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The Importance of Understanding Data Masking and Tokenization

Updated: Mar 31



As we slowly emerge from the pandemic, organisations are taking stock of a year which has pushed data compliance to its limits.


It is exactly a year ago that Covid-19 struck and more people than ever before started working remotely. While researchers, no doubt, will look back at 2020 to examine how companies managed to keep afloat in such turbulent times, auditors have started assessing the year for different reasons: data compliance, or the lack thereof.


Securing data is hard at the best of times. Over the last year, it’s certainly been the worst of times as various corporate departments grapple with the challenge of strained working environments and remote working while making sure businesses comply with the General Data Protection Regulations (GDPR), Payment Card Industry (PCI) standards and the Health Insurance Portability and Accountability Act (HIPAA).


Data security


Any rapid or prolonged change in operational practices or processes will inevitably lead to subsequent business challenges. Chief among such challenges is the security of your data, while ensuring that the security does not get in the way of using your data for the obvious benefit of your company and clients.


While terms such as data masking and data tokenization were once only discussed behind the closed doors of your IT Department, they are increasingly being understood throughout entire organisations.


Simply put – a failure to appreciate the importance of data masking and data tokenization and to understand the security risks that your organisation faces can lead to substantial regulatory fines and the ensuing fallout on your corporate reputation.


Data masking and data tokenization


In general, data masking and data tokenization allows for the anonymization, pseudonymization, data de-identification, encryption, and obfuscation of information.


The main reason why organisations want to anonymise data is to allow their data to be used in a secure manner, while preventing loss in the event of a security breach. The implementation of a robust data masking and data tokenization strategy means that companies can operate efficiently and securely, while being in full compliance with data regulations.


Data is ‘masked’ in order to hide its original content and protect the information. Different levels of security can be deployed to mask the data depending on the specific algorithms used. Our BDM Masking tools allows for 12 out-of-the-box algorithms, while custom masking algorithms can also be developed.


In most cases, data masking is non-reversible and it is not possible to return to the original state of the data. Whereas, data tokenization allows data to be anonymised and reversible to the original value of the data.


What this means for your business


Ultimately, masking and tokenization secures your data in a way that is scalable and available. It also reduces the chances of sensitive data exposure while maintaining compliance. By using our BDM Data Masking and Tokenization module, it removes the need for in-house development and minimises data-security training.


Typically, expertise and knowledge are siloed within companies. We don’t expect IT to understand corporate law, nor do we expect HR professionals to appreciate the complexities of IT systems.


However, this is changing due to the importance of securing data and regulatory compliance. If you are working in HR, Legal, or Finance and you are advised by IT about data masking and tokenization, it’s vital that you understand such terms in order to make an informed decision about their use.


Companies face security threats continuously. If and when a security breach happens, your failure to understand the importance of data masking and tokenization will not be a good enough excuse.


For more information, please contact us to find out how Bluemetrix can help you meet your data protection and compliance goals.


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