Fintech's future is private: how privacy-enhancing technologies are reshaping finance

That’s why privacy-first fintech is the new game-changer. It enables organizations to work together, analyze data, and detect fraud without ever revealing sensitive information.

Fintech, short for financial technology, refers to the use of technology to deliver financial services. This covers everything from mobile banking and online payments to investment tools and cryptocurrency platforms. 

The core goal of fintech aims to improve, automate, and streamline financial processes and products for consumers and businesses alike through digital innovation.

While the term "fintech" gained prominence in the 21st century, the concept of technology in finance isn't new. Early innovations like credit cards in the 1950s, ATMs, and electronic stock exchanges laid the groundwork. However, the advent of the internet and, later, smartphones, truly ignited the fintech revolution.

Initially focused on backend banking processes, fintech has expanded dramatically into consumer-facing products and services, driven by a desire for greater convenience, lower costs, and more personalized experiences.

Fintech's influence spans across almost every aspect of finance. Here are some of the most prominent areas:

• Digital banks and neobanks: Online-only banks that offer a full suite of services without physical branches, often with lower fees and better digital user experiences.

• Payment solutions: Mobile payment apps (e.g., PayPal, Venmo, Apple Pay), digital wallets, and peer-to-peer (P2P) lending platforms that facilitate fast and secure money transfers.

• Personal finance management (PFM): Apps and tools that help individuals budget, track spending, save, and manage their investments.

• Wealthtech: Automated investment platforms (robo-advisors), online brokerage services, and tools that democratize access to investment opportunities.

• Insurtech: Technology-driven innovations in the insurance sector, streamlining claims, policy management, and risk assessment through data analytics.

• Lending and credit tech: Platforms offering alternative lending options like P2P lending, microloans, and crowdfunding, often utilizing new credit scoring models.

• Regtech: Regulatory technology that helps financial institutions comply with regulations more efficiently and at a lower cost, including identity verification and compliance checks.

• Blockchain: Beyond digital currencies, this includes decentralized finance (DeFi) solutions, smart contracts, and new forms of digital assets.

Fintech has undoubtedly challenged traditional banking models, but it has also spurred significant innovation within the established financial sector, particularly in the fight against financial crime. Banks are increasingly adopting fintech solutions, collaborating with startups, and investing in their own digital transformation to enhance their fraud detection and Anti-Money Laundering (AML) capabilities. This dynamic interplay has led to:

Configurable setups that optimize your existing architecture

The most effective fintech platforms don’t replace what’s already working. Modular APIs and hybrid architectures allow you to deploy fraud and AML solutions that integrate with existing infrastructure, databases, and reporting tools. You can control exactly what data is shared, how insights are surfaced, and how alerts are routed, ensuring both agility and compliance.

Enhanced efficiency in fraud and AML operations

Automation and digitalization of processes, powered by fintech, significantly reduce the manual effort involved in monitoring transactions and identifying suspicious activities. This leads to faster detection of fraudulent schemes and more efficient processing of AML alerts, ultimately reducing operational costs and improving the overall effectiveness of financial crime prevention.

Improved customer experience through smarter security

While security is paramount, it shouldn't come at the expense of customer convenience. Fintech innovations allow for more seamless and less intrusive security measures. For instance, advanced analytics can differentiate legitimate transactions from suspicious ones with greater accuracy, minimizing false positives that might inconvenience customers with unnecessary holds or verification requests. This leads to a smoother, more secure customer journey.

Increased reach for financial crime intelligence

Fintech can help bridge gaps in financial inclusion, and in doing so, it also expands the data landscape for fraud and AML. By bringing more individuals and businesses into the formal financial system, fintech provides a broader dataset for analysis, enabling financial institutions to better understand and identify illicit financial flows across a wider spectrum of transactions.

New capabilities and revenue streams for prevention

Through innovative products and services, and strategic partnerships, fintech enables banks to develop more sophisticated fraud detection and AML tools. This includes leveraging machine learning for predictive analytics, utilizing blockchain for enhanced transaction transparency, and employing Multi-Party Computation for secure, collaborative intelligence sharing across institutions. These advanced capabilities not only improve risk management but can also open up new avenues for offering specialized financial crime consulting or intelligence services.

