Data in flight is always encrypted. Pipeline data is processed on Prequel servers for transformation and mapping, but this data is never persisted on Prequel servers longer than the lifecycle of the transfer batch.
As a design principal, Prequel Import never stores Provider data on Prequel servers (in any deployment model). Instead, to support efficient replication and change detection, a secure cache is maintained in your cloud. For more details, refer to the Datalake documentation.