US and UK collaborate to drive innovation in technologies used to combat money laundering

Federated learning technology could be a “building block to protect the U.S. financial system from illicit finance,” said Himamauli Das, acting director of the U.S. Treasury Department’s Financial Crimes Enforcement Network.


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The US and UK governments are teaming up to encourage the development of new machine learning technologies that could be used to fight money laundering.

The White House and the UK government said on Monday they were collaborating on a “prize challenge” program designed to spur innovation in ways to train software to fight financial crime. Awards programs provide financial rewards to members of the public who offer solutions to a problem posed by a government agency.

Both countries require financial institutions to detect and report suspicious transactions by their customers. These rules have created troves of data so vast that government investigators and individual financial institutions have difficulty analyzing them.

Although governments have encouraged financial institutions to create information-sharing partnerships to improve their reporting activity and make data more meaningful, data privacy rules create challenges for doing so.

The US and UK have said they want to improve technology that will allow machine learning models to be trained on data from multiple sources without that data leaving a safe environment, a method known as federated learning.

Federated learning technology, if improved, could enable greater sharing of financial information, triggering the creation of more robust software to combat money laundering and other crimes.

The new technology could be a “building block to protect the US financial system from illicit finance,” said Himamauli Das, acting director of the US Treasury Department’s Financial Crimes Enforcement Network.

The United States and the United Kingdom said the prize competition program should be open to participants this summer, with winners to be announced in 2023. They did not provide details on how the program works or the price.

FinCEN and the UK’s Financial Conduct Authority and its Information Commissioner’s Office will make themselves available to innovators under the scheme.

Write to Richard Vanderford at [email protected]

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