In the world of IoT, connected devices and other technologies, consumers are demanding durable, reliable, and personalized products and services more than ever. Fortunately, the large amount of data out there has made it possible for companies to deliver on the promise. However, businesses need to be more careful about how they manage this wealth of information.
Growing concerns about information security and cybersecurity, along with increased compliance requirements, mean that cybersecurity solutions such as cloud-based tokenization will become essential.
Let’s take a closer at tokenization and how it works as part of hosted or cloud services.
What is cloud-based tokenization?
Cloud-based tokenization swaps sensitive data with a non-sensitive, irreversible placeholder, known as a token. This allows users to store the original data in a safe, external location and better manage data risks. Even in the event of a breach at your company, a hacker would only be able to steal the tokens, which are of no use to a third party. The best part is that organizations are able to protect sensitive data without disrupting the agility and efficiency of existing business processes.
What are the different applications of cloud-based tokenization?
One of the most common implementations of tokenization is with credit cards; instead of storing credit card information onsite, you simply store tokens, which are then confirmed by the payment card processing company when a transaction is made. The transaction only works between the processor and the original company; no one can steal and re-use a token – it won’t work.
Increasingly, tokenization is being employed to protect other types of sensitive information, such as account numbers, telephone numbers, social security numbers, and so on.
Merchants rely on this information for back-end processes and identification. Using cloud-based tokenization allows them to use tokens for tracking and identification, and avoid handling sensitive data.
Is cloud-based tokenization better than on-premise solutions?
Cloud-based tokenization offers two major advantages over on-premise solutions: affordability and ease of integration.
On-premise tokenization requires the organization to purchase both the hardware and software, which results in high up-front costs. Plus, you need time and expertise to set up and maintain the system. With on-premise storage also comes a higher risk of data breaches, which requires additional internal controls. And since you are still storing the sensitive data onsite, your compliance requirements likely haven’t changed.
How does cloud-based tokenization ensure compliance?
In essence, cloud-based tokenization allows organizations to reduce the scope of compliance. Because data is no longer stored on company premises, the scope of your PCI DSS Compliance requirements may be reduced, meaning less time, money, and labour is required to meet your compliance obligations. You may need fewer servers, less complex network segmentation, less complex security structures, etc.
When you opt for hosted services to take care of your data security needs, your sensitive data is stored safely off-site for proper management and compliance. You are still obligated to monitor and audit your partner to make sure they are taking cybersecurity seriously, but the costly and complex details of securing the data yourself are relieved.
Would you like to learn more strategies on identifying and mitigating cybersecurity risk?
Are you ready to strengthen your organization’s cybersecurity defenses and protect your data against cyberattacks? ISA Cybersecurity offers security advisory services to help you design and implement strategic data security plans. And we offer managed security solutions to help reduce your risk and simplify your operations. Contact us today – we have cybersecurity services and people you can trust.