SEC Commissioner Calls for Reduced Personal-Data Collection in Financial Institutions

SEC Commissioner Hester Peirce has called for financial regulators to reduce unnecessary personal-data collection, citing the risks of mishandling sensitive information. Speaking at the 2026 SIFMA Digital Assets Conference on September 23, Peirce criticized know-your-customer and anti-money-laundering systems that require institutions to gather extensive personal data.

Pierce argued that these systems can be overly burdensome and create a 'panopticon' where financial institutions have too much access to customers' personal information. She advocated for the use of cryptographic verification, such as attribute-based credentials and zero-knowledge proofs, which can verify facts without disclosing underlying personal data.

Pierce also suggested that regulators allow financial firms to rely more on trusted third-party identity verification, reducing the need for each institution to independently collect and retain customer records. She noted that large stores of personal information create a security liability for governments and private companies.