Trusted Data Format for Secure Data Sharing Compliance

Regulatory fines have increased tenfold over the past five years. Yet despite these escalating costs, most organizations continue relying on file sharing methods that surrender control the moment data leaves their network perimeter.

The vulnerability is straightforward: Traditional security protects data only within organizational boundaries. Once files cross into partner systems, cloud storage, or recipient devices, network-based controls become irrelevant. Recipients can forward files, download to personal devices, or store in noncompliant systems—all outside the sender's visibility or control.

Key Takeaways

1. Trusted Data Format (TDF) = Data-Centric Protection. Trusted Data Format (TDF) wraps each file with encryption and policy so protection travels with the data across clouds and partners. Every access attempt is re-validated through attribute-based access control (ABAC) and key access service/policy enforcement point (KAS/PEP).
2. TDF Enables Rapid Revocation & Least-Privilege. If a file is misdirected or roles change, owners can quickly revoke or update access without recalling copies. Context-aware, time-bound ABAC policies enforce least-privilege by default to reduce breach risk.
3. TDF Delivers Audit-Ready Evidence for Compliance. TDF generates tamper-resistant audit logs of access decisions and events. Teams can demonstrate control effectiveness for CMMC, FedRAMP, FISMA, and HIPAA with consistent, centralized evidence.
4. OpenTDF Secures Cross-Organization Sharing. OpenTDF standards maintain the originator’s policies when sharing with third parties. Data residency, watermarking, and usage restrictions remain enforceable beyond the enterprise boundary.
5. Built for Zero-Trust & Regulated Environments. TDF aligns with zero-trust architectures and integrates with existing IAM/IdP workflows. It supports on-premises, private cloud, and FedRAMP environments to meet stringent governance and compliance needs.

Kiteworks has integrated Trusted Data Format (TDF) capabilities into its Private Data Network to address this fundamental security gap. The implementation embeds standards-based digital rights management directly into data files, enabling organizations to maintain granular access controls, continuous compliance monitoring, and comprehensive audit trails regardless of where sensitive information travels.

Where Traditional File Sharing Creates Risk

Network perimeter security operates on an obsolete assumption: that sensitive data remains within centralized systems accessed from on-premises infrastructure. Current operational reality contradicts this model at every level.

Data crosses organizational boundaries continuously. Healthcare systems share patient records with specialists, laboratories, and insurance providers. Defense contractors transmit classified specifications to supply chain partners across multiple jurisdictions. Financial services firms exchange customer information with audit partners, regulatory agencies, and fintech collaborators. Government agencies coordinate sensitive intelligence across departments and allied nations.

Perimeter controls protect data only until the firewall. After that point, organizations lose visibility into who accesses files, when access occurs, from which locations, and under what conditions. Recipients can forward attachments to personal email accounts, download files to unmanaged devices, or store data in consumer cloud services—all beyond the sender's monitoring or enforcement capabilities.

Consider a defense contractor sharing classified component specifications with a manufacturing partner. The partner's employee, working remotely, downloads the file to a personal laptop for convenience. That laptop lacks proper access controls. The file later syncs to a consumer cloud backup service. At each step, the data moves further from the contractor's security controls, yet the contractor remains liable for protecting controlled unclassified information (CUI) under CMMC requirements.

Healthcare organizations face similar exposure. A hospital sends patient records to a referring physician. The physician's practice uses a different electronic health record system with weaker access controls. A practice administrator, not involved in patient care, can view the records. This violates HIPAA's minimum necessary standard, but the hospital has no mechanism to prevent or even detect the unauthorized access.

Financial institutions transmitting customer data to third-party processors encounter the same problem. Once transaction records leave the institution's systems, they cannot enforce data residency requirements, verify encryption status, or confirm access limited to authorized personnel. Yet regulatory frameworks hold the institution accountable for protecting customer information throughout the processing life cycle.

Compliance Requirements Demand Persistent Control

Regulatory frameworks increasingly require data protection capabilities that travel with information itself, independent of infrastructure or network location.

CMMC Level 3 mandates protection for CUI that persists across organizational boundaries and system environments. Organizations must demonstrate continuous monitoring and access control enforcement regardless of where data resides. Traditional perimeter security cannot satisfy these requirements when data leaves the protected environment.

FedRAMP authorization requires continuous monitoring and the ability to revoke access to federal information on demand. This necessitates persistent control mechanisms that function after data distribution. Network-based security models fail this requirement because they cannot enforce policies on systems outside federal agency infrastructure.

