Can a Data Center's Location Help Reduce Fraud?

Sue Marquette Poremba
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Five Keys to Creating the Data Center of Tomorrow

I never give much thought to where a cloud data server is located because I never thought it mattered. But could it be that the closer the data server is to the clients it serves, the less risk of that data somehow being compromised?


The folks at iovation reached out to me recently to let me know that the company is opening a new data center in Europe - in Amsterdam, specifically - in response to the growing trend of fraud in Europe.


European online fraud has been growing at a tremendous rate. iovation itself saw an increase of fraud in Europe jump 60 percent over the past year. According to a release, the rate of fraudulent transactions originating from Europe jumped from 1.3 percent from January to March 2011 to 2.1 percent from January to March 2012 and showed upward movement every quarter in between. And not surprisingly, the areas with the greatest generation of fraud are Eastern European countries. In a statement about the new European data center, Scott Waddell, vice president of technology, said:

Since 43 percent of iovation's business is international, with Europe leading the way, it is imperative that we do everything possible to ensure our growing overseas customer base has immediate, actionable information to stop fraudulent transactions as quickly as possible.

I again turned to Waddell to ask about the relationship between a data center's location and fraud, and he said, yes, where the data center is located absolutely matters. He told me:

With a data center closer to these customers and their users, we streamline data collection and simplify integrations that might otherwise require some extra effort to avoid hindering the end user experience. That means less friction along the way for all parties and more fraud prevented more efficiently.

It is something to keep in mind when considering migration to the cloud. I've read a number of stories lately about concerns of companies moving their data to servers based in China, and stories about companies and government entities interested in Iceland's "green" data computing services. Obviously, there are a lot of things to think about when reaching out to a foreign country to handle data storage, but iovation's move to Europe adds in another layer.

Add Comment      Leave a comment on this blog post
May 2, 2012 3:01 AM mbragi mbragi  says:

Very interesting article! never thought server location could help prevent identity and data theft. Also shocked to read the percentage increases in online fraud in the European Union, that's why its important to learn how to put a fraud alert on your credit report


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