Data is one of our main weapons in the fight against financial crime and the COVID-19 pandemic has shown that this holds true for other worldwide challenges as well. Just as governments, financial institutions, data scientists, and tech companies have been fighting financial crime over the last two decades, the world is now feverishly building frameworks to jointly analyze data to contain the spread of COVID-19 and devise cures. It has become clear that only this type of concerted collaboration will help end the pandemic as soon as possible.
In the meantime, COVID-19 – much like natural disasters and security crises in the past – is posing new challenges to financial crime and compliance teams. The Financial Action Task Force (FATF) warned in a recent report that the crisis raises financial crime risks including the “misuse of online financial services and virtual assets to move and conceal illicit funds”, and recommends reinforcing cooperation across borders to mitigate such risks during the current crisis.
For some time, financial regulators and experts have been pointing to the need for financial institutions to share information to combat global criminal networks more successfully. Two months ago, at the SIFMA 20th Anti-Money Laundering (AML) and Financial Crimes Conference, FinCEN Deputy Director Jamal El-Hindi, told attendees: “We are hopeful that at a time when we are all recognizing the importance of appropriate information sharing, your businesses will work toward the sharing of more information with one another […], to root out illicit activity.”
Considering the current crisis, such data collaboration across organizational and national borders has become more important than ever. So what is holding back financial institutions from leveraging collective intelligence to up their fight against fraudsters, money launderers and other assorted financial criminals? In too many cases, it is a raft of data protection and privacy regulations that makes it impossible for banks to share data across teams, institutions and jurisdictions.
Duality is all about enabling privacy-preserving data collaboration, reconciling the need for cross-organizational information sharing with adherence to privacy regulations. In early March, as the Coronavirus storm gathered, we launched Duality Query for privacy-enhanced financial crime detection. Our groundbreaking solution enables financial institutions and law enforcement to generate joint insights by securely querying one another’s data – for example, by asking questions about suspicious accounts and transactions. The encrypted querying process provides answers in seconds, helping institutions to effectively weed out false positives and expose financial crime, without compromising on regulatory compliance nor the privacy of subjects under investigation.
Steven Wilson, CEO of the Cyber Defense Alliance, a consortium of British banks and law enforcement that successfully piloted Query, recently stated: “Our cooperation with Duality was extremely promising. This technology has the potential to address many of the challenges that exist when analyzing the huge sensitive data sets involved in the investigation of complex global cyber and financial crime cases, whilst still complying with data privacy regulations.”
While isolation and social distancing are the edicts of the hour at the physical level, sharing and collaboration are imperative at the digital level. And with Privacy-Enhanced Technologies, we can do this in a confidential, compliant way.