As enterprises realize that data are among their most valuable assets, they are looking into technologies to protect them. In this direction they use novel data management technologies, including data tokens. Data tokenization is a powerful technology for information security and privacy protection. Its uniqueness is that it was designed specifically to protect the highest-value enterprise assets i.e., to ensure data security for sensitive enterprise data. Specifically, data tokenization is a process by which large amounts of data are broken down into smaller components known as tokens. The process also involves the recording of the data in an encrypted format, thus protecting them from entity level risks. Hence, data tokens can be used to control access to databases, automate business functions and streamline their compliance processes.
In the scope of data tokenization encryption is used to replace sensitive data with a non-sensitive equivalent while still allowing the original, personally identifiable information (PII) to be accessible at the time of request. Data tokenization comes under threat mitigation strategies: It is often chosen to prevent or mitigate identity theft or insider threats in organizations like financial and healthcare institutions. For instance, tokenizing credit card numbers, driver’s licenses and other government identifiers protects against fraud and enables part of the identity to be shared safely with third parties such as marketing efforts, loyalty programs, discount cards or donations.
Data Tokenization replaces the identifying information about any specific data element with a token that represents it. This means that the original data must be re-created to view and use it by whoever has access to the encrypted file. Data tokenization has several benefits, such as:
Overall, data has become the prized asset, as business plans are shifting from simply revenue to data generation and usage. However, the main challenge that enterprises face is achieving proper security measures when operating with large data sets. Data tokenization is a relatively new concept that is gaining traction in the data security industry. Given the growing number of threats associated with big data, it would be prudent for companies to examine its merits and explore technologies for managing tokens effectively.
Tokenization is a promising approach to boosting enterprise security, but many companies are still wary of adopting this new technology. They fear that replacing sensitive data with unique tokens will hinder business-critical processes like crafting Artificial Intelligence (AI) algorithms and maintaining databases. However, these fears are overwrought since tokenization does not hamstring the business. In fact, it enhances security while allowing companies to continue conducting business-as-usual. Therefore, enterprises should consider the deployment and use of data tokenization solutions as part of their security policies and their business strategies. In this direction, companies should evaluate novel approaches for implementing tokenization mechanism, including both conventional techniques and emerging approaches like blockchains and Non Fungible Tokens (NFTs).
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