In short, think of umd data.bin as a digital key that unlocks stubborn PSP ISOs so your emulator or CFW understands how to read them.
In the context of the PlayStation Portable (PSP), UMD_DATA.BIN umd data.bin download
If you extracted a .zip or .rar file and now see a UMD_DATA.BIN file and a PSP_GAME folder on your desktop, you have accidentally "unpacked" the game image rather than keeping it in its playable format. How to Get or Fix UMD_DATA.BIN In short, think of umd data