Of course, being a 3rd party service provider they will have to be very careful on how they handle this KYC documents.
Yeah they should be investing more in security, both in funds and data, but many of them don't do that; that is why there are so many events of data breaches and hacks were people lose their money.
I'm really very careful of providing my personal information because of such experience and for sure I'm not just the only one that might like a bad dream or nightmare in incident like that.
Everyone should be worried about kyc, because of how dangerous it is, but sadly only a few people are.