Effective collaboration requires a common vision. We inspire each other with news and developments in financial privacy technology, and with the challenges in the fight against financial crime. But we do not just talk, we also develop. Since 2017, ABN AMRO, Rabobank and TNO have been working on use cases, from ideas to pilots. The Alliance of Privacy Preserving Detection of Financial Crime exists since 2021, consisting of De Volksbank, Transaction Monitoring the Netherlands (TMNL), Centrum Wiskunde & Informatica (CWI) Cryptography Group, ABN AMRO, Rabobank, and the Netherlands Organization for applied scientic research (TNO). The project is supported by advisory board consisting of KBC, Nordea, NTU and Société Générale.
Financial Privacy Technology is all about applied research on collaborative detecting financial crime with the use of Privacy Enhancing Technologies (PETs). The work can be seen as a strong implementation of the Privacy by Design principle. Specifically, we research Multi-Party Computation, Zero-Knowledge Proofs and synthetic data generation for application in Know Your Customer, Anti-Money Laundering and fraud detection. Successful Proof-of-Concepts are developed and pilot technology demonstrators are evaluated to show improved detection rates.
Financial crime as international challenge
Financial analysts and investigators need better collaboration, leveraging technological innovation and advanced data analytics as criminals increase the number of attempts and sophistication in concealing their crimes. Money laundering is a huge problem. Global estimates are close to 3 % of world GDP. Moreover, the sector is confronted with an unsustainable rise in the ‘cost of compliance’. National initiatives require international coordination as money laundering does not stop at the border.
Privacy Enhancing Technologies
Privacy Enhancing Technologies (PETs) such as Multi-Party Computation prove that technology can be used as a means of protecting individuals against misuse or abuse of their personal data. It is a strong form of Privacy by Design. The concept of PETs refers to a collection of technical measures that protect privacy and data confidentiality by eliminating or reducing personal data or by preventing unnecessary or undesired processing of personal data. If you want to learn more, please also see the FAQ.
Key characteristics of our R&D collaboration
- Increased set of algorithms and proof-of-concepts for KYC, AML, fraud detection or other forms of DFC.
- Pilots with collaborative data analysis of technology with increased true-hit ratios.
- Technology readiness level (TRL) 3 to 6 and we are actively engaging with potential market players to adopt (future) demand and operationalization.
Share the insight, not the data
Banks mostly use proprietary data from their own organization to detect financial crime, resulting in low detection rates and high false positives. This needs to be turned around.
Combining data from multiple banks improves the intelligence position of each bank. Typically, access to data is limited. And those who have been granted access know the risks and challenges of sending around confidential or private information. Banks need to detect more suspicious behavior and increase detection rates. Augmenting alerts and suspicious activity reports (SARs) by including information from other banks will decrease false positive rates. The Alliance of Privacy Preserving Detection of Financial Crime develops solutions that allow banks to share their insights – but not the actual data. By doing so, detecting suspicious money flows contributes to a more effective fight against financial crime.
If you are interested in our work on financial privacy technology, we would like to hear from you.
The research activities that led to this result were funded by ABN AMRO, CWI, Rabobank, TMNL, De Volksbank and PPS-surcharge for Research and Innovation of the Dutch Ministry of Economic Affairs and Climate Policy, and TNO's Appl.AI programme.