In the past two months, the financial sector has once again been reminded of a hard truth. Sensitive data remains one of the most valuable attack targets.
In late 2025 and early 2026, a major breach at 700Credit exposed the names dates of birth and Social Security numbers of more than 5.6 million Americans through a compromised third-party API that served credit reporting services. Attackers were able to extract highly sensitive records because those records were stored and shared widely across service integrations without strong proof mechanisms in place.
More recently, Lloyds Banking Group became the subject of a privacy investigation over internal access to employee financial data. This case highlights a different but equally critical risk. Even without external attackers, centralized data storage enables misuse, compliance failures, and loss of trust.
For users, these incidents hit home because they show how sensitive financial profiles can be exposed simply by virtue of being stored in centralized systems or shared across APIs. Once PII and credit history are leaked they become fodder for identity theft fraud and long term financial harm.
These incidents point to a deeper structural problem in how financial security is designed today.
Breach Driven Security and Its Structural Weakness
Most financial platforms still operate under a traditional breach driven security model. The assumption is simple. Collect and store as much data as possible, protect it with perimeter defenses, and respond when something goes wrong.
In practice, this model leads to:
- Large scale storage of PII, credit histories, and transaction records
- Expanding internal access surfaces across teams and vendors
- High impact failures when defenses are bypassed or misused
When sensitive data exists in bulk, breaches are not edge cases. They are eventual outcomes.
Why Centralized Data Storage Fails Modern Financial Users
For users of digital finance platforms, the risk is not abstract. Every onboarding flow, credit check, or compliance process requires sharing raw personal data.
The consequences are clear:
- Identity information remains exposed long after a breach is disclosed
- Financial histories can be reused, resold, or correlated across systems
- Users lose control over how long and where their data is stored
Trust erodes not because platforms lack security tools, but because they rely on storing data they do not truly need.
Proof Driven Security as a New Security Paradigm
Proof driven security starts from a different assumption. Most financial interactions do not require raw data. They require answers.
- Is this user compliant
- Does this account meet a threshold
- Is this transaction within allowed limits
With zero knowledge technology, these questions can be answered through cryptographic proof rather than data disclosure. The platform verifies a statement, not the underlying information.
This shifts security from defense after exposure to prevention by design.
Why Open Finance Requires a zk Layer
Open finance depends on data portability, interoperability, and regulatory trust. Without a zk layer, these goals increase risk by multiplying data copies.
A zero knowledge (zk) layer enables proof driven security by allowing one party to prove a statement about data without revealing the data itself. In open finance, this means verifying creditworthiness identity or compliance criteria without exposing sensitive records. For example, a borrower could prove they meet a credit threshold without revealing full credit history. A lender could verify income without holding salary records.
Instead of expanding attack surfaces, open finance can become safer as it scales.
How zkMe Enables Proof Driven Security in Practice
zkMe applies proof driven security across 3 core pillars, each designed to replace data storage with verifiable proof.
- Compliance Solution
Platforms can confirm regulatory requirements such as eligibility or jurisdiction without collecting full identity datasets. Compliance is achieved without permanent exposure.
- Financial Data Solution
Financial attributes like balances, income ranges, or credit conditions can be proven without sharing transaction histories or raw statements.
- Agentic Solutions
Autonomous agents generate and verify proofs on demand. They act as intermediaries that reduce trust assumptions and eliminate centralized data accumulation.
Together, these solutions move financial platforms from storing everything to proving only what matters.
Ready to unleash the power of proof driven security?
Contact zkMe now!
Rethinking the Future of Financial Security and Privacy
Users today are rightfully concerned about how their financial data is stored used and protected. High profile breaches like the 700Credit API compromise highlight the shortcomings of breach driven security where sensitive data remains a juicy target for attackers.
A shift toward proof driven security fortified by a zk layer offers a new paradigm. It enables open finance without the constant risk of exposing credit histories and PII. What's more important, it changes how users experience finance.
Onboarding becomes faster because less data is requested. Compliance becomes quieter because verification happens in the background. Privacy becomes durable because sensitive information never leaves the user’s control.
As zk layers mature, financial platforms can offer services that are more open, more compliant, and more respectful of personal data. Security shifts from being a hidden cost to a visible trust advantage.
The future of open finance is not built on stronger walls around data. It is built on systems that no longer need to hold the data at all.
About zkMe
zkMe provides protocols and oracle infrastructure for the compliant, self-sovereign, and private verification of Identity and Asset Credentials.
It is the only decentralized solution capable of performing FATF-compliant CIP, KYC, KYB, and AML checks natively onchain, without compromising the decentralization and privacy ethos of Web3.
By combining zero-knowledge proofs with advanced encryption and cross-chain interoperability, zkMe enables verifiable identity and compliance data to remain entirely under the user's control. This ensures that sensitive information never leaves the user's device while maintaining regulatory-grade assurance for partners and protocols.