HIPAA demands that covered entities maintain the ability to revoke access to protected health information (PHI), particularly when data is sent to unintended recipients. Misdirected emails containing PHI represent a common PHI exposure vector. Traditional email encryption protects data in transit but provides no mechanism for the sender to revoke access after delivery. Once the recipient opens the message, the PHI is exposed.

GDPR Article 25 requires data protection by design and default, meaning security must be inherent in data processing systems rather than added as an external layer. Article 17 grants data subjects the right to erasure, requiring organizations to delete or make inaccessible personal data upon request. These requirements demand technical controls that persist with data across processing systems and organizational boundaries.

Organizations face substantial financial consequences for compliance failures. GDPR violations can result in fines up to 4% of annual global revenue or €20 million, whichever is greater. HIPAA penalties range from $100 to $50,000 per record exposed, with annual maximums reaching $1.5 million per violation category. Beyond direct fines, organizations experience operational disruption during incident response, legal costs, and long-term reputational damage that affects customer trust and business relationships.

Traditional file sharing creates audit trail gaps that complicate compliance demonstrations. Security teams can log when files were transmitted, but cannot track subsequent access attempts, identify who viewed data, determine access locations, or verify that data remained within required geographic boundaries. This lack of visibility extends audit preparation cycles and creates uncertainty during regulatory examinations.

Technical Architecture: Standards-Based Data-Centric Security

Kiteworks TDF implementation builds on OpenTDF, an open standard originally developed for high-security government use. The standards-based approach ensures interoperability across dissimilar systems without proprietary dependencies. Organizations can exchange TDF-protected data with partners using different infrastructure, identity systems, and security platforms. Recipients access TDF-protected data via the familiar Kiteworks interface with standards-based interoperability. The open specification prevents vendor lock-in while providing the rigor necessary for protecting highly sensitive information across organizational and national boundaries.

TDF files contain two primary components: an encrypted payload and a metadata manifest. The encrypted payload contains the original data protected using modern cryptographic algorithms. The metadata manifest specifies encryption methods, key access server locations, and access control policies. Critically, TDF employs cryptographic binding to make policies tamper-proof. Recipients cannot alter access controls after file creation. Even if attackers intercept TDF-protected data, they cannot modify the policies governing access.

This structure enables protection that persists regardless of platform. A TDF-protected file maintains the same security properties whether stored in on-premises systems, public cloud infrastructure, partner networks, or recipient devices. The protection travels with the data itself rather than depending on the security characteristics of storage or transport systems.

Attribute-Based Access Control for Dynamic Authorization

Kiteworks TDF implements attribute-based access control (ABAC), which evaluates user characteristics, environmental context, and data properties to make granular access decisions. This approach scales more effectively than traditional role-based access control while providing significantly finer authorization precision.

ABAC evaluates multiple attribute categories simultaneously. User attributes include security clearance level, organizational role, department affiliation, and project assignments. Environmental attributes encompass device type, network location, geographic region, and time of day. Data attributes identify classification level, sensitivity category, regulatory requirements, and business unit ownership.

Access policies combine these attributes to create sophisticated authorization rules. For example, a defense organization might specify that files containing Top Secret intelligence are accessible only to personnel holding TS clearances, located within specific command theaters, accessing from managed government devices, during operational time windows. The system evaluates all conditions at every access attempt.

This dynamic evaluation adapts automatically as circumstances change. If a user's clearance expires, device compliance status lapses, or geographic location shifts outside authorized regions, access is denied immediately without requiring manual policy updates. The ABAC model scales naturally as organizations grow, automatically applying appropriate permissions to new resources and personnel based on their attributes.

Healthcare organizations use ABAC to enforce minimum necessary access to PHI. Patient records become accessible only to treating physicians within the care network, during active treatment periods, from clinical systems. Research data might be available to investigators affiliated with specific studies, with additional restrictions based on patient consent parameters encoded as data attributes.

Financial services firms implement ABAC to satisfy data residency requirements. Customer information from European clients might be restricted to employees located within EU member states, accessing from systems that store data in EU data centers, during European business hours. This supports GDPR compliance while enabling necessary business operations.

Key Access Service and Policy Enforcement Point

Kiteworks TDF implementation includes two critical infrastructure components: the key access service (KAS) and the policy enforcement point (PEP). These components work together to validate recipient identity and enforce access policies before granting decryption capabilities.

The key access service manages cryptographic key life cycle and secure storage. When a sender creates a TDF-protected file, the KAS generates and stores the encryption key. The key never resides in the TDF file itself. Instead, the file contains metadata specifying which KAS instance holds the key and what policies govern access.

