Financial institutions require your personal information for several critical reasons. Firstly, verifying your identity is essential to prevent fraud and ensure that the services are provided to the correct individual. Secondly, protecting your identity is crucial in safeguarding against identity theft and unauthorized access to your accounts. Lastly, understanding your financial situation allows institutions to offer tailored financial products and services that meet your needs, ensuring compliance with regulations and promoting responsible lending practices. Collectively, these measures help maintain the integrity of the financial system and protect consumers.