Legacy Vaulted Tokenization vs. Vaultless Format-Preserving Encryption (FPE) : What is Best for Your Business?

Encryption is essential for data privacy, transforming text into a coded form requiring a specific access key. Yet, its all-or-nothing approach can be problematic when partial access or flexibility is needed, complicating data management.

In scenarios where data must be shared with less trusted parties, it's important to reveal certain information while safeguarding sensitive details.

Data Tokenization offers a solution. It replaces a sensitive data element with a non-sensitive equivalent called a token, which has no inherent or exploitable value. There are two primary approaches to tokenization.

Legacy Vaulted Tokenization: A Traditional Approach

Vaulted tokenization replaces sensitive data with a unique token while storing the original data in a separate database (the "vault"). This vault is a secure map linking the token back to the original data.

How Legacy Vaulted Tokenization Operates

Legacy vaulted tokenization replaces sensitive data with a unique token while storing the original information in a secure central vault. For instance, a credit card number will be substituted with a random string of characters.

These tokens carry no value on their own and can only be linked back to the original data using the vault. Access to the vault with the original data is strictly controlled, ensuring only authorized users or systems can retrieve it.

The vault serves as a centralized repository for all sensitive data, allowing the tokens to be used in their place across different systems and applications.

Limitations of Legacy Vaulted Tokenization

The legacy vaulted tokenization approach has several notable drawbacks. As the amount of data increases, the central vault often becomes a performance bottleneck, slowing operations and limiting scalability.

This can disrupt applications and workflows that depend on quick access to tokenized data. Moreover, managing and maintaining the vault adds significant operational complexity and costs.

The most critical risk is that the central vault itself becomes a single point of failure. If it is breached, all sensitive data stored within it could be exposed, leading to serious security incidents and compliance violations.

For these reasons, vaulted tokenization is less practical for handling large-scale or modern data security requirements.

Vaultless Format-Preserving Encryption (FPE): The Modern Solution

Vaultless Format-Preserving Encryption (FPE) provides a more streamlined approach by encrypting sensitive data directly without a central vault. This method uses a symmetric encryption key to convert sensitive information into a token that retains the original data structure.

For instance, a credit card number remains in its familiar format, so it does not require change in schemas. These encrypted tokens are stored in the same database as the original data, eliminating the need for additional external repository.

When necessary, authorised and privileged users or systems can decrypt the data securely. By removing the reliance on a central repository vault, Vaultless FPE simplifies operations, eliminates major vulnerabilities, and reduce technology overhead.

Advantages of Vaultless Format-Preserving Encryption (FPE)

Data tokenization by means of vaultless FPE overcomes many of the challenges associated with vaulted tokenization. Without a central vault, delays caused by lookups are eliminated, leading to improved performance and faster access to tokenized data.

Its scalability makes it well-suited for large data environments, as it can handle significant volumes without slowing down. The format-preserving nature of FPE ensures that existing systems and applications can continue to operate without any changes.

Moreover, because the data is anonymized, it now can be used across analytics tools or AI models, so business can unlock its full potential.  These features make data tokenization a highly efficient and forward-thinking solution for modern data protection.

Key Differences

When to Choose Legacy Vaulted Tokenization

Legacy vaulted tokenization might be the right choice if your organization deals with relatively small datasets and already has a vault-based infrastructure. This approach may suffice for businesses where sensitive data is limited in volume and the existing system can handle the operational overhead of managing a central vault.

If your current setup is optimized for vault-driven operations and the potential performance bottlenecks of a vault are not a concern, sticking with legacy tokenization can be a straightforward and familiar solution for protecting sensitive data.

When to Choose Vaultless FPE

On the other hand, data tokenization with Vaultless Format-Preserving Encryption (FPE) is ideal for organizations requiring scalability and efficiency in managing large volumes of sensitive data.

This solution ensures high performance without the delays or complexities of a central vault. Additionally, using FPE to tokenize data is particularly beneficial when data must retain its original format for compatibility with analytics tools or legacy applications.

By reducing operational overhead and future-proofing your security strategy, data tokenization is a practical choice for modern businesses aiming for robust, scalable, and seamless data protection.

As organizations move toward modern data security practices, Vaultless FPE is a flexible and efficient alternative to traditional vaulted tokenization. It eliminates the vault while preserving data formats, simplifying operations while enhancing scalability and security.

Conclusion

If you want to reduce risks and improve performance, Vaultless FPE might answer your data security needs. Solutions like Fortanix’s Data Tokenization make implementing robust tokenization easier than ever without the drawbacks of legacy methods.

Connect with our Fortanix team to discuss the solution in detail.