Pseudonymization

Pseudonymization is when personal data are stored in a way that they cannot be directly linked to an individual without supplementary information.

Glossary
Pseudonymization

Explained – what is pseudonymization?

Pseudonymization is a security measure whereby identifying data are removed or replaced with codes, numbers or other symbols. The aim is to reduce the risk that the data can be directly linked to a specific individual. The concept is used in the GDPR and is particularly relevant when processing sensitive personal data. A GDPR lawyer can assess when pseudonymization is an appropriate method for meeting data protection requirements. Unlike encryption, which renders data unreadable without a key, pseudonymised data remain readable but lack direct identifiers. In practice, this clarifies what is pseudonymization as a controllable measure within compliance.

When is pseudonymization relevant?

Pseudonymization becomes relevant when organisations process personal data while seeking to reduce risks to the data subject’s privacy. It is used, for example, in research projects, analysis of customer data or testing of IT systems. It complements the technical safeguard of encryption and makes it harder for unauthorised parties to identify individuals even if the data are exposed. This also addresses, at a practical level, what is pseudonymization in day-to-day operations.

Illustration of a privacy professional explaining pseudonymization on a data dashboard, showing masked user profiles, symbolising GDPR data protection and privacy-by-design.

Points to consider for pseudonymization

When organisations consider using pseudonymization there are several factors to take into account. Below are key points.

Ensure that the supplementary information that could restore identities is stored separately and securely to minimise re-identification risk.
Define clearly which data are to be pseudonymised and for what purpose; document the pseudonymization definition you apply.
Combine pseudonymization with other technical measures, for example encryption, to strengthen protection; think in terms of pseudonymization and encryption working together.
Document the method and purpose in the organisation’s data protection policies as part of a broader data protection strategy.
Train staff on when pseudonymization is sufficient and when other safeguards are required within your information security strategy.
Distinguish between pseudonymization and anonymisation – anonymisation is permanent, whereas pseudonymization can always be reversed with supplementary information.

Pseudonymization is not complete protection in itself and the GDPR applies to pseudonymised personal data. It should therefore be viewed as part of a broader information security and data protection strategy.

Pseudonymization

Why is pseudonymization important?

Pseudonymization is important because it reduces the risk that personal data can be directly linked to an individual. It enables data to be used for, for example, analysis or research without unnecessarily exposing the data subject’s identity.

The method works best when combined with other measures. While encryption protects data from unauthorised access, pseudonymization reduces linkage to a specific person even when data are accessible. Together, they strengthen the organisation’s overall data protection.

Pseudonymization also builds trust. Organisations that demonstrate careful handling of personal data, with respect for privacy, strengthen relationships with customers, employees and public bodies.

Pseudonymization means processing personal data so they can no longer be directly linked to an individual without supplementary information.

It is used when organisations need to analyse or process personal data but wish to reduce risks to the data subject’s privacy, for example in research or system testing. Pseudonymization can also help justify processing on the lawful basis of legitimate interests.

The difference is that encryption makes data unreadable without a key, while pseudonymization keeps them readable but without direct identifiers.

Encryption is a technical solution that requires decryption to restore the data.
Pseudonymization is a method that allows data to be used without directly identifying individuals.
Both measures complement each other under the GDPR (pseudonymization and encryption).

Anonymisation means personal data permanently lose the link to the individual, whereas pseudonymization can be reversed using supplementary information (anonymisation vs pseudonymization; difference between anonymisation and pseudonymization).

If the supplementary information is stored insecurely, the data can be easily re-identified, meaning the pseudonymization provides little real protection.

Always store the key separately from the data to reduce re-identification risk.
Implement access controls.
Document the process thoroughly.

As with encryption, the controller has primary responsibility. Senior management must ensure the method is applied correctly and integrated into the organisation’s data protection work.