US Securities and Exchange Commission (SEC) Commissioner Hester Peirce wants financial firms to stop stockpiling customer data after breaches exposed the cost of mandatory identity collection.

This week, the SEC Commissioner called for wider use of reusable digital credentials that could establish facts about customers without requiring every financial institution to collect the underlying personal information again.

“Today society is at a crossroads. Down one path lies the status quo: more data collection, more intermediary surveillance, more “know your customer' requirements that turn our financial rails into a panopticon. Down the other path lies an opportunity to use new technologies to improve our ability to catch criminals while collecting less personal information than ever before, and monitoring more sparingly to protect Americans’ privacy.”

Her remarks follow recent security incidents at major financial platforms like Revolut that exposed identity documents, addresses, and other information these companies collect to meet customer-verification and anti-money-laundering requirements.

Peirce said regulators should reconsider whether institutions need particular pieces of information or merely need confirmation of the facts those records establish. Attribute-based credentials, she said, could prove whether someone meets an age requirement, holds a particular citizenship or appears on sanctions lists without revealing information such as their name, income or address.

“Does more than one firm need to collect it?” Peirce asked, arguing that technology already exists to reduce the information customers surrender and the number of institutions that receive it. She said the remarks represented her own views rather than those of the SEC.

The question is becoming more consequential as Washington builds a new compliance regime for stablecoins.

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