To identify personally identifiable information (PII) within a database, developers can utilize N1QL's tokenizer function in combination with regex functions and secondary indexes. This allows them to detect patterns such as unencrypted credit card numbers and social security numbers. By using the `TOKENS` function with the `"specials"` flag, developers can preserve the original document content while still identifying PII. Memory-optimized secondary indexes (MOI) can be used to speed up query performance, especially when combined with tokenization. The approach involves creating queries that utilize these features to identify specific patterns in the data, and can be implemented using tools like Docker and Node.js.