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    Tokenization vs. Encryption: Differences Each CTO Should Know

    Lakisha DavisBy Lakisha DavisApril 2, 2021
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    Tokenization vs. Encryption: Differences Each CTO Should Know
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    Demanding security standards of the modern world require organizations in every industry to take constructive measures today. There are a few viable means for securing sensitive information and data. But, when speaking about the Internet, a global network – tokenization, and encryption are the two things that come to mind.

    Encryption vs. Tokenization: How to Make a Choice

    For obvious reasons, tokenization and encryption are usually mentioned together. Not only do they help your business meet requirements from regulatory institutions and law regimes (such as EU GDPR, PCI/DSS, HIPAA, ITAR), they can also help build your business data security policies. Although tokenization and encryption have virtually the same application and are equally effective measures for securing data – they have some differences and can’t be replaced by each other.

    Encryption is a process of algorithmic transformation of plain text into something called a cipher – a piece of text that cannot be read or easily reproduced. To return the information to its normal, readable state, you’d need a totally different number of steps along with the encryption key. Among the most familiar type of such services is the SSL cryptographic protocol for transmitting data over the Internet. Operating systems on modern computers and smartphones have built-in encryption capacity of accidental sensitive data loss protection. There are two encryption methods – symmetric and asymmetric key. Symmetric encryption uses only one key to perform both encryption and decryption. Although, this method has some evident drawbacks related to a possible compromisation. On the contrary, asymmetric encryption doesn’t require the exact same key to exchange data across a couple of points.

    Tokenization is a process during which the requested data (whether a text or a number) is being transformed into a completely random line of characters, which is called a token. When breached, such tokens don’t have a value or meaning whatsoever and serve as a representation of authentic data without specifying the exact value. None of the existing mathematical operations is used for transforming the information into a token. It also doesn’t have a key or an algorithm for deciphering the hidden data. Alternatively to these two, tokenization completely relies on a database or a vault, which contains the connections between the token and the value it represents. In such a case scenario, the factual data stays secure.

    So How Do You Pick Exactly What is Best for You?

    To choose the most suitable option you need to know what these two processes are commonly used for.

    Today tokenization is being mostly used to protect the payment cards’ data. Such a move allows merchants to significantly reduce their obligations under PCI DSS. It is also a perfect solution for other types of structured data such as Social Security numbers, email addresses, or anything that can be used for identity verification and needs to be kept on file. Nowadays there are plenty of organizations that rely heavily on such identifications in their backend systems’ work. However, it would be fair to say that tokenization is a more trustworthy security system as the data turned into tokens, can’t later be transformed to its initial state.

    Encryption can become an ideal choice if you have a storage of unstructured files or databases that can be kept in different systems and don’t have to be frequently accessed. Even though it can also be used to secure the payment card or Social Security numbers, this process can face several complications. This is mostly happening due to the data still being present and it is up to the organization to make the transmitting of it comply with PCI DSS requirements.

    When and Why You’d Need a CTO

    If you want to stay ahead of the modern technology trends, forecast, and be prepared for disruptive events, you need a reliable technical leader to make a desired technological shift. A Chief Technology or Technical Officer is also known as a CTO, is an executive who takes care of a company’s technological demands as well as the R&D or engineering. This executive is on top of the long- and short-term goals of the company leveraging different kinds of resources to reach organizational goals from a technology point of view. Depending on the industry and company the individual is working for, if you find a CTO, they may work in several different directions, including strategic advisory, overseeing the relationship with key clients, and maintaining infrastructure. A chief technology officer is a highly-skilled professional with, usually, ten to fifteen years of experience alongside a computer science background and degree. A good CTO as a service provider is expected to be a true tech leader, flexible and informed on the most recent technological advancements and latest industry trends while being a visionary for the business transforming the company along the journey. Having a good imagination for the technologies’ applications and possible use cases is also a must-have.

    Final thoughts

    With the increasing demand for cloud-based technologies, these two services are becoming one of the leading technologies for protecting the information kept in cloud services. According to your needs, the type of the information, and how you’re planning to use it, companies may use and leverage either of the technologies or a combination of both. Although it’s not that easy to choose between tokenization and encryption, a reliable CTO can advise on the right technology for your use. Tokenization, for instance, is a relatively new concept, similar to blockchain. The companies that choose this method may be highly rewarded in terms of security but the process of implementing this new technology is resource-intensive. Finding out the cost of a CTO and hiring them isn’t as straightforward as it might seem at first glance. Talking about your business’s technical aspect, the CTO is a long-term visionary. At the same time, the VP of Engineering, for example, deals with the day-to-day responsibilities of the Tech team. A hiring manager must possess a profound understanding of what that role presupposes and who will be a great fit for it. One must ask themselves such questions as: how would this person react under pressure? How fast can they make a pivoting decision? If you can’t find the type of person for the job, consider looking for outside expertise provided by staffing agencies.

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    Lakisha Davis

      Lakisha Davis is a tech enthusiast with a passion for innovation and digital transformation. With her extensive knowledge in software development and a keen interest in emerging tech trends, Lakisha strives to make technology accessible and understandable to everyone.

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