Sheji Valiyakath
Managing Partner at Kreston SVP Chartered Accountants
Data tokenisation – the key to cyber security
April 28, 2026
In a world where almost everything is digital, we use the internet for nearly all aspects of daily life. From shopping and banking to communication and entertainment, our personal and financial information is constantly being shared and stored online. Hence, protecting sensitive data has become more important than ever. Cybercriminals are constantly finding new ways to exploit vulnerabilities, and organisations must proactively protect the data of their customers and employees. This is where data tokenisation emerges as a powerful tool in strengthening cybersecurity.
What is data tokenisation and how does it protect sensitive information?
“Data tokenisation is a process that replaces sensitive information with a random string of characters called a token,” said Sheji Valiyakath, Managing Partner, Kreston SVP. “This token acts as a substitute for real data but has no value on its own. It allows organisations to continue processing and storing data without exposing the original information. Companies like Visa, Mastercard, Amazon, and PayPal, actively use tokenisation to handle millions of transactions daily to secure customer data and transactions.”
Challenges, costs, and best practices for effective tokenisation
While tokenisation is highly effective, there are a few challenges. Setting up a tokenisation system requires time, planning, and technical expertise. Organisations need to integrate it with their existing systems, which can be a complex process.
Maintaining a secure token vault and supporting systems can be expensive, especially for small businesses. The token vault is the only place where real data is stored. If it is compromised, the entire system could be at risk. Organisations must implement multiple layers of security to protect the vault.
“There are also performance considerations,” said Sheji. “In some cases, tokenisation slows down processes because data needs to be converted into tokens and retrieved when necessary. Tokenisation alone cannot guarantee full security. It must be combined with other cybersecurity measures. A cybersecurity audit is vital.”
But there is no question as to whether or not organisations should be implementing tokenisation, but how to implement it effectively. In today’s world of evolving cyber threats and strict global regulations, tokenisation, supported by continuous auditing, is no longer just a security tool; it is a foundational requirement for long-term organisational resilience and success.
