This report explores an emerging set of technologies known as "privacy enhancing techniques" (PETs), and their ability to unlock new value in the financial services industry by facilitating new forms of data-sharing. Sharing data would allow institutions to - for example - better detect fraud, offer customers more personalized advice, and proactively identify the buildup of systemic risks. However, these benefits historically have been in conflict with institutions obligation to keep their customers' data private and their own information confidential.
However, PETs have the potential to alter these dynamics, allowing institutions, customers, and regulators to enable the analysis and the sharing of insights without requiring the sharing of the underlying data itself. Specifically, this report explores five specific PETs:
- Differential privacy: where noise is added to an analytical system so that it is impossible to reverse-engineer the individual inputs
- Federated analysis: where parties share the insights from their analysis without sharing the data itself
- Homomorphic encryption: where data is encrypted before it is shared, such that it can still be analysed but not decoded into the original information
- Zero-knowledge proofs: where users can prove their knowledge of value without revealing the value itself
- Secure multiparty computation: where data analysis is spread across multiple parties such that no individual party can see the complete set of inputs
The report outlines how each technique works at a high level (with a non-technical audience in mind), and illustrates how PETs might be used in the financial services industry though several hypothetical use cases.
Ultimately, the white paper makes the case that PETs can fundamentally change the nature of data sharing in financial services, creating new value for customers and addressing institutions' most pressing problems in a way that is acceptable to customers, regulators, and society at large.
This white paper is the shorter of two papers (with the other scheduled to be published in October 2019) produced in 2019 by the World Economic Forum's "Future of Financial Services" team. It includes 250+ contributions from subject matter experts over 10+ months of research and several global workshops. This white paper was created in collaboration with Deloitte.