Financial crime prevention company Featurespaces has received funding from UK and US governments to build a new artificial intelligence (AI) system designed to help banks detect fraud.
The anti-fraud firm is now able to develop privacy-preserving solutions that allow AI models to be trained on sensitive private data, which Featurespaces ensures the protection of.
This technology reveals when criminal activity is taking place without the need for organisations to reveal, share, or combine their data. Featurespaces ensures that their federated deep learning, as well as its “privacy-enhancing” techniques will enable firms to tackle financial crime more effectively.
Dr David Sutton, Director of Innovation at Featurespaces, said: “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.”
The financial crime prevention firm states that the need for AI innovation within fraud is timely, as it reveals the need for companies to boost their anti-fraud systems comes at a time when global recession and the cost-of-living crisis is on the rise, posing more threats from financial criminals.
UK Finance indicates that an “epidemic of fraud” is impending due to the global economic pressures, as authorised push payment (APP) fraud has increased totalling to £580m lost in 2021, a 40% rise year-on-year.
Featurespaces is looking to alleviate these rises in fraud cases, and has until 24 January to build its AI prototype to put into use over the next year. If successful, the company’s solution will be showcased at the US Summit for Democracy.
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.
Summing up the aims of the project, 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.”