The process of tokenizing assets and sensitive data is a hot topic, but you may not know exactly what needs to be tokenized, or how to determine whether tokenization processes meet your organization’s business needs. Industries subject to financial standards, data security standards, regulation, or data protection should pay attention to the current phenomenon of tokenization because these processes provide a real opportunity for business environments to minimize the distribution of sensitive data, reduce the risk of disclosure, improve security and reduce liability, compliance, therefore security tokenization provides businesses with a high level of security of all data and a significant reduction of any financial unnecessary costs.
What is the phenomenon of tokenization and why is the question of what is the tokenization of data so common among many people? The process referred to as tokenization is the process of replacing actual sensitive data elements with non-sensitive data elements that can be used to create a secure environment for critical data. Security-critical applications use tokenization to replace sensitive data, such as personal information, with tokens to reduce security risks. Applications may need access to original data or original data elements for decision-making, analysis, or personalized messaging. To minimize the need for data detokenization and reduce security risks, the token preserves the attributes of the original data and can be processed and analyzed using the value of the token instead of the original data. Storage of functional attributes in tokens must be done in a way that does not compromise the security of the overall tokenization process. Restricting access to scopes and tokens removes restrictions when using attribute persistence.
Why tokenize assets?
Tokens have no compatibility requirements as long as the tokenizing application and the application using the tokens are separate. Encrypted sensitive data does not reduce your compliance or availability obligations. Industry regulatory standards continue to address systems that store, process or transmit encrypted cardholder data for analysis. Tokenized data may exclude these systems from evaluation. Confidential information should be shared only with those who need to know it. Using the tokenization phenomenon, you can add an explicit layer of access control to tokenize individual data items. They can be used to provide and demonstrate the least privileged access to sensitive data. When data can be commingled in public repositories such as data warehouses, tokenization helps only users with appropriate access complete the detokenization process and expose sensitive data.
Avoid sharing sensitive information with service providers
You can eliminate the risk of sensitive data falling under the control of a service provider by marking sensitive data before it becomes available to a service provider that does not have access to tokenized data, thereby ensuring compliance with security regulations in your environment. This is important for customers involved in payment processes and providers offering tokenization services that tag cardholder data and return tokens to the customer that can be used for completely secure card purchases. You can safely store all structured and unstructured data at any scale, then use it for unlimited analysis. The storage of multiple sources and data in multiple structured and unstructured formats makes it difficult to present data protection controls to meet regulatory requirements.
Ideally, you should not receive sensitive data. However, this is not always possible. When this data needs to be retrieved, tokenizing each data source can exclude the relevant data from the common data store and avoid compliance implications. Tokens with appropriate data attributes can be used to support several analytical functions that help keep data completely secure. Organizations may need to analyze sensitive data for other business purposes, such as marketing metrics and information reporting. With data tokenization processes, you can minimize the allowed space for sensitive data and provide tokens to users and applications that need data analysis. This provides an efficient way for many applications and processes to access the token data and securely protects the original sensitive data.
Depending on where and how tokenization is applied, the processes themselves can be used to mitigate the various cyber threats identified in the workload threat model. Tokenization of sensitive data replaces sensitive data elements with their non-sensitive counterparts throughout the data lifecycle and flow. Tokens can help preserve the value of data processing while managing data disclosure risk and compliance coverage. Encryption is a key reliable mechanism for the absolute confidentiality of important business data. Encryption rarely produces ciphertext in a format that resembles the original data; this can make data analysis difficult or require significant program customization. Volume reduction, data analysis, mitigation of cyber threats, and masking of data for protection are very strong arguments in favor of tokenization processes.
Opportunities offered by the tokenization process for your business environment
Business environments must first identify their key critical needs and use cases for tokenization processes. It is important to think about the question, what are the specific use cases for tokenized data, and what are the business goals? Identifying the use cases and end cases that apply to your business will help you find the right, most efficient solution to meet all your needs.
A key understanding of the data elements that need to be tokenized and how that tokenized data is used will help you decide what type of solution you need to implement in your business. In the case where the token is deterministic, does the same data always create the same token? Whether the token is used only internally or shared with other business units or applications can influence the final decision to use tokenization capabilities. A lifetime of the token. You need to find the right solution that meets all the key needs of your use case, internal security policy, and regulatory framework. Do you manage tokenization yourself or do you use tokenization as a service (TaaS) provided by a third party? Key benefits of managing tokenization solutions with your organization’s staff and resources include: deploying and maintaining the solution, implementing the solution, customizing the solution to meet current needs, and being able to create experiences and remove any dependencies.
A key advantage that a TaaS solution provides is that the solution is already comprehensive and well-tested for both tokenization and access control security. In addition, TaaS inherently provides segregation of duties, as privileged access to the tokenization environment belongs to the token provider. Circulating tokens help payment and other financial services avoid sharing sensitive data internally or with third parties. Only the token is transferred to the provider, eliminating the need to accept additional security risks and compliance volumes. If your business environment implements a tokenization process, you must be able to effectively manage the use of tokenization permissions. Terminating applications without tokens is the most obvious way to indicate that future applications cannot contain sensitive data.
Given the security and compliance risks associated with converting tokenized data into a native data format, this process should be carefully monitored and appropriate alerts set up to detect this activity when it occurs. Operational considerations are important factors in choosing a solution. Bandwidth, latency, deployment architecture, flexibility, and all these important things can affect the tokenization solution you choose. For example, mechanisms that integrate with identity and access control and registry architecture are important for compliance. No matter which distribution model you choose, the tokenization solution must meet both security and encryption standards, the value of the token cannot determine what data is stored.
Important solutions offered by tokenization
Tokenization processes provide a wide range of useful opportunities to securely manage sensitive data, and tokenization has many security and compliance benefits. These key benefits include reduced security risks and audit coverage, which reduces compliance costs and regulatory requirements for data processing. The phenomenon of tokenization allows you to reliably protect important confidential data in new and innovative ways, these solutions are designed to help your business develop personalized products, monitor fraud, reduce financial risks based on the analysis of suspicious activities, improve strategic planning with predictive analytics, also using trends and consumer usage patterns.
Business analytics for your company ensures success. Implementing tokenization can help business environments significantly reduce the regulatory burden associated with protecting sensitive data when implementing solutions that use anonymous data for analytics. Tokenization not only increases the complexity of systems and applications but can also mean additional costs when maintaining these systems and applications. In the case where you use a third-party token solution, you need to integrate tokenization into every application that uses the relevant data, which can be a complex process. You should consider all the things that can help you decide if tokenization is right for you, what to consider when deciding what type of tokenization solution to use, and what key benefits tokenization will provide to your business environment. When choosing a tokenization solution, it’s important to identify and understand all of your organization’s needs, as there are several tokenization options you can implement based on your organization’s unique business needs.
For companies that choose to tokenize their assets, value is a key driver of digital tokens. A detailed understanding of what tokenization means and how it works provides a clear understanding of the basics of its benefits. Organizations gain visibility to improve tracking of physical products, optimize IT processes, and automate various business tasks. Individual users can earn higher profits with blockchain-based digital tokens. The key to understanding the true potential of tokenized assets always begins with a deeper study of the concept.