December 9, 2025

Security You Can Verify: Our Privacy-First Approach Explained

This year, businesses have faced data breaches they have never seen before: according to IBM’s 2025 Cost of a Data Breach Report, the average cost of a data breach in the US in 2025 has reached an all-time high – $10.22 million. Leaked personally identifiable information (PII) includes not only emails and phone numbers but also sensitive data: ID document images, biometric data, financial information, and other sensitive records. Even more surprising is that approximately 30% of all data breaches involve third-party vendors – this share has doubled since 2024.

Intruders often cannot directly hack into a company’s servers, so they seek out its third-party vendors that lack strong security protocols. Such vendors, especially if they provide age verification or customer registration services, may possess users’ PII. Does this actually mean that companies must simply trust the external services they work with? Of course not, and this is what our privacy-first approach is about.

In this text, we look at existing personal data protection standards, review three of the most notable data breaches in 2025, explain why they keep happening even when regulatory compliance is claimed, and then show how following the privacy-first principles could counter such incidents.

Images sources: Piiano, ProgrammerHumor, Reddit, Make a Meme

Standards Help – Until They Can’t

Consequences of data breaches occur not only in the shape of multi-million dollar fines but also in the loss of client loyalty. Once PII is leaked, a person is at ongoing risk of fraud. To address this, an extensive framework of personal data protection standards has emerged – global, national and industry-specific regulations are aimed to define how companies must collect, store, process, and transmit users’ information. Let’s take a closer look at some of the most influential ones:

The General Data Protection Regulation (GDPR) is the cornerstone of global data privacy legislation, enforced across the European Union since 2018. It sets strict rules on how organizations must handle personal data – requiring explicit user’s consent, minimization of the data collected, and transparency in processing. The regulation applies to any company (regardless of its location) that processes EU citizens’ personal data. Non-compliance can lead to severe financial penalties: up to €20 million or 4% of a company’s annual global revenue, whichever is higher. Besides fines, violations often cause lasting reputational damage and trigger investigations across multiple jurisdictions.
The Personal Information Protection Law (PIPL) – China’s data privacy regulation enacted in 2021 which is often described as the Chinese equivalent of the EU’s GDPR. It is built on the same principles of minimum necessity and transparency and similarly applies to any company that processes the personal information of individuals in China. In addition, the PIPL requires specific approval for cross-border data transfers. Violations of this law can result in fines up to CNY 50 million (~$7 million) or 5% of a company’s annual global revenue, suspension of operations, and even personal liability for executives.
The Gramm-Leach-Bliley Act (GLBA) is a key US federal law that governs processing of consumers’ PII held by financial institutions. Although the GLBA was enacted in 1999, it is regularly updated with more and more requirements added. The act obligates companies to explain to customers what data they collect, provide them with an opt-out option, and implement special safeguards in order to avoid social engineering fraud. As well as two previously mentioned regulations the GLBA applies to any company that does business in the US or serves US customers. Fines can reach $100 000 per violation for institutions, and officers can be imprisoned for up to 5 years.

Despite the steady stream of new standards and regulations, data breaches have not diminished. A service that processes PII can publicly claim regulatory compliance, yet fail to follow it in practice. Furthermore, as fraudulent schemes continuously evolve, hackers can steal sensitive data from a fully compliant service, once the data has been saved or transmitted off the user's device. In other words, «paper compliance» alone does not stop attackers or eliminate the risk of sensitive data being intercepted.

2025’s Wake-Up Calls: Three of the Year’s Most Significant Data Breaches

This year has seen an unprecedented surge in data breaches worldwide – below we review three of the most notable cases that exposed critical vulnerabilities in corporate data protection.