Imagine a world where banks can collaborate on a global scale to identify complex financial crime networks without ever revealing individual customer data. Or where financial institutions can offer hyper-personalized products based on aggregated insights without accessing personal transaction details. 

This is the promise of privacy-enhancing technologies (PETs), transforming how financial services operate and build trust.

The discussion around fraud and its detection in finance has gained significant importance, especially in recent years, as those committing fraud have become increasingly sophisticated. Fraudsters are well-versed in their methods, constantly innovating and finding new ways to bypass security measures. Each time one loophole is closed, they find another, making it challenging to catch them, particularly given the current regulatory landscape.

• Regulations: Privacy laws are primarily designed to protect customers, with a significant focus on safeguarding client identities. However, these regulations pose significant challenges for banks in detecting financial fraud, particularly in the context of Anti-Money Laundering (AML) efforts.

• Siloed information: In some countries, laws hinder companies from collaborating by sharing  customer information across banks.

• Limited visibility: This creates a highly siloed environment where individual banks, and even national authorities struggle to connect the dots and map the complex, multi-bank networks that fraudsters exploit to obscure their activities.

Difficulty in pattern recognition: A single entity alone faces significant challenges in identifying the systems, patterns, and digital fingerprints left by these sophisticated criminals.

Confidential Computing offers a powerful solution to persistent AML and fraud challenges by tackling a critical vulnerability: data in use.

• Protects vulnerable "data in use": Traditional encryption leaves data exposed during processing, which is when fraud and AML detection occur.

• Creates secure processing environments: Confidential Computing builds secure enclaves – hardware-protected areas where data stays encrypted even during computation, allowing sensitive operations within a protected bubble.

• Enables secure cloud for AML/fraud: Financial institutions can use cloud resources for critical fraud and AML tasks without exposing raw data to the cloud provider or unauthorized personnel; data stays encrypted throughout.

• Pivotal for compliance and trust: This capability is key for compliance-ready digital finance solutions, ensuring data integrity and confidentiality during computation. It builds trust for advanced, collaborative AML and fraud prevention, letting banks confidently process vast data without compromising privacy or increasing risk.

The importance of privacy-enhancing technologies (PETs) in finance is a rapidly growing topic of discussion at leading industry events worldwide. From major global fintech summits to specialized conferences like Nordic Fintech Week, the conversation is shifting towards how to implement these crucial technologies effectively.

We at Partisia are actively participating in it. Events such as Nordic Fintech Week bring together thought leaders and innovators to explore the practical applications of PETs in shaping a more secure and trustworthy financial future.

At Partisia, we believe secure fintech is about protection AND unlocking the full value of data while respecting the privacy it demands. Our platform combines Multi-Party Computation (MPC) and blockchain technology to give financial institutions the power to collaborate across borders and systems without ever exposing sensitive information.

We have a unique approach to privacy-enhancing technologies where we help banks, regulators, and fintechs work together securely on critical use cases like fraud detection, AML compliance, and data-driven innovation, all while staying aligned with the world’s toughest data protection laws.

With Partisia, financial institutions can:

• Detect financial fraud and money laundering in real time by analyzing shared data securely across a collaborative network

• Break down data silos without compromising competitive or customer information

• Improve risk models and credit scoring using aggregated insights from multiple institutions without revealing raw data

• Automate regulatory reporting and auditing with cryptographically verifiable data

• Create a fraud detection map where high-risk behavior is flagged early, across institutions, before fraudsters can act

Central to all of this is our MPC-based infrastructure, which enables each participant to keep their data encrypted while still computing it together. No one ever sees the underlying data, yet the network can still act on the insight. It’s security without tradeoffs, and compliance without compromise.

Fraud evolves faster than regulation, and that’s why we’re providing the cryptographic backbone for a more secure, resilient, and intelligent financial ecosystem.

If you're ready to move from fragmented tracking systems to secure, collaborative traceability, the journey starts with a conversation. 

Whether you're in automotive, pharmaceuticals, food, or fashion, our platform is designed to integrate seamlessly with your existing systems. You don’t have to rip and replace what’s already working. Instead, you extend your capabilities with verifiable traceability, cross-border compliance, and secure data collaboration from day one.

Book a demo to see how your organization can turn raw supply chain data into trusted digital assets without exposing sensitive IP or operational details.

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