Rethinking Data Collection in Identity Security

"As businesses continue to integrate sophisticated identity verification systems, the temptation to collect as much user data as possible grows. Unfortunately, this approach backfires. Storing excessive amounts of personal data, particularly in onboarding and KYC (Know Your Customer) flows, does not automatically lead to enhanced security. Instead, it expands the surface area for vulnerabilities and increases the potential scale of impact of security incidents."

"Beyond merely expanding the risk, over-collection of data also contradicts fundamental data protection principles. Laws such as the GDPR and CCPA emphasize data minimization, as they recommend only collecting and retaining the minimum necessary information. However, many organizations still hold onto excess data, increasing their exposure to legal scrutiny, regulatory fines, and long-term liabilities should a breach occur. Special and sensitive categories of data like biometric information only exacerbate the problem."

"With AI outpacing traditional identity verification measures, organizations are heavily investing in identity-first security solutions. However, prioritizing security can unintentionally lead to the trap of over-collecting user data. This poses significant risks for both cybersecurity and data privacy. The key to an effective security strategy lies not in collecting more information, but in focusing on the right data to ensure safety without unnecessary exposure."

AI-driven advances in identity verification have driven heavy investment in identity-first security, but excessive data collection undermines safety. Storing large volumes of personal data, especially during onboarding and KYC flows, increases attack surface and magnifies the impact of breaches. Over-collection conflicts with data minimization principles embedded in laws like the GDPR and CCPA and raises exposure to legal scrutiny, fines, and long-term liabilities. Sensitive categories such as biometrics attract additional regulatory attention and heighten compliance risk. Organizations reduce cybersecurity and privacy risk by identifying and retaining only the data strictly necessary for verification and operational purposes.

Read at Securitymagazine