Pseudonymization replaces identifiable information within a data record with one or more pseudonyms. With pseudonymization, the data can’t be linked back to an individual without additional information. Organizations may use pseudonymization to enhance data privacy and protection. European data protection laws like the General Data Protection Regulation (GDPR) strongly encourage companies to protect personal customer data with pseudonymization.
Encryption. Encryption is a data security measure designed to protect personal data. Encrypted data becomes unreadable – but if you hold the encryption key, you can decrypt the data and re-identify individuals.
Counter. Identifiers (e.g., name or email address) are replaced by a number chosen by a monotonic counter.
Random number generator (RNG). The RNG technique produces values with an equal probability of being selected from the total possibilities. These values are assigned to an identifier.
Enhanced data privacy. Since pseudonymization makes a data record unidentifiable, it improves data privacy protection.
Easier data processing. Pseudonymization reduces the risk of sensitive data exposure to unauthorized parties while still allowing companies to process or analyze the data.
Data could still be compromised. According to the GDPR, pseudonymized data is still considered personal data. Pseudonymization is a reversible process. If an encryption key is exposed during a data breach, pseudonymized data may still be at risk.