Data is vital to any business operating in the FinTech sector. Financial institutions need efficient access to data in order to make faster, better informed decisions, however, effectively leveraging data is not always a straightforward undertaking. In our increasingly global world, data that will make a difference is often located across silos created by regulatory, organisational, or jurisdictional boundaries aimed at protecting the privacy and security of sensitive assets. Such barriers can be crippling obstacles to making true data-driven decisions, hampering financial organisations’ ability to overcome challenges such as fraud and money laundering. Given the critical importance of the data managed by the financial firms, it is understandable that they are subject to stringent data protection regulations, and that non-compliance can result in significant fines, legal consequences, and reputational damage.
The solution to these data usage challenges sits at the intersection of data and technology, specifically in a family of technologies that protect data while it’s being used or processed, enabling financial organisations to leverage customer intelligence and other sensitive data across jurisdictions or between siloes. Privacy Enhancing Technologies (PETs) continue to gain recognition for the category’s ability to harness the power of data while respecting regulatory and security boundaries. Thanks to efforts by groups including the UK Information Commissioner’s Office, Royal Society, The National Cyber Security Council, and the United Nations, leaders in financial services and beyond are recognising the power of this transformative family of technologies. UK Information Commissioner, John Edwards, highlighted the category’s value during the launch of the ICO PETs Guidance, “If your organisation shares large volumes of data, extraordinary category data, we recommend that over the next five years, you start considering using PETs. PETs enable safe data sharing and allow organisations to make the best use of the personal data they hold, driving innovation.”
Putting PETs to Work
In the financial services sector, PETs enable data to be leveraged in a secure, privacy-preserving, and efficient manner. These capabilities are critical to advancing intelligence-led decisions in a business-relevant timeframe. For example, PETs-powered solutions can allow banks to securely cross-match and search regulated data across silos while ensuring sensitive assets remain protected during processing. This enables financial entities to leverage a more comprehensive collection of datasets and sources to extract more complete customer profiles, drive prioritisation, improve enterprise data quality, reduce false positives, and advance the efficiency of financial crime investigations.
One of the central pillars of the PETs category is homomorphic encryption (HE). At its most basic form, HE secures Data in Use by allowing computations to occur in the encrypted domain. Using HE, banks and financial institutions can securely collaborate across boundaries without introducing new sensitive variables into the organisation’s data holdings. Analysts can encrypt their search within the bank’s trusted environment, then send the encrypted query to be processed over data in another jurisdiction. This could be another branch of the same bank whose data holdings the requesting party was otherwise unable to leverage due to data localization restrictions. By ensuring the sensitive or regulated content is never decrypted or exposed to outside parties, these PETs-powered capabilities deliver business-enabling value in a way that was not otherwise possible.
With PETs, data to be used without compromising regulatory or security boundaries or increasing organisational risk. By protecting data while it’s being processed, the technologies in the PETs family also allows financial firms to securely leverage external data sources such as commercial or public datasets in a decentralised manner without exposing their sensitive interests.
Value without Compromise
Data is undoubtedly a crucial asset and the need to leverage global data sources is becoming ubiquitous. However, for business leaders, the true importance of data is the value it can deliver. In regulated industries such as financial services, extracting that value cannot come at the cost of sacrificing privacy and security. This is the magic (and impact) of PETs: unlock data value while respecting regulatory and security boundaries. The need to securely and privately use data at scale will only increase over time; PETs will continue to solidify their place as transformational technologies of the digital era.
