When database security is not enough: How the cloud makes application-level encryption a must

With data breaches and cyberattacks making headlines every other day, companies are under huge pressure to keep sensitive information safe. While traditional database encryption is still a key part of security, it’s no longer enough to protect against more advanced threats. That’s where application-level encryption comes in.

By encrypting data right at its source within apps, before it even hits databases or networks, application-level data encryption helps fill the gaps that traditional, infrastructure-focused security systems miss.

Let’s dive into why this approach offers some serious security benefits.

Limitations of database encryption

Database encryption, such as Transparent Database Encryption (TDE), protects data at rest by encrypting storage media or the actual database files. This means that if someone physically steals the storage device or gains unauthorized access to the database files, the data is unreadable without the decryption key. It’s a good defense against things like stolen hard drives or unauthorized access to server files.

While TDE was once a reliable method for securing data at rest, its effectiveness has significantly diminished with the shift to cloud computing. Hyperscalers, such as major cloud providers like AWS and Google Cloud, excel at physical security—far beyond what any individual company or startup could achieve on its own. However, since this physical infrastructure is now accessible via Application Programming Interfaces (APIs), the responsibility for data security has shifted primarily to the application layer. As a result, TDE, which only protects data when it's stored, is no longer sufficient. Once the data is accessed or transmitted—whether through a compromised application or during transmission over a network—it’s no longer encrypted unless additional security measures are implemented. This creates critical gaps in security, leaving data vulnerable to attackers who can exploit weaknesses at the application level.

Additionally, TDE doesn’t protect against insider threats, like employees or trusted users who have legitimate access to the encrypted database but may abuse it. It also doesn’t safeguard data in the event of a cyberattack that doesn’t involve direct access to the storage media, such as SQL injection attacks or ransomware targeting the database itself.

SQL injection and other application-layer exploits can extract sensitive data before it reaches the database. A 2023 IBM study found that 63% of breaches involving encrypted databases stemmed from application vulnerabilities, not database infrastructure. Traditional encryption does nothing to mitigate these risks.

From all these, we understand that while TDE adds an important layer of protection, it’s not a comprehensive solution on its own, especially when dealing with more sophisticated threats or data in use. This is where additional security methods, like application-level encryption, come in to provide more robust protection.

How application-level encryption works

Application-level encryption works by encrypting data directly within the application before it even gets stored in a database or transmitted over a network. Essentially, the application takes responsibility for ensuring that sensitive data is encrypted from the moment it’s created or entered all the way through to its storage and usage.

For example, imagine you're using an online banking app, and you decide to transfer money from your account to someone else. Let's see how application-level encryption works:

1. First, you enter the recipient’s bank account number and the amount of money you want to transfer.
2. Before this data even reaches the bank's database or network, the banking app encrypts the recipient’s bank account number and the transfer details using a strong encryption algorithm (for example, AES). The app takes this step before the data is sent to the database or transmitted over the network.
3. The encrypted data, such as the recipient's account number, is then stored in the database as gibberish—meaning, it is useless to anyone who gains unauthorized access to the database because, without the decryption key, they can’t make sense of it.
4. Later, when the bank processes your transaction or when you check the status of your transfer, the banking app retrieves the encrypted data from the database. The app then decrypts it locally on the server side (where only the bank’s app has access to the decryption key), turning it back into readable information, such as the actual bank account number and the amount of money.

The encrypted data stays protected using this flow even while it’s in transit. Even if a hacker intercepts the data transmitted between the app and the bank’s servers, they’ll see only encrypted text, not sensitive details.

Benefits of application-level encryption

Integrating cryptographic operations directly into application logic offers multilayered protections:

• End-to-end data protection across systems: By encrypting data within the application, sensitive information remains secured across all subsequent layers:
  
  • In transit: Encrypted payloads traverse networks and APIs without exposing plaintext, even if TLS fails.
  • In databases: Stored data appears as ciphertext, rendering database compromises ineffective.
  • In logs and caches: Debug logs and in-memory caches inadvertently storing sensitive data contain only encrypted values.‍
• Granular control over data access: Application-level encryption enables field-specific protection, allowing developers to encrypt only high-risk data elements like Social Security numbers while leaving non-sensitive fields unencrypted for efficient querying. Financial institutions use this approach to secure account balances while permitting aggregate calculations on non-encrypted transaction metadata.‍
• Protection against insider and third-party vendor threats: When encryption keys are managed outside databases—in hardware security modules (HSMs) or cloud key management services—organizations can enforce separation of duties. DBAs, cloud engineers, and third-party vendors gain no access to decryption keys, effectively eliminating their ability to misuse data. A 2024 Forrester report noted that companies adopting application-level encryption reduced insider-related breaches by 78% compared to those relying solely on database encryption.‍
• Resilience against full system compromise: Even if attackers gain control of application servers, properly implemented application-level encryption limits damage. Keys can be stored in tamper-proof HSMs, ensuring that memory dumps or runtime injections yield only encrypted data. The 2025 breach of a major retail platform demonstrated this: although hackers accessed customer databases, all payment details remained encrypted because the application had isolated keys from the compromised environment.

Implementation considerations and best practices

Adopting application-level encryption requires careful planning:

• Key management architecture: Implement a secure key management process. Use a dedicated Key Management Service (KMS) or Data Vault to generate, store, and rotate encryption keys securely.
• Performance optimization techniques: Encrypting individual fields (e.g., emails) rather than entire records minimizes computational overhead. Indexing encrypted data using deterministic encryption or tokenization allows efficient querying without decryption.
• Minimize exposure of decrypted data: Limit the number of instances where decrypted data is accessible. For example, only decrypt data when necessary for processing or display, and immediately re-encrypt it when no longer needed. The longer decrypted data is exposed, the greater the risk of it being compromised, especially if an attacker gains access to memory or application logs.
• Encrypt data in transit: Even with application-level encryption, unencrypted data could still be intercepted in transit without encryption on the transport layer. Always use HTTPS or other secure channels to protect data while it’s being transferred.
• Ensure data integrity: Along with encryption, implement data integrity checks (such as HMAC or digital signatures) to ensure that the encrypted data hasn’t been tampered with. If attackers can modify encrypted data without detection, they could introduce vulnerabilities. Adding cryptographic integrity checks helps confirm that the data hasn't been altered during storage or transit.
• Cryptographic agility: Design systems to support algorithm upgrades without data re-encryption. Format-preserving encryption (FPE) maintains data structure compatibility, enabling seamless migration from AES-128 to post-quantum algorithms like CRYSTALS-Kyber.

The future of data-centric security

Application-level encryption is a big step forward in data security, providing protection right where the data is created. Unlike database encryption, which only secures data when it’s stored, application-level encryption wraps sensitive information in a secure layer as it moves through systems. While there are some challenges, like managing encryption keys and optimizing queries, the security benefits far outweigh these issues.

As regulations like GDPR and CCPA impose stricter controls over personal data, application-level encryption will become mandatory rather than optional. Emerging standards such as NIST’s SP 800-193 emphasize "cryptographic protection at the data element level," pushing organizations to rethink encryption strategies.

In today’s world, where data is everywhere, businesses need to use application-level encryption to effectively fight against modern cyber threats. As cyberattacks get more advanced, encrypting data at the application level isn’t just a good idea—it’s crucial for staying secure in the digital world.