When a recipient attempts to open a TDF-protected file, the client software contacts the specified KAS to request the decryption key. The policy enforcement point intercepts this request and evaluates the recipient's attributes against the access policies embedded in the file. The PEP queries identity providers to verify user attributes, checks device compliance status, confirms geographic location, and validates any other policy conditions.

If all policy requirements are satisfied, the KAS provides the decryption key and the file opens. If any condition fails, access is denied and the attempt is logged. Importantly, this verification occurs at every access attempt. A user who successfully accessed a file yesterday might be denied today if their attributes have changed or if policies have been updated.

This architecture implements zero standing privileges. Recipients never possess persistent decryption keys. Each access requires real-time authorization based on current attributes and policies. Organizations can instantly revoke access by updating policies or user attributes. Previously distributed files immediately become inaccessible, regardless of where recipients stored copies.

The system supports cross-organizational authorization patterns, enabling secure collaboration while maintaining security boundaries across different organizations and infrastructure environments.

Persistent Policy Management Throughout Data Life Cycle

Traditional security systems apply policies at specific points: when data enters the network, when stored in databases, or when transmitted across boundaries. These point-in-time controls become irrelevant once data moves beyond their scope.

Kiteworks TDF enables policy management that persists throughout the data life cycle. Organizations can revoke access to files already distributed across partner organizations, cloud storage, and recipient devices. Updated policies take effect immediately. Files that were accessible become unreadable without any action required by recipients or administrators of systems where data resides.

This capability addresses the misdirected email problem that represents a common PHI exposure vector. A healthcare organization accidentally sends patient records to an incorrect email address. With traditional email encryption, the PHI is exposed once the unintended recipient opens the message. The organization must report a breach, notify affected patients, and potentially face regulatory penalties.

With TDF protection, the healthcare organization can instantly revoke access when they discover the error. If the unintended recipient has not yet opened the attachment, no PHI exposure occurs. If they have opened it, the organization can verify access attempts through audit logs to determine exposure scope. The file immediately becomes unreadable, limiting damage to the brief period before revocation.

Organizations can set expiration dates on sensitive files. Contract proposals become unreadable after bid deadlines. Temporary consultant access to proprietary information automatically terminates when engagement periods end. Quarterly financial data becomes inaccessible to external auditors after audit completion.

Policies can prevent specific actions even for authorized users. Organizations might allow viewing sensitive documents but prevent downloads, printing, or forwarding. Watermarks can be applied dynamically based on user identity, adding accountability to document handling. Access might be restricted to specific applications, preventing users from copying data to unapproved tools.

These controls remain effective regardless of where recipients store files. Data copied to personal cloud storage, thumb drives, or archived email folders maintains policy enforcement because protection is embedded in the file structure itself rather than dependent on the storage environment.

Automated Compliance Monitoring and Evidence Generation

Regulatory compliance traditionally requires substantial manual effort to document security controls, track data access, generate audit trails, and demonstrate policy enforcement. Organizations spend weeks preparing for regulatory examinations, assembling evidence from disparate systems and manually correlating events to prove compliance.

Kiteworks TDF provides automated compliance monitoring that supports rigorous compliance workflows for federal and healthcare requirements. The system continuously validates that data-handling practices align with CMMC, FedRAMP, FISMA, and HIPAA requirements relevant to specific data types.

Every access attempt generates a comprehensive log entry capturing user identity verified through integrated identity providers, specific files and data accessed, timestamp for the access attempt, geographic location and IP address, device type and compliance status, and access method. The system logs both successful access and denied attempts, providing complete visibility into authorization decisions.

This audit trail enables organizations to answer fundamental compliance questions immediately. Auditors asking "Who accessed this customer data?" receive instant responses with complete details rather than requiring days of log analysis across multiple systems. Questions about data residency—"Has this GDPR-protected information ever left EU systems?"—can be answered definitively with geographic access logs.

The automated approach materially reduces audit preparation effort through continuous evidence generation and prebuilt compliance reports. Prebuilt report templates generate documentation for regulatory examinations directly from access logs. Organizations can demonstrate continuous compliance rather than relying on point-in-time assessments that may not reflect actual operational practices between audit periods.

Real-time alerting notifies security and compliance teams when configurations drift from policy requirements. If a user's device compliance status lapses, if files are accessed from unauthorized geographic regions, or if unusual access patterns emerge that might indicate insider threats, administrators receive immediate notifications rather than discovering issues during periodic reviews.

