What does the 700Credit breach show about the financial data system and supply chain risks, and what lessons can be learned?

By Kate O’Flaherty

In December, credit report and identity verification services provider 700Credit admitted it had suffered a data breach impacting 5.8 million customers.

The incident involved a compromised third-party API linked to the 700Credit web application. The breach was discovered in October 2025, but attackers gained access to the API in July, allowing them to steal sensitive data including names, dates of birth and social security numbers without being detected.

It was a failure of visibility and supply chain governance that all firms should be aware of. What does the 700Credit breach show about the financial data system and supply chain risks, and what lessons can be learned?

Application-Centric

Fintechs, lenders, dealers and credit bureaus all rely on huge integration networks, often with APIs that offer direct access to sensitive data. When one node in the network goes down, everyone downstream inherits the impact.

The 700Credit breach is a prime example of this vulnerability in action. With APIs allowing attackers to access customer data, the 700Credit incident shows “just how interconnected the financial ecosystem has become”, says Dan Kitchen, CEO, Razorblue.

Although the company’s internal network was not compromised, attackers were still able to access and exfiltrate large volumes of financial-grade identity data via a trusted application layer integration. “This demonstrates that, in contemporary financial ecosystems, APIs and web applications effectively are the system, and compromise at this layer can be just as damaging as a core network intrusion,” says Mark Johnson, head of presales security at ANS.

Large integration networks concentrate risk by creating high-value data access paths that bypass traditional controls, says Johnson. “APIs designed for efficiency and scale can become ‘straight-through’ conduits into sensitive personally identifiable information if over-privileged, insufficiently monitored or inadequately segmented.”

In the case of 700Credit, governance structures didn’t keep pace with the complexity of the ecosystem. 700Credit’s attackers’ prolonged dwell time suggests that governance mechanisms have “not evolved to match the operational complexity of API-driven ecosystems”, Johnson observes.

The 700Credit breach underscores a crucial point: 96% of API attacks come from authenticated sources, meaning attackers are not breaking in. They are instead using “legitimate, trusted credentials”, adds Eric Schwake, director of cybersecurity strategy at Salt Security.

Since most organisations underestimate their API inventory by 90%, these supply chain vulnerabilities can result in as much as 10 times the amount of leaked data seen in traditional breaches, he warns.

Opaque Financial Supply Chains

The 700Credit incident is just one example of how the financial data system has become too complex, interconnected and opaque for the level of governance applied to it. Most organisations have no clear map of where their data flows, how it’s accessed, which partners can query it, how they secure it and how quickly they disclose incidents.

Businesses “rarely have visibility beyond their immediate vendors, let alone the suppliers their vendors use”, says Razorblue’s Kitchen.

The complexity of these chains has now outpaced traditional governance structures, leaving organisations exposed to third-party and even fourth-party failures, such as a credit bureau using an API that relies on a cloud provider or data enrichment service with its own vulnerabilities, he says.

One of the core weaknesses in third party supply chain management is the lack of comprehensive visibility and control over vendors’ security postures, agrees Tracey Hannan-Jones information security consulting director, UBDS Digital. “Many organisations rely on external providers for essential services, but often fail to conduct rigorous, ongoing risk assessments or enforce standardised security controls across the supply chain. This creates blind spots where vulnerabilities can be introduced and exploited far too easily.”

Another significant weakness is the absence of robust contractual and technical requirements for third-party providers, says Hannan-Jones. “Organisations frequently lack clear, enforceable agreements that mandate security standards, incident response protocols and regular audits.  Even when such requirements do exist, enforcement and monitoring can be inconsistent, especially as the number of suppliers grows.”

Adding to the issue, cybersecurity teams usually don’t devote enough time or expertise to their third-party risks. The area is often seen as “tedious and repetitive”, says Pierre Noel, field CISO at Expel. “It’s extremely difficult to recruit seasoned cybersecurity specialists and convince them to perform a third-party assessment every week, month or year.”

Firms often fail to take into account the reality that third-party risks evolve, Noel points out. “The relationship you have with ‘company A’ might start small and evolve significantly a year or two later. Unless your program accommodates this dynamic expansion, a significant and high-risk third-party could go unnoticed until it’s too late.”

Regulatory Response

The 700Credit incident has had a significant regulatory impact, with the firm sending breach notices to multiple state attorney general offices, including Maine. The firm submitted a consolidated report to the Federal Trade Commission in coordination with the National Automobile Dealers Association and the incident was also reported to the FBI.

The regulatory response required after this type of incident shows that lawmakers increasingly view third-party failures as systemic risk. Overall, businesses “shouldn’t be overly optimistic about the reaction of the regulators to this type of issue”, says Expel’s Noel. They will generally advise, “ensure you have an adequate third party management process, and be ready to prove it at every internal or external audit”, he says.

However, the regulator is unlikely to impose a process that would cater to a large number of third parties, or go further than just making sure the organisation obtains the ISO or SOC 2 certificate from the contractor, Noel says. “This is why businesses should acknowledge the discrepancy and take the first step to implement a risk management program that exceeds these foundational compliance requirements.”

The Digital Operations Resilience Act (DORA), which came into force in the EU, directly addresses supply chain risks by imposing strict requirements on financial entities and their critical IT supply chain partners, says UBDS Digital’s Hannan-Jones. “DORA mandates that organisations implement comprehensive risk management frameworks for third-party relationships, including due diligence, contractual clauses ensuring data security, continuous monitoring, and the ability to terminate contracts if providers fail to meet resilience standards.  Regular testing, incident reporting and clear accountability for outsourced functions is also required.”

Governance Structures

With attackers able to access data via an API, the 700Credit breach has exposed the fact that in many cases, governance structures haven’t kept pace with the complexity of the ecosystem. Annual vendor questionnaires and legacy due-diligence processes simply don’t work when attackers can quietly pull millions of records through an API without being detected.

To prevent this type of breach from happening, governance must include continuous monitoring, supply-chain transparency, obligation mapping, and ISO-aligned governance such as ISO 27001 and ISO 27701.

But these are not just checkboxes. Businesses need to “move beyond static compliance” and “embrace continuous oversight”, says Razorblue’s Kitchen. That means “monitoring API traffic in real-time, not just during annual audits”.

At the same time, firms should demand transparency from their vendors, mapping obligations and understanding who else is in the chain, he advises.

Diane Downie, senior software architect at Black Duck, recommends that organisations take a zero-trust security posture, especially with access points to sensitive information. “Risk assessments of system architectures must consider mitigation against a compromised system, including those of their trusted partners.”

Financial organisations can no longer rely on trust-based vendor relationships or slow disclosure processes. They need to be fundamentally more transparent, taking a standards-driven approach to managing their data ecosystem.

The benefits of this approach are clear. The real cost of breaches goes far beyond regulatory penalties, creating substantial risk for operational paralysis and reputational damage, says Kitchen. “At a macro level, incidents like this can trigger sharp drops in share price, erode investor confidence, and create nervousness in the markets – especially for publicly traded firms in sensitive sectors like finance.”