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Fortifying Your Data: Unlocking the Benefits of Tokenisation in Cybersecurity

Data security has become a significant concern in the modern business world, where data breaches and cyber attacks are increasingly common. Organisations employ various obfuscation techniques to protect sensitive data from unauthorised access, such as encryption, data masking, and tokenisation.


In this article, we will discuss these techniques, their advantages and drawbacks, and how tokenisation has the potential to overcome the limitations of encryption and data masking.



Encryption is a technique that converts plain text data into a coded form that can only be deciphered by authorised parties who have the decryption key. While encryption is a widely used data security technique, it has some significant drawbacks. Encryption requires complex procedures and systems for securing low-level or non-sensitive data, which generates excessive growth of system intricacy, interaction difficulties, and hardships in data management, increases the system management effort and causes unjustified costs of human, financial, and material resources. Additionally, if the encryption key is compromised, the encrypted data can be accessed by unauthorised parties.

Data masking is a technique that replaces sensitive data with fictitious data so that unauthorised parties cannot access the sensitive data. While data masking is an effective technique for protecting data, it has some drawbacks. Data masking can be time-consuming and expensive, requiring creating a new database or modifying the existing one, which can affect the system's performance. Moreover, data masking is unsuitable for all data in organisations, and organisation data needs to be scanned and filtered.


Tokenisation is a technique that replaces sensitive data with tokens with no meaningful value or relation to the original data.


The tokenisation system generates tokens using random number functions, but they can take specific formats, like masking wildcards, to ensure proper application integration with other systems. Tokenisation is widely used in the financial sector, where the PCI Data Security Standard refers to the tokenisation of Primary Account Numbers (PAN). However, tokenisation is not limited to financial data. It can be used for any sensitive data, such as social security numbers, financial identification numbers, account numbers, names, email addresses, phone numbers, assets, and other sensitive data.

Tokenisation has several advantages over encryption and data masking. Tokenisation requires reduced IT resources, minimises the impact on organisational business processes, limits performance impact, and increases collaborative organisational capabilities. Tokenisation can substitute masking, and organisations can provide an integrated, secure environment with sanitised data for testing and development purposes. The system can recover the original data through detokenisation if required. A tokenisation framework in an organisation must be implemented based on a consistent strategy plan. The decision-makers must identify challenges, analyse their impact on their organisation, and establish measures to address those challenges while ensuring business success.

While tokenisation has several advantages over encryption and data masking, it has some limitations. Tokenisation is unsuitable for all data in organisations, and organisation data needs to be scanned and filtered. The vault is a database that maps sensitive information to tokens. If used on a grand scale, the databases expand humongous, determining a time increase in the search process, limiting system performance, and increasing backup procedures. The vault maintenance work increases exponentially with new data being added, and ensuring consistency across databases requires continuous synchronisation of token databases. Secure communication links have to be established between sensitive data and the vault so that data would not be compromised while being transferred to or from the storage. Organisations must take a comprehensive approach to data security to ensure that sensitive information is protected from unauthorised access. While traditional processes such as encryption and data masking have been widely used, they have limitations that can lead to excessive growth in system complexity, increased management effort, and unnecessary costs.

One promising alternative is tokenisation, which replaces sensitive data with tokens without meaningful value or relation to the original data. This technique generates tokens using random number functions. It can be used for sensitive data, such as social security, financial identification, account numbers, names, email addresses, phone numbers, assets, and other sensitive data. Tokenisation is widely used in the financial sector, where the PCI Data Security Standard refers to the tokenisation of Primary Account Numbers (PAN).

One of the main advantages of tokenisation is that it requires reduced IT resources and minimises the impact on organisational business processes. Unlike encryption and data masking, which can be time-consuming and expensive, tokenisation offers an integrated, secure environment with sanitised data for testing and development purposes. This system will have the capability to recover the original data through detokenisation if required. Tokenisation also enhances collaborative organisational capabilities.

However, tokenisation is not a silver bullet and must be implemented as part of a comprehensive strategy that considers the organisation's specific needs and risks. Decision-makers must identify challenges, analyse their impact on their organisation, and establish measures to address those challenges while ensuring business success. By following best practices, organisations can leverage tokenisation to improve data security while maintaining operational efficiency and reducing costs.

One of the drawbacks of tokenisation is that it is only suitable for some data in organisations, and organisation data needs to be scanned and filtered. Additionally, the vault, which is a database that maps sensitive information to tokens, can expand significantly when used on a large scale. This can lead to a time increase in the search process, limit system performance, and increase backup procedures. The vault maintenance work increases exponentially with new data being added, and ensuring consistency across databases requires continuous synchronisation of token databases. Secure communication links must be established between sensitive data and the vault so that data would not be compromised while being transferred to or from the storage.

Another potential issue is that the tokenisation system generates tokens that may be predictable or vulnerable to attacks. This can occur if the random number functions used to create the tokens must be sufficiently complex or do not produce a sufficiently large set of possible tokens. As such, it is crucial for organisations to consider the security of their tokenisation systems carefully and to ensure that they are implemented in accordance with best practices and industry standards.

Data security is critical for organisations in the modern business world. While traditional approaches such as encryption and data masking have been widely used, they have limitations that can lead to excessive growth in system complexity, increased management effort, and unnecessary costs. Tokenization has emerged as a promising alternative that offers reduced IT resources, minimised impact on business processes, enhanced collaboration, and better performance. However, tokenisation is not a silver bullet and must be implemented as part of a comprehensive strategy that considers the organisation's specific needs and risks. Decision-makers need to identify challenges, analyse their impact on their organisation, and establish measures to address those challenges while ensuring business success. By following best practices, organisations can leverage tokenisation to improve data security while maintaining operational efficiency and reducing costs.

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