Prize challenges aim to generate technology innovation to help tackle the global challenge of financial crime

Innovators will be able to draw on expert advice from U.S. and U.K. regulators

The United Nations estimates that up to $2 trillion of cross-border money laundering takes place each year, financing organized crime and undermining economic prosperity. Greater information sharing and collaborative analytics among financial organizations could transform the detection of this activity, but research by the Royal United Services Institute shows it is hindered by the legal, technical and ethical challenges involved in jointly analyzing sensitive information.

Privacy-enhancing technologies (PETs) could play a transformative role in addressing these financial crimes.

Today, the U.S. and U.K. governments are developing prize challenges focused on advancing the maturity of PETs.

Speaking at the Global Leaders Innovation Summit during London Tech Week in the U.K., Julia Lopez, the Minister for Media, Data and Digital Infrastructure at the Department for Digital, Culture, Media and Sport, outlined how PETs can be harnessed to tackle global challenges – from the COVID-19 pandemic to 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 collaboratively among organizations, without the data leaving safe environments. Such technologies have the potential to help facilitate privacy-preserving financial information sharing and analytics; allowing suspicious types of behavior to be identified without compromising the privacy of individuals, or requiring the transfer of data between institutions or across borders. Through the U.S. and U.K. 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. Research by the Financial Action Task Force has found that uncertainty about the regulatory implications of using these technologies is a significant barrier to adoption. As part of the prize challenges, innovators will be able to engage with regulators, including the U.K.’s Financial Conduct Authority and Information Commissioner’s Office, and the U.S. Financial Crimes Enforcement Network (FinCEN).

The U.S.-U.K. collaboration on the PETs prize challenges was first announced at the Summit for Democracy in December 2021. Since then, the White House Office of Science and Technology Policy, the U.S. National Institute of Standards and Technology, and the U.S. National Science Foundation have been working with the U.K.’s Center for Data Ethics and Innovation and Innovate U.K. to take the prize challenges forward.

The challenges will open to innovators on both sides of the Atlantic this summer. Challenge solutions will be showcased in the second Summit for Democracy, to be convened by President Joe Biden, in early 2023.

Dr. Alondra Nelson, head 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.”

Julia Lopez, Minister for Media, Data and Digital Infrastructure at the Department for Digital, Culture, Media and Sport, said: “I’m delighted that the U.K. and U.S. are working with regulators on both sides of the Atlantic to help realize the potential of novel privacy-enhancing technologies (PETs) to tackle financial crime. The U.K.’s National Data Strategy outlines the promise of PETs in enabling trustworthy data access. PETs have the potential to facilitate new forms of data collaboration to tackle the harms of money laundering, while protecting citizens’ privacy.”

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