The system also provides geographic validation that confirms data remains within required jurisdictions. For organizations subject to data sovereignty laws in multiple countries, this capability is essential. Files containing customer data from Chinese citizens must remain in Chinese infrastructure per Cybersecurity Law requirements. European personal data must satisfy GDPR's adequacy requirements for international transfers. Russian citizen data must be stored on systems physically located within Russia.

Kiteworks TDF enforces data-residency policies and provides audit evidence of geographic access. Organizations can deploy KAS instances in required regions and configure policies that restrict access to users located within those regions, using devices that store data in compliant data centers. The system logs verify geographic compliance for regulatory demonstrations.

Mission-Critical Applications Across Regulated Sectors

Military and Defense Operations

Military operations require secure intelligence transmission from deployed systems and sensors across theaters to authorized command elements. Network infrastructure varies significantly across operational environments. Connectivity may be limited in forward deployments. Systems operated by different services or allied nations may have incompatible security architectures.

Kiteworks TDF enables intelligence professionals to protect operational data with clearance-based ABAC policies. Top Secret information can be restricted to personnel holding appropriate security clearances, assigned to specific units or commands, located within authorized operational theaters, and accessing during relevant time windows. The protection persists regardless of network infrastructure or system compatibility.

Defense contractors must satisfy CMMC Level 3 requirements for protecting CUI shared with supply chain partners. Traditional approaches require contractors to verify that partners maintain equivalent security controls—an expensive and often impractical requirement when working with smaller suppliers or international partners. TDF protection embeds CUI safeguards directly in files, maintaining CMMC compliance regardless of partner infrastructure capabilities.

Government Agencies

Federal, state, and local government agencies must share sensitive information across departments and with partner organizations while maintaining compliance with FedRAMP, FISMA, and various data protection statutes.

Cross-agency collaboration often involves organizations with different IT infrastructures, security policies, and identity management systems. Traditional approaches require complex federation agreements and technical integration projects before secure data exchange is possible. TDF's platform-independent design enables secure sharing without requiring infrastructure alignment.

Kiteworks maintains FedRAMP High Ready status, providing government agencies with assurance that the platform meets rigorous federal security requirements. The TDF implementation integrates with this certification posture, enabling agencies to leverage standards-based data protection within their existing FedRAMP authorization boundaries.

Citizen data collected by government agencies is subject to sovereignty requirements that vary by jurisdiction. State government data may be required to remain within state boundaries. Some localities mandate that data about residents must be stored and processed within city or county infrastructure. TDF's regional deployment options and geographic access controls enable agencies to satisfy these requirements while participating in broader information sharing initiatives.

Critical Infrastructure Protection

Electric utilities, water systems, transportation networks, and telecommunications operators rely on IoT sensors and SCADA systems distributed across vast geographic areas. These systems generate operational data that must be transmitted from remote field sites to processing and analysis centers.

Many operational technology environments have bandwidth constraints and limited connectivity. Traditional security approaches that require continuous VPN connections or frequent policy updates may not be practical. TDF protection applied at the edge persists through intermittent connectivity. Access policies remain enforced even if devices temporarily lose network connection.

For resource-constrained environments, OpenTDF supports compact formats optimized for IoT sensors and edge devices with limited processing power and storage capacity.

Critical infrastructure data often has jurisdictional requirements. Oil pipeline sensor data from facilities in multiple states may be subject to different state regulations. Telecommunications network data may include customer information governed by various privacy laws depending on subscriber locations. TDF policies can encode these complex requirements and enforce them automatically as data moves through processing systems.

Healthcare Information Exchange

Healthcare organizations must share PHI between hospitals, clinics, specialists, laboratories, insurance companies, and research institutions. Each exchange creates potential HIPAA compliance risks, particularly when organizations lack visibility into how recipients handle data after transmission.

HIPAA's minimum necessary standard requires that PHI access is limited to personnel with legitimate treatment, payment, or operations needs. When one healthcare organization shares records with another, the sending organization typically cannot control or monitor which personnel at the receiving organization can view the information. This creates compliance exposure, particularly when recipients have broader access policies than senders intended.

Kiteworks TDF enables sending organizations to embed access restrictions in shared PHI. Patient records might be accessible only to physicians assigned to the treating care team, during active treatment periods, from clinical information systems. Administrative personnel, billing staff, and other employees at the receiving organization would be unable to access the information even though they might normally have broad system permissions.

Healthcare research requires sharing de-identified or limited data sets between institutions. Research data sharing agreements specify which investigators can access data, for what purposes, and under what conditions. TDF policies can encode these agreements technically, ensuring that data access aligns with institutional review board approvals and patient consent parameters.

