Machine learning experts have a technology edge due to unique fraud and risk industry experience
Cambridge, UK – 22 November 2022 Featurespace, the world leader in machine learning fraud and financial crime prevention technology, has secured funding from UK and US governments to build a new type of artificial intelligence (AI) system to help banks and payments service providers (PSPs) detect financial crime – whilst protecting data privacy.
The privacy enhancing technologies (PETs) Challenge Prize funding enables Featurespace to develop privacy-preserving solutions that allow AI models to be trained on sensitive private data – important for revealing criminal activity – without organisations having to reveal, share, or combine their raw data. The company will apply cutting-edge federated deep learning incorporating privacy enhancing techniques such as k-anonymity and local differential privacy to tackle financial crime.
The need for such an innovative tech solution is timely, as financial crime that impacts businesses, society and consumers is likely to rise due to the expected global recession and the cost of living crisis in 2023. Trade body UK Finance predicts an ‘epidemic of fraud’ happening, due to increases in authorised push payment (APP) fraud, which totalled £580m lost in 2021, representing a 40% year on year increase in this type of crime. Additionally, the United Nations estimates that money laundering costs up to US$2 trillion each year, undermining economic prosperity and financing organised crime.
Dr David Sutton, Featurespace’s Director of Innovation, commented: “UK and US governments want banks to work together to stop fraud and money laundering. This type of privacy-preserving collaborative AI is a hard problem that no-one has yet solved. We are confident we can meet this challenge. We’re the only company in this project that has deployed innovative tech to fight worldwide financial crime – and we have the banking customers to prove it.”
Featurespace’s solution is intended to help PSPs and banks tackle financial crimes including cross-border money laundering, application fraud and APP fraud.
Launched in July 2022, by Innovate UK – the UK’s innovation agency – and National Science Foundation in the US, the scheme has awarded prize challenges to unleash the potential of PETs to combat global societal challenges. The first track – aimed at transforming financial crime prevention – will spur technological innovation to tackle the challenge of international money laundering.
This PETs project – which is backed by the international payments organisation SWIFT – can be harnessed to facilitate privacy-preserving financial information sharing and collaborative analytics, allowing anomalous payments to be identified without compromising the privacy of individuals.
Summing up the aims of the project, Dr David Sutton added: “A successful outcome of this project is to make money laundering across borders and between banks much more difficult. If you make it harder to launder money, you make criminal activities less profitable. This will benefit businesses, society and consumers.”
Featurespace now has until 24 January to build its AI prototype. If successful, the company’s solution will be showcased at the second Summit for Democracy in the US, which President Biden plans to convene in the first half of 2023.
Media contact
Will Anderson
Chief Communications and Marketing Officer
Featurespace
M: +447834502594
About Featurespace
Featurespace is the world leader in enterprise grade technology that prevents fraud and financial crime. With a mission to make the world a safer place to transact, Featurespace helps banks and financial institutions protect customers, and reduce risk and business operating costs by providing industry-leading machine learning, financial crime prevention solutions. Featurespace invented Adaptive Behavioral Analytics and Automated Deep Behavioral Networks and is the first to profile both genuine and fraudulent behavior to identify and block criminal activity in real time. Both are patent pending technologies that are central to Featurespace’s award winning ARIC™ Risk Hub. Over 70 direct customers and 200,000 institutions have put their trust in Featurespace’s technology including HSBC, NatWest, TSYS, Worldpay, Marqeta, Contis, Danske Bank, Akbank, Edenred and Permanent TSB. Founded in 2008, and headquartered in Cambridge, UK Featurespace has a team of over 400, operating globally from seven locations. www.featurespace.com
About Innovate UK
Innovate UK is part of UK Research and Innovation, a non-departmental public body funded by a grant-in-aid from the UK government. We drive productivity and economic growth by supporting businesses to develop and realise the potential of new ideas, including those from the UK’s world-class research base. www.ukri.org
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