Pseudonymisation

What it means

Pseudonymisation processes personal data so that it can no longer be attributed to a specific person without additional information kept separately. The name is replaced by an identifier and the key is held apart.

It is not anonymisation. Anonymised data can never identify the person again and falls outside GDPR; pseudonymised data is still personal data, merely better protected.

Pseudonymisation differs from encryption in what can still be done with the data. An encrypted file is unreadable as a whole without the key, whereas pseudonymisation replaces only the identifiers and leaves the rest readable. That data can still be analysed, for example in a data warehouse, which is why the two measures are often combined.

How it works in practice

In practice it is used when testing systems on real data, in analysis, and when handing material to third parties. The regulation names it as an example of an appropriate technical measure alongside encryption.

It only works where the key is separated organisationally as well as technically - a different system, different access rights, a different person. A mapping table in the same database is pseudonymisation on paper only.

In payroll, pseudonymisation helps when a company sends salary data for a cost analysis or to an adviser benchmarking pay. Names are replaced by employee numbers, the mapping table stays in the payroll system, and the recipient sees only positions, gross pay and premiums.

What to watch out for

Reduced risk does not remove obligations: the duty to inform, purpose limitation and retention periods all still apply, and a supplier still needs a data processing agreement. Note too that even without a name, a combination of attributes often identifies someone.

A leak of pseudonymised data is not automatically a non-event. If the key leaked too, or the person can be traced from the remaining data, it is treated as an ordinary personal data breach with all the duties that follow. So where the key is stored and who can reach it is documented in advance.