The rapid revocation capability addresses the misdirected email problem directly. With TDF, teams can rapidly revoke access to missent files and evidence attempted access in logs, strengthening HIPAA and federal compliance workflows. Healthcare organizations can instantly make misdirected PHI unreadable, verify through audit logs whether unintended recipients accessed the information, and document remediation actions for HIPAA compliance demonstrations.

Financial Services Data Protection

Banks, investment firms, and insurance companies exchange customer information, transaction data, and regulatory filings with numerous third parties including audit firms, regulatory agencies, service providers, and fintech partners.

Financial institutions face complex compliance obligations across multiple frameworks. These overlapping requirements create challenges that traditional security approaches struggle to satisfy.

Kiteworks TDF enables financial institutions to embed access policies that satisfy multiple frameworks simultaneously. Quarterly financial data shared with external auditors might be accessible only to personnel assigned to the engagement, during the audit period, from the audit firm's corporate network, with automatic expiration after report issuance. The access restrictions and audit trail support compliance documentation requirements.

Customer data shared with fintech partners can include geographic restrictions that satisfy data residency requirements in customers' home jurisdictions. Transaction data might be limited to specific processing purposes encoded as policy attributes. The comprehensive logging provides evidence for regulatory examinations that customer information was protected throughout processing life cycles.

Regulatory reporting often involves transmitting sensitive data to government agencies across jurisdictions with different security requirements. TDF supports cross-organizational authorization patterns, enabling secure transmission while maintaining institutional control over proprietary or sensitive information.

Measurable Benefits for Security and Risk Leaders

Risk Reduction

Kiteworks TDF reduces breach impact through multiple mechanisms. Data remains encrypted even if storage systems are compromised. Attackers who gain access to file systems, databases, or backup media cannot decrypt TDF-protected files without also compromising the key access service and defeating cryptographic protections.

Rapid, policy-driven access revocation limits exposure windows when security incidents are detected. Traditional breach response requires time to identify affected systems, determine data exposure scope, and attempt remediation. TDF enables immediate revocation across all distributed copies of compromised data, minimizing exposure timeframes.

Insider threat protection operates through continuous attribute verification. Unlike traditional access control models where authorized users retain access until explicitly removed, TDF validates attributes at every access attempt. If employee behavior indicates potential insider threat risk, security teams can instantly revoke access to sensitive data without waiting for credential revocation to propagate across systems.

These capabilities reduce potential breach costs measurably through minimized data exposure and accelerated remediation, directly reducing incident response expenses, regulatory penalties, and business disruption costs.

Compliance Efficiency

The material reduction in audit preparation effort represents substantial cost savings for compliance teams. Organizations with multiple regulatory obligations—healthcare systems subject to HIPAA, GDPR, and state privacy laws; defense contractors navigating CMMC, ITAR, and DFARS; financial institutions managing complex regulatory requirements—spend significant staff time assembling evidence from disparate systems.

Automated documentation generation eliminates manual log correlation and evidence assembly. Prebuilt report templates align with common regulatory examination formats. Compliance officers can respond to auditor questions during examinations immediately rather than requiring follow-up periods to locate and organize evidence.

Real-time policy drift detection prevents compliance violations before they occur. Traditional compliance monitoring operates reactively, identifying violations during periodic assessments after problems have existed for weeks or months. TDF's continuous monitoring alerts administrators when configurations deviate from requirements, enabling immediate correction.

Geographic residency enforcement reduces sovereignty violation risks. Organizations operating across multiple jurisdictions face complex and often conflicting data localization requirements. Manual tracking of where data resides and moves is error-prone and difficult to verify. TDF's technical enforcement of residency requirements eliminates human error from compliance processes.

Operational Efficiency

Security team productivity improves through centralized policy management. Rather than configuring access controls separately across email systems, file sharing platforms, managed file transfer solutions, and web forms, administrators define policies once within Kiteworks and enforce them consistently across all sensitive data exchanges.

Integration with existing identity providers eliminates duplicate authentication infrastructure. Organizations already operating Active Directory, Okta, Azure AD, or similar identity management systems can leverage existing user directories and attribute definitions. Recipients authenticate using credentials they already possess rather than requiring new account creation.

Single console governance provides unified visibility across data sharing channels. Security teams monitor email attachments, file shares, form submissions, and large file transfers through one interface. This consolidation reduces context switching and enables consistent policy application regardless of sharing mechanism.

For more information on Kiteworks TDF capabilities, read the solution brief.