Connex Credit Union, one of Connecticut's largest credit unions, has confirmed a data breach that affected approximately 172 000 individuals in early June. According to reports, attackers gained access to clients’ PII such as names, addresses, Social Security numbers, and government-issued IDs used by customers to open their accounts. Stolen personal and financial identifiers can be exploited for identity theft, phishing, and fraud to this day.
Several Italian hotels in cities such as Venice and Trieste had their vacationers’ personal data leaked around June-July 2025. Allegedly, 70 000 identification documents that guests must provide during registration were obtained by a criminal hacker group. High resolution scans of these documents, including passports and ID cards, are typically copied at reception and uploaded to hotels’ servers – by hacking into them, fraudsters easily get full access to many vacationers’ PII. Now they are being offered for sale on the dark web at prices ranging from €800 to €10 000.
Discord, a widespread social network, in October 2025 identified approximately 70 000 users who may have had their government ID photos exposed. As stated, the source of this data breach was not Discord itself, but its third-party vendor for age verification services. Later, the vendor’s access to user records was revoked, leaving the platform to seek a replacement provider.

Together, these three cases illustrate how much risk companies face when their clients’ PII is stored or transmitted. This may feel even more acute once the personal data is transmitted to external services – in such cases, a vendor's security vulnerability can be equally damaging.

So Is It Even Possible to Work with Third-Parties without Relying on Trust?

Every day, OCR Studio proves to its clients all over the world that trust is an unnecessary factor in cooperation with vendors. The approach we adhere to is called privacy-first. According to its principles, genuine security is not achieved solely through regulatory compliance or encryption of the transmitted data – it is built directly into the system’s architecture. In other words, trust is replaced with verifiable technical isolation – a security model where breaches become technically impossible, not just legally punishable.

*Privacy-first is a security architecture complex of principles that remove trust as an assumption from every stage of data processing. It ensures that sensitive information is processed entirely within the user’s device. In short, privacy-first replaces trust with technical certainty.*

The privacy-first approach is attained by following several rules. First of all, the system must not save PII at all. For instance, we achieved that by creating an algorithm that compares a user's selfie and ID document photo in real-time – it doesn’t need to save biometrics or ID document data to run effectively. Secondly, user data must not be transmitted anywhere. It is actually possible if systems’ functionality is available entirely on-device – like our systems, which do not need external servers or clouds to operate and rely on privacy-preserving technology to process data locally.

Additionally, all of our systems can operate without an internet connection as the calculations are performed locally right on the user’s device. To make sure, you can install our free demo app and try our face comparison, document recognition, and other modules with airplane mode on.

Our software solutions follow the privacy-first approach from beginning to end. This lets our clients verify their customers using any identification documents, perform age checks, and automatically conduct high-accuracy data extraction from documents securely across both digital and physical channels. We serve industries where reliable document processing is critical: banking and fintech, public sector, telecom, travel, and hospitality.

Where Could Privacy-First Systems be Implemented?

Even though our solutions satisfy such a stringent approach as privacy-first, they stay device-independent. OCR Studio’s technologies are delivered as lightweight, fully functional SDKs that can be embedded directly into the customer’s systems. For mobile applications, we provide SDKs for iOS and Android, and for web environments, we offer browser-based SDKs that allow users to scan and verify IDs without installing additional software. For enterprise and backend use cases, we provide server-side SDKs and APIs that can be easily integrated into existing infrastructure or workflow automation scenarios, all built on privacy-first identity verification architecture.

No matter what platform you choose, the functionality and accuracy remain the same. This approach ensures that our solutions adapt to the customer’s needs – whether it is a bank integrating document checks into its mobile app, a government service building a secure online portal with privacy-enhancing technology, or an enterprise automating its workflows.

Conclusion: Compute, Don’t Collect

As long as organizations rely on outsourced processing and cloud-based infrastructure to handle sensitive information, their users’ data remains only as secure as the weakest link in their vendor chain. If you deal with passports, IDs, or face images, the safest path is to compute locally and keep data off the network. That way, customers place their trust where it belongs – in you, not in your subcontractors. The privacy-first approach makes that default real: no transmission, no storing, no internet – and no surprises. Learn more about OCR Studio’s privacy-first solutions.