Risk & Strategy
Kezia Farnham Image
Kezia Farnham
Senior Manager

Is a centralized or distributed database best for enhanced information security?

January 21, 2021
0 min read
Person using laptop to review the differences between centralized or distributed to understand what is best for enhanced information securitydatabase

Globally, organizations are seeing increased threats and increasingly stringent requirements around the integrity of data. This raises debate over centralized vs distributed databases. So what are they, and which one is best for security-conscious companies?

When it comes to client and contact data, recent regulations like the GDPR and California Consumer Privacy Act (CCPA) have applied new rigor, with significant penalties focusing data processors' minds on the need for compliance. Allowing a breach of GDPR, for instance, could see your business facing a fine of up to 'Ǩ10m or 2% of global turnover.

Meanwhile, data relating to your organization itself is also under the spotlight.

Effective management and governance of your legal entities and subsidiaries are increasingly recognized not just as a requirement, but a way to improve shareholder value and performance, as this Deloitte report notes. And with a 'lack of trust in data' identified as one of the four fundamental challenges of good entity governance, it's no surprise that organizational information is attracting as much attention as client and contact data.

All of which means that organizations of all sizes and sectors are increasingly focused on data security. One way to achieve this enhanced security is to centralize the management of your data, but with many organizations still relying on distributed databases to manage their contact and entity information, the potential for centralization to fortify your security is being missed.

Centralized vs Distributed Databases: What's the Difference?

A distributed database is the term used to describe a set of databases stored on multiple computers, but that present as a single database to users.

A centralized database is stored at a single location; a mainframe computer, for instance. It can be accessed, maintained and modified only from that location.

Should You Choose a Centralized or Distributed Database?

While there are arguments for both types, a centralized database is usually seen as the best solution for your business entity information and other corporate data for several reasons:

  • The single-site storage, location and maintenance of a centralized database enables organizations to access and manage their data more easily.
  • Data redundancy and duplication is minimized, improving accuracy and reducing the costs of data storage and processing.
  • Your entire organization has access to a common source of trusted data. This saves time, improves collaboration and optimizes governance, compliance and decision-making.
  • The risk of data loss through failure or malfunction is reduced, compared to storing data on PCs and laptops.
  • A centralized solution typically has higher-quality components, increasing reliability, speed and operating ability.

Enhancing Information Security by Centralizing Your Database

In addition to the benefits outlined above, improved security is a recognized plus of a centralized approach.

Compared to its distributed counterpart, a centralized database maximizes data security. Because your data is held within a single system, as opposed to across a range of locations and systems, you only need to manage security in one location.

You can restrict physical access to the systems, and you eliminate the risk inherent in data held on laptops or PCs, where the potential for theft, loss, or other damage can pose a threat to your data.

Now you've assessed centralized vs distributed databases, and may have chosen what is best for your organization. So if you are leaning toward centralizing your database, what should you do next?

How To Centralize a Distributed Database

Moving from a distributed database to a centralized one may sound daunting. But the journey from distribution to centralization need not be painful.

There are entity management technologies that can deliver a centralized solution for your entity data, and in doing so, deliver security benefits that extend beyond those created through centralization:

Beware, though ' while the best entity management solutions will smooth your path to data centralization, all software is not created equal. Our entity management software buyer's guide has lots of tips on what you should look for to ensure you select the right solution for your organization (and explains why opting for a 'free' solution might be costly when it comes to your security).

Diligent Entities is the market-leading entity management solution, used by growing numbers of organizations to manage their legal entity data, whether locally or globally. Creating a single source of truth that allows businesses to make informed decisions, Diligent Entities offers an efficient way to improve governance, reduce regulatory compliance risk and strengthen information security.

What Next For Your Information Security Journey?

Once you've been through the process of centralizing your data, you should also consider becoming certified to ISO 27001.

ISO 27001 is a standard that works to establish, implement, operate, monitor, review, maintain and improve an Information Security Management System (ISMS) ' it can not only support your overall cybersecurity compliance but also help to reduce data breaches and associated costs. It also gives your shareholders, employees and other stakeholders assurance that you take information security seriously.

Centralization is a Solid Foundation for Data Security

You've explored the centralized vs distributed databases options, what they are and evaluated the security benefits of centralizing your data. You've even been equipped with the best certification to ensure you are meeting cybersecurity standards and are protecting your company from malicious activity. So what now?

Find the right software to ensure:

  1. Sensitive data is stored in one location, providing a single source of truth.
  2. Management of your entities is both accurate, compliant and boosts workflow efficiency.
  3. Information can be accessed on-demand at all times, by the right people, to complete routine business tasks and processes.
  4. Reports about governance and compliance requirements can be completed with ease.

If you want to know more about Diligent Entities and the ways it can help you to improve the security of your data, as well as improving efficiency, governance and compliance, you can find out more and request a free demo on our website.


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