Can data sovereignty better protect your customer data?

In a world where customer data is increasingly the target of cyberattacks and international data scandals, organizations are looking for ways to better protect their data. Data sovereignty offers a powerful approach to maintaining control over where and how customer data is stored and processed. By deploying modern technology smartly, companies can increase their digital independence while complying with increasingly stringent privacy laws.

Dutch organizations are becoming increasingly aware of the risks associated with storing sensitive customer data with foreign cloud providers. With growing dependence on U.S. tech giants and rising geopolitical tensions, data sovereignty is becoming a strategic necessity for companies looking to protect their customer data.

What is data sovereignty and why is it important for customer data?

Data sovereignty refers to an organization’s ability to maintain complete control over digital assets, infrastructure and data within its own geographic boundaries. It includes the ability to manage digital assets independently, including control over data location, processing methods and compliance with local laws and regulations.

For customer data, data sovereignty is crucial because it offers three fundamental benefits. First, it improves security and compliance by storing data within its own region, reducing the risk of unauthorized access. Second, it provides operational resilience, making organizations more resilient to international disruptions. Third, it creates economic and innovative value by boosting local technology industries.

The concept is becoming increasingly important as Dutch companies struggle with increasing dependence on large U.S. cloud providers. Seven Dutch IT companies, including Centric, KPN and Uniserver, recently formed the Open Cloud Alliance to provide a credible alternative to these international players.

How does data sovereignty protect you from international data problems?

Data sovereignty protects against international data problems by keeping data physically within Dutch borders and subject to Dutch law. This eliminates risks of foreign government access, geopolitical tensions and jurisdictional conflicts that can arise with international data storage.

Protection works on multiple levels. During geopolitical tensions, foreign governments can demand access to data stored on their territory, as became visible during trade tensions between the U.S. and China. By keeping data local, you prevent your customer data from becoming part of international conflicts.

Data sovereignty also offers protection in corporate takeovers. A concrete example is the possible sale of Solvinity, which manages DigiD, to U.S.-based Kyndryl. The Open Cloud Alliance has specifically agreed that if one of their members is taken over by a non-European party, the remaining partners will take over the work of keeping data under Dutch control.

In addition, local data storage protects against international service disruptions. During the COVID-19 pandemic, international supply chains were disrupted, demonstrating the vulnerability of organizations that depend entirely on foreign infrastructure.

What are the compliance benefits of data sovereignty?

Data sovereignty offers significant compliance benefits through automatic compliance with local privacy laws, such as the AVG, reduced audit complexity and a lower risk of fines due to jurisdictional conflicts. Organizations can more easily demonstrate where data resides and how it is processed.

The General Data Protection Regulation (AVG) has strict requirements for data location and processing. By keeping data within the EU, you automatically meet the requirements for international data transfers. This avoids the complex procedures required when sending data outside the EU, such as implementing Standard Contractual Clauses or waiting for adequacy decisions.

In compliance audits, it is much easier to demonstrate where your data resides and what security measures apply. Local data storage means you have to deal with one legal system and one set of regulations, rather than having to navigate through different international frameworks that may contradict each other.

The financial risks are also lower. AVG fines can be as high as 4 percent of global revenue. By implementing data sovereignty, you reduce the risk of breaches stemming from ambiguity about which laws apply or from conflicts between different legal systems.

What are the costs associated with implementing data sovereignty?

Data sovereignty costs vary widely by organization, but include initial migration costs, increased operational costs for local infrastructure and investment in cybersecurity expertise. These costs must be weighed against the risks of data breaches and compliance fines.

Migration costs arise when transferring existing data and applications to local infrastructure. This can be complex, especially with legacy systems that are tightly integrated with international cloud services. Organizations must factor in downtime, data transfers and potential reconfiguration of applications.

Operational costs may be higher because local cloud providers may not have the same economies of scale as large international players. However, the Dutch Open Cloud Alliance shows that these cost differences can be minimized through cooperation between local parties.

Investments in cybersecurity and compliance are necessary to realize the benefits of data sovereignty. This includes ISO 27001 certification for information security and building local expertise to manage the infrastructure.

Importantly, these costs are often offset by avoided risks. Data breaches can result in fines of millions of euros and significant reputational damage. In addition, the money continues to circulate within the Dutch economy, providing economic benefits.

How do you start implementing data sovereignty for customer data?

Start with a thorough inventory of your current data streams and identify critical customer data that is a priority for local storage. Then develop a phased migration plan that starts with the most sensitive data and work with certified Dutch cloud providers.

Start with a data audit to understand what customer data your organization processes, where it resides and which systems have access. Identify data covered by the AVG, sensitive personal information and mission-critical data that is prioritized for local storage.

Develop a risk assessment that weighs the sensitivity of different data types against the cost of migration. Not all data needs to be migrated at the same time. Start with the most critical systems and gradually work toward less essential applications.

Choose a reliable Dutch cloud provider that meets relevant certifications. For example, the Open Cloud Alliance offers a network of providers that collectively guarantee continuity and quality. Make sure your provider is transparent about data location and security measures.

Plan the migration carefully with attention to backup procedures, test phases and rollback capabilities. Train your team in the new procedures and provide clear documentation of all changes.

How Pegamento helps with data sovereignty for customer contact

We understand that data sovereignty is more than just technology: it’s about trust and control over your customer data. That’s why we offer complete customized solutions with standard building blocks that help you to:

• Keep customer contact data completely within Dutch borders through our partnership with Uniserver
• Ensure compliance with our ISO 27001 information security certification
• Centralize omnichannel customer contact without dependence on foreign platforms
• Deploy AI-driven intelligence with agentic AI assistants operating locally
• Purchase everything under one roof: from development to management and support

Our human-centered technology strengthens your customer relationships while keeping full control over sensitive data. Through a smart combination of proven modules, we deliver not costly customizations, but effective solutions that fit your specific situation. Want to know how data sovereignty can improve your customer contact? Contact us for a no-obligation discussion.