The UK and US governments will develop prize challenges focused on advancing the maturity of privacy-enhancing tech to combat financial crimes.

United Nations data estimates that up to $2 trillion of cross-border money laundering takes place each year, financing organised crime and undermining economic prosperity.

PETs could play a transformative role in addressing financial crime, which is among one of the most problematic global challenges to deals with.

Greater information sharing and collaborative analytics among financial organisations could transform the detection of this activity.

However, data collected by the Royal United Services Institute (RUSI) found that this is hindered by the legal, technical, and ethical challenges involved in jointly analysing sensitive information.

Through the US and UK prize challenges, innovators will develop state-of-the-art privacy-preserving federated learning solutions that help to tackle the barriers to the wider use of these technologies.

Julia Lopez, the Minister for Media, Data and Digital Infrastructure at the Department for Digital, Culture, Media and Sport (DCMS), has outlined how PETs can be harnessed to tackle global challenges.

She outlined how privacy-enhancing tech could help to combat global issues, such as the negative impact of Covid-19 and human trafficking by enabling insights to be derived from sensitive data, while protecting individuals’ privacy and proprietary information.

PETs include maturing technologies, such as federated learning, which allows machine learning models to be trained on high quality datasets, without the data leaving safe environments.

Such technologies have the potential to help facilitate privacy-preserving financial information sharing and collaborative analytics; allowing suspicious types of behaviour to be identified without compromising the privacy of individuals or requiring the transfer of data between institutions or across borders.

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Research by the Financial Action Task Force (FATF) has found that uncertainty about the regulatory implications of using privacy-enhancing tech is a significant barrier to adoption.

As part of the PETs prize challenges, innovators will be able to engage with regulators, including the UK’s Financial Conduct Authority (FCA) and Information Commissioner’s Office (ICO), and the US’ Financial Crimes Enforcement Network (FinCEN).

Since December 2021, the UK’s Centre for Data Ethics and Innovation (CDEI) and Innovate UK have been working with the White House’s Office of Science and Technology Policy (OSTP), the US National Institute of Standards and Technology (NIST), and the US National Science Foundation (NSF) to take the prize challenges forward.

Dr. Alondra Nelson, Director of the White House Office of Science and Technology Policy, said: “Data can be marshalled to make life easier and more just. But too often, powerful data tools are instead used to deepen inequality and threaten our most basic freedoms.

“The PETs prize challenges seek to close that gap and demonstrate how these tools can be used responsibly to achieve their potential across many areas – from improving access to healthcare and addressing the climate crisis to advancing financial security and ending human trafficking.

“This important initiative is an expression of our shared vision: a world where our technologies reflect our values and innovation opens the door to solutions that make us more secure.”

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