Encryption for GDPR Compliance: How StratoKey Secures SaaS Data 2025

The General Data Protection Regulation (GDPR 2016/679) unified data protection laws across the EU on 25 May 2018. It applies to any organization that processes or stores personal data of EU residents. Non-compliance can result in penalties of up to €20 million or 4% of global turnover.

GDPR strengthens individual privacy rights and requires organizations to apply appropriate technical and organizational measures. Encryption is one of the most effective ways to meet this requirement.

The Purpose of GDPR

GDPR is designed to strengthen and unify protections for individuals' personal information across EU member states. GDPR specifically states, "The protection of natural persons in relation to the processing of personal data is a fundamental right". With these stronger individual rights comes an increased obligation for organisations handling personal data to appropriately secure this data, or face penalties.

GDPR Penalties

Pecuniary penalties are mandated by GDPR. This regulation establishes the imposition of penalties for the mishandling of personal data. Maximum fines of 20 million Euros or up to 4% of annual worldwide turnover (whichever is greater) can be applied for breaches of GDPR. In addition to financial penalties, organisations can be further sanctioned with bans from processing or suspension of data transfers through to criminal penalties.

GDPR covers personal information that relates to a natural person. Recital 26 S. 1 GDPR states "The principles of data protection should apply to any information concerning an identified or identifiable natural person". Furthermore, Recital 34 S 1 specifically states that sensitive personal data is data that exerts "risk to the rights and freedoms of natural persons, of varying likelihood and severity, may result from personal data processing which could lead to physical, material or non-material damage".

Privacy by Design

One interesting piece of GDPR is the requirement for organisations to consider the Privacy by Design paradigm for systems architecture. This architecture takes a privacy-first (privacy by default) approach to handling personal data. Privacy by Design sets out 7 fundamental principles:

1.    Proactive not reactive; Preventive, not remedial
2.    Privacy as the default setting
3.    Privacy embedded into design
4.    Full functionality is positive-sum, not zero-sum
5.    End-to-end security, full lifecycle protection
6.    Visibility and transparency, keep it open
7.    Respect for user privacy, keep it user-centric

GDPR mentions encryption as an appropriate mechanism for protecting personal data. Under GDPR Article 34, encryption has the specific benefit of removing the requirement to notify data subjects (individuals) in the event of a data breach, as it is considered an appropriate "technical measure" that renders data "unintelligible to any person who is not authorised to access it". 

Encryption and GDPR Compliance

Article 32(1)(a) of GDPR identifies encryption and pseudonymisation as key measures for securing personal data. Encryption is not mandatory but is considered appropriate when processing activities that pose a high risk to individuals.

Encryption can:

• Maintain confidentiality and integrity of data.

• Remove the obligation to notify individuals in certain breach scenarios if the data is unreadable.

• Support the GDPR principle of privacy by design under Article 25.

Encryption must be implemented alongside data governance, access controls, and accountability measures. The requirement to pair encryption with governance, access control, and accountability is supported by Articles 5, 24, 25, and 32 of the GDPR. Encryption is one layer within a holistic framework of organisational and technical controls designed to ensure lawful, secure, and accountable data processing.

The Cloud Challenge and GDPR Compliance

Cloud and SaaS applications create additional exposure points for personal data. Native encryption features offered by SaaS and cloud providers often do not meet compliance or sovereignty standards because:

• Providers usually control the decryption keys, limiting customer control.

• Data is stored or processed in multiple jurisdictions, creating legal exposure.

• Integrations, AI features and APIs can reintroduce plaintext into third-party systems.

• Encryption operations occur within the provider’s environment, where plaintext may still be accessible.

• Even “sovereign cloud” offerings are not immune; data can remain subject to foreign legislation such as the U.S. CLOUD Act, which allows lawful access requests beyond EU borders.

To maintain GDPR compliance, organisations should encrypt or tokenise personal data before sending it to cloud services.

StratoKey Cloud Data Protection Platform

StratoKey provides a Cloud Data Protection (CDP) Platform designed to secure sensitive information before it enters SaaS or cloud systems.

Key features include:

• Field-level encryption using FIPS 140-3 validated AES.

• Tokenisation that substitutes sensitive values while maintaining SaaS functionality.

• Key management separation ensures the organisation retains full control of encryption keys.

• Audit and monitoring features for compliance reporting support.

StratoKey’s gateway architecture ensures sensitive data is protected at the point of entry without disrupting business workflows.

Why Encryption Matters for GDPR

Encryption for GDPR compliance is about maintaining control over who can access and process personal data.

• Lower breach risk and limit disclosure obligations.

• Demonstrate compliance with Articles 25 and 32.

• Maintain sovereignty across multi-cloud environments.

Beyond GDPR: The Rise of NIS2

While GDPR focuses on protecting personal data, the NIS2 Directive (EU 2022/2555) expands these expectations to the cybersecurity of essential and important entities across sectors such as energy, manufacturing, healthcare, and digital infrastructure.

NIS2 mandates “state-of-the-art” technical and organisational measures, including encryption, incident management, and supply-chain risk controls. It builds on GDPR’s risk-based accountability model to strengthen resilience across critical digital operations.

Together, GDPR and NIS2 create a complementary framework: GDPR governs data protection, while NIS2 ensures the underlying systems that process that data remain secure and resilient.

Read More: The NIS2 Directive, What You Need To Know

Take Control of Your Cloud Data

Organisations adopting SaaS and cloud platforms must protect personal data at the source. StratoKey’s Cloud Data Protection Platform enables encryption, tokenisation, and data sovereignty for full GDPR alignment. Download our GDPR Encryption Guide to learn more.