Hetzner (outsourcing to Idenfy) dared to demand this of me, three years ago. I'm still mad about it.
> "When that data eventually leaks,"
Indeed, my understanding is these sensitive biometrics are generically (i) uploaded in full to a remote server, where they're (ii) retained for a nontrivial amount of time, because they need to be (iii) manually QA'd by humans. It's nothing like an iPhone's local-only biometrics enclave. My understanding's based on the specific case of Idenfy, and an ex-Idenfy HN'er explaining its workflow[0].