The correct solution is Store the data in an Amazon S3 bucket. Use S3 Object Lambda to transform and remove PII from the data before it is returned to applications that do not require PII. Amazon S3 Object Lambda allows you to add custom processing to data retrieval requests from S3. This means you can dynamically filter out PII at the time of access, based on which application is requesting the data, without duplicating or maintaining separate datasets. It provides a low-maintenance, cost-effective, and secure method of customizing data access in real time.

The option Store the data in an Amazon DynamoDB table. Implement a proxy application layer to filter or mask PII based on the application making the request adds significant operational overhead. Managing a proxy layer introduces additional development, deployment, scaling, and monitoring responsibilities, which increases complexity unnecessarily.

The choice Preprocess and write three versions of the data into three separate Amazon S3 buckets, each tailored to the needs of a specific application is functional but not efficient. Maintaining multiple copies of datasets can be expensive in terms of storage costs and increases the complexity of keeping the data synchronized and consistent.

The option Transform the data and store it in three separate Amazon DynamoDB tables, each with different levels of access for different applications is similar to the previous choice but even less efficient for large volumes of data. DynamoDB is not optimized for analytical use cases or large dataset storage when compared to S3, and maintaining separate tables adds complexity and cost.

This question highlights the importance of secure data handling and the need for a scalable solution that allows fine-grained access control without duplicating data. A helpful tip is to look for services that allow real-time data customization without replicationS3 Object Lambda is purpose-built for such use cases.

The challenge here lies in identifying the solution with the lowest operational overhead that still enforces strong data governanceS3 Object Lambda meets both criteria effectively.

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