This + the fact that privacy regulations are on the rise will make SaaS providers adapt to a world where customers data cannot be kept on the SaaS prem.

I would suggest to split this problem into two different problems - the processing ("data in use") vs data on rest. Each of these problems should be tackle with a different solution/approach.

I'm working on the tackling the second approach and if anyone want to talk just reach out (reply/mail/link/whatever you prefer)