What feature of a mobile device management system could be used to restrict the use of an application containing confidential data to only a specific geographical area?

Geofencing

Explanation:

Geofencing is the use of GPS technology or virtual geographic boundary to ensure lack of access to a certain information when a device is out of its range of coverage.

A daily example is seen on twitter mostly where a video or content is not available for you to watch in your country.

VPNs can be used to change locations as if you were in another region to enable access to the content.

Cheers.