Format-Preserving Encryption vs Tokenization

Format-Preserving Encryption vs Tokenization

Written by:
Format-Preserving Encryption vs Tokenization

Watch the Webinar

Get started for Free
Learn More
ALTR eBook: Level Up your Cloud Data Security with Tokenization

Download Now

Protecting sensitive data is paramount in today's digital landscape. But choosing the proper armor for the job can be confusing. Two major contenders dominate the data governance and data security ring: Format-preserving Encryption (FPE) and Tokenization. While both seek to safeguard information, their mechanisms and target scenarios differ significantly.

Deciphering the Techniques

Format-preserving Encryption (FPE)

Format-preserving encryption is a cryptographic technique that secures sensitive data while preserving its original structure and layout. FPE achieves this by transforming plaintext data into ciphertext within the same format, ensuring compatibility with existing data structures and applications. Unlike traditional encryption methods, which often produce ciphertext of different lengths and formats, FPE generates ciphertext that mirrors the length and character set of the original plaintext.

Why Is This Important

Compatibility: FPE allows companies to encrypt sensitive data while preserving the format required by existing systems, applications, or databases. This means they can integrate encryption without needing to extensively modify their data structures or application logic, minimizing disruption and avoiding potential errors or system failures arising from significant changes to established data formats or application workflows.

Preserving Functionality: In some cases, the functionality of applications or systems may rely on specific data formats. FPE allows companies to encrypt data while preserving this functionality, ensuring that encrypted data can still be used effectively by applications and processes.

Performance: FPE algorithms are designed to be efficient and fast, allowing for encryption and decryption operations to be performed with minimal impact on system performance. This is particularly important for applications and systems where performance is critical.

Data Migration: When migrating data between different systems or platforms, maintaining the original data format can be essential to ensure compatibility and functionality. FPE allows companies to encrypt data during migration while preserving its format, simplifying the migration process.


Tokenization is a data protection technique that replaces sensitive information with randomly generated tokens. Unlike format-preserving encryption, which uses algorithms to transform data into ciphertext, tokenization uses a non-mathematical approach. Instead, it generates a unique token for each piece of sensitive information and stores sensitive information in a secure database or token vault (read more about ALTR's PCI compliant vaulted tokenization offering). The original data is then replaced with the corresponding token, removing any direct association between the sensitive information and its tokenized form.  

Why Is This Important

Enhanced Security: Tokenization helps improve security by replacing sensitive data such as credit card numbers, bank account details, or personal identification information with tokens. Since tokens have no intrinsic value and are meaningless outside the system they're used in, malicious actors cannot exploit them even if intercepted.

Scalability: Scalability is a crucial strength of tokenization systems, stemming from their straightforward mapping of original data to tokens. This simplicity enables easy management and facilitates seamless scalability, empowering companies to manage substantial transaction volumes and data loads without compromising security or performance, all while minimizing overhead. This scalability is especially vital in sectors with high transaction rates, like finance and e-commerce, where robust and efficient data handling is paramount.

Interoperability: Tokenization can facilitate interoperability between different systems and platforms by providing a standardized method for representing and exchanging sensitive data without compromising security. 

System Integration: Tokenization systems often offer straightforward integration with existing IT infrastructure and applications. Many tokenization solutions provide APIs or libraries, allowing developers to incorporate tokenization into their systems easily. This ease of integration can simplify adoption and reduce development time drastically.  

Real World Scenarios

Using Tokenization over FPE

Consider a financial institution that needs to securely store and process credit card numbers for various internal systems and applications.  Instead of encrypting the credit card numbers, which could potentially disrupt downstream processes that rely on the original format, the company opts for tokenization.

Here's how it could work: When a credit card number is created or updated, the unique and identifiable numbers are replaced with randomly generated tokens. These tokens are then used to reference the original sensitive information, securely stored in a separate database or system with strict access controls.

When authorized personnel need to access or use the encrypted credit card numbers for legitimate purposes, they can retrieve the tokens and use them to access the stored sensitive information.  This allows the company to maintain compatibility with existing systems and processes that rely on the specific format of credit card numbers, such as payment processing or customer account management.

By implementing tokenization in this scenario, the organization can streamline access to data while ensuring that sensitive information remains protected.  

Using FPE over Tokenization

One scenario where a company might choose format-preserving encryption (FPE) over tokenization is in the context of protecting sensitive data while preserving its format and structure for specific business processes.

Imagine a healthcare organization that needs to securely store and share patient records containing personally identifiable information, such as names, addresses, and medical histories. Instead of tokenizing the entire document, which could slow down access and processing times, the organization decided to encrypt specific fields within the documents containing sensitive information.  

Here's how it could work: When a patient record is entered into the system, FPE is applied to encrypt sensitive fields, such as patient name, address, and medical record number, while preserving its original format. The encrypted data maintains the same structure, length, and validation rules as the original fields.

When authorized personnel need to access the patient records for legitimate purposes , they can decrypt them using the appropriate encryption keys.  This allows for efficient retrieval and processing of data without compromising security.

By using FPE in this scenario, the company can ensure that sensitive data remains protected while maintaining the integrity and usability of the data within its business operations. This approach balances security and functionality, allowing the company to meet data protection requirements without sacrificing operational efficiency or compatibility with existing systems.

Wrapping Up

Format-Preserving Encryption (FPE) and Tokenization offer practical strategies for securing sensitive data. By understanding each technique's unique advantages and considerations, organizations can make informed decisions to safeguard their data, protect against potential threats, and foster trust with customers and stakeholders.

Related Resources