Analysis of key metrics is critical for the strategic success of companies, especially companies in rapidly changing industries like politics, finances, marketing, health care, technology, and security. But strategical analysis is only as good as the data it utilizes. If valuable data is not correctly gathered, recorded, accessed, and understood then it cannot accurately be used.
What is Data Utility?
The term “data utility” is used to describe the value of data when used in business or academic analyses. Data’s utility differs based on its content and the context in which it is being interpreted. Almost every industry benefits from data analysis, whether they use analytics to increase profit, identify opportunities, or understand consumer habits.
Every industry driven by data analytics understands the balance that must be struck between data utility and data privacy. Consumer privacy concerns have only grown in recent years, and the ability to use personally identifiable information has become highly regulated. These safety concerns have merit, as do the concerns of those who need data to retain its utility while remaining safe.
The ability to keep data both secure and accessible seems like an insurmountable task for many companies. However, some technologies, like tokenization, offer alternative solutions to keep consumer data secure while providing access to information for multiple data use cases.
What is Tokenization?
In the modern cyber security landscape, firewalls and antivirus software alone cannot be considered an effective security solution. A comprehensive security solution must secure data, even when stolen, with tools like encryption or tokenization. Encryption secures data, which solves customers’ security concerns, but can inhibit data’s utility. Tokenization, on the other hand, is a technology that secures sensitive data by removing the original value in a way that retains the data’s utility.
Tokenization swaps original data for non-sensitive data in a way that is replicable, but not reversible. Tokenization can preserve elements of the original data, like formatting or sections of the original data, which maintain the data’s functionality. The entirety of the original data, however, is stored away from the tokens where it can be dispensed as needed.
How Tokenization allows Data to be Used
Because tokenization replaces data instead of scrambling it, tokens are useless if stolen. Unlike encryption, there is no way for a hacker to revert a token to its original state. Because tokens cannot be reverted to reveal the original data, they are not considered sensitive data. Because of this, tokens can be used for internal analytics without violating compliance guidelines. For example, regulations like PCI DSS (Payment Card Industry Data Security Standard) don’t consider tokenized payment data to be
Tokenization simultaneously preserves the utility of sensitive data while allowing it to remain secure and compliant with most regulations. Tokenization allows sensitive data to remain secure in transit, in use, and at rest, enabling a flexible range of data use cases that would otherwise be unsafe or inadvisable.
Tokenized Data Use Case Examples
To understand how tokenization can improve data utility, let’s look at an example of tokenization in the payment card industry. The payment card industry relies on data to drive insights into customer behavior, optimize systems, increase profits, and cut costs. However, cardholder data is highly sensitive and constantly at risk of being stolen by malicious actors.
If cardholder PANs (Primary Account Numbers) are needed for internal use, a business has two options. One is to use sensitive data in internal systems, which puts the data at risk and brings the systems that interact with the data into the scope of PCI DSS. The other option is to create a token for PANs that preserves the first six and last four digits of the original card numbers. This token can then be used for internal use, without risking the cardholder’s data or complicating the PCI compliance process. This is both the more secure option and the option that allows cardholder data to be used for internal analysis.
Tokenization can help drive valuable data insights that improve profitability, identify risk, and/or support strategic decisions. If you’re interested in tokenization, contact a TokenEx representative today to talk about potential tokenization use cases.