GDPR places specific requirements on what data can be collected, how it can be stored and processed, when it should be deleted and requires specific risk assessments. This has encouraged businesses to adopt a stringent, robust framework that increases data protection for EU subjects. As we have seen with rising fines from non-compliance, this should be an absolute priority for businesses.
Here, a local EU data centre will facilitate easier compliance with local regulations, mitigating the risk of accidental breaches and lightening the workload for businesses. Keeping data in the EU through regional data centres enables businesses to comply with GDPR guidelines, provides additional data security measures, track and maintain data logs, and simplify the required data auditing processes.
Enhanced control over data
Beyond regulatory compliance, global companies face operational risks as data crosses borders and can become more vulnerable to interception. As UK and EU regulatory bodies demand greater transparency and control from businesses, they can benefit from a more centralised and secure data management approach.
An EU data centre enables European companies to closely oversee data handling, storage and security. This reduces the compliance risks associated with transferring data in and out of the EU. A well-secured data infrastructure not only protects sensitive information but also supports continuous business operations.
Improved performance and reduced latency
As businesses strive to provide the most convenient and seamless customer experiences, a slick checkout experience for consumers is a must. This is where minimised latency in authorising transactions plays an important role. Recent Forter research finds that 77% of UK respondents are likely to abandon their online shopping basket if the process is too difficult or time-consuming. Lagging checkout times may affect the consumer’s decision to return to the retailer, affecting brand reputation and revenue, whereas a smooth and quick checkout experience increases competitiveness.
For companies with UK and EU consumers, opting for a local data centre can positively affect the online shopping experience. When data is stored closer to the end-user, the processing time on each interaction and transaction can be reduced. This leads to quicker transaction decisions, enhancing shoppers’ experiences, whilst improving the overall speed of applications and services.
For businesses, this can translate into higher customer satisfaction and a competitive edge in the market. These benefits are particularly important during high-traffic events such as holidays, limited edition stock drops and sales. A local data centre can better support and scale alongside businesses during these peak moments.
Global reliability and Disaster Recovery
That said, storing data in one physical space is akin to placing all the golden goose eggs in one basket. Whilst having data stored locally can facilitate quicker decision times, companies run the risk of losing access to valuable data should the data centre be physically compromised.
In this case, companies should consider whether to opt for a segregated or non-segregated local data centre. A segregated EU data centre keeps consumer data strictly within Europe, meaning there are no backups should an accident or malicious attack occur. However, a non-segregated EU data centre is often part of a network, which can send EU-compliant data to other countries as backups.
This not only provides operational resiliency in the face of unforeseen challenges but ensures global companies have ease of access to data when needed.
Empowering global businesses in a complex landscape
As digital commerce grows more competitive and regulated, businesses need to assess their data infrastructure to ensure compliance, improve operational efficiency and protect valuable assets. Local data centres offer a strategic advantage by providing robust infrastructure, regulatory adherence and enhanced performance capabilities.
They enable businesses to drive growth and safeguard consumer data, building trust in today’s complex and competitive online landscape. Within retail, we have seen that UK consumers are willing to spend on average 48% more with a retailer they trust. Leveraging a local data centre should be a key consideration for businesses to do just this.
