The Main Security Advantages of Tokenization

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( — October 20, 2022) — You might be under the impression that data protection for business is inevitably connected with complicated strategies and enormous expanses. However, tokenization is as simplistic as it can be and is considered one of the best methods of protecting sensitive data.

Basically, what it does is that it replaces data with random symbols so that it can only be read by the person who has created the token. Unlike other approaches, tokenization does not allow you to untangle the information by using a key. Consequently, all your client’s data is protected from crypto crimes or accidental leaks, and your reputation is, therefore, protected from loss. 

Encryption is also a very popular approach that works similarly. The main disadvantage is that encrypted data can be untangled with a key, which can obviously be stolen or falsified. Therefore, encryption is much less trustworthy and should be combined with other methods.

The big question is whether you need to protect the data you store and operate or not. Briefly speaking, all companies that store their client’s data or operate sensitive information such as medical or financial info need to protect it. Nowadays this makes the biggest part of companies. 

Why are crypto crimes so common now? Of course, they are far from being new inventions and have actually been around for as long as we have been using the Internet. However, now this sort of crime thrives as never before. These are some reasons why:

  • More online operations occurring
  • Higher Internet accessibility in the world 
  • The rising number of payment systems
  • Major vulnerabilities in security
  • Many gaps in international laws protecting data

So what are the main benefits tokenization can bring you?

1. Eliminating branches

While crypto crimes thrive, companies that offer online payments make an easy target. Once they get into your system, they can immediately use all the information you store or sell it if they find it more lucrative. Without exaggeration, businesses lose millions of dollars every year because of this issue.

The tokenization of credit cards is highly effective in preventing this from happening. Even if criminals do manage to hack into your system, they will not be able to use the data because they will simply see a random combination of symbols impossible to comprehend.

2. Higher level of trust

Clients are well aware of the dangers out there — the problem has become common enough for it to worry everyone. Ensuring that their data is protected with various layers of security will incline them to use your services more. 

This is even more important if you store medical data and information that can jeopardize not only your clients’ accounts but their reputations as well. Show users that you value their safety enough to invest in your security strategy instead of simply hoping for the best.

3. You can get permission to work with all kinds of data

Protecting your customers’ data is not just something we advise you to do, neither is it a question of morals. All civilized countries have certain restrictions that dictate what you need to do before you start operating or, moreover, storing sensitive data.

Therefore, neglecting security can limit your business and your client base. Tokenization is an easy and affordable way to become compliant and get permission for various operations, regardless of which country your business is located in.

4. It allows you to enhance new technology

Tokenization can be used on various gadgets, and it also enables you to implement new payment systems and generally be on track with the most advanced technology. Nowadays, this has special value, as all businesses are visibly turning online processes.

5. Saving money you could spend on fines

Fines for losing your client’s data can be severe in different countries. It is always better to invest in security in advance instead of learning from your mistakes and paying afterward.

In some cases, clients whose information was leaked and exploited against them sue the company that has allowed it. It could cost you an arm and a lack as well as drastic reputation loss.

6. Comfort inclines people to return to you

Being able to pay easily and not see any security precautions on the interface is a big advantage for clients. It is highly convenient when a platform remembers your credit card details. Once a client subscribes, it is much more likely that they will return to your platform again, as it enables additional forms of marketing. However, in order to afford this, you must be one hundred percent sure that it is secure. Tokenization is a very easy way to do this.

7. Making your inner processes more secure

We have been talking about clients a lot, yet it is essential to remember that your company benefits from security enhancement too. Tokenization allows you to ensure that even in the case of hacking, all the inner information will be well-protected.

When used alongside other security measures, tokenization can guarantee one hundred percent protection.

Bottom line

Tokenization is lucrative for businesses as this level of security attracts more customers and ensures their comfort. In addition, it makes it easier to become compliant and avoid possible fines and restrictions. 

However lucrative it may be, the main reason to choose tokenization is to prioritize your clients and protect them from crypto criminals.  Providing the best and the most secure services you can is the ultimate key to being successful in your business.