FeatureSpace have secured UK and US funding to beat financial crime in expected recession.
Cambridge, UK-based fraud prevention company, Featurespace, have received UK and US funding with $107.9m USD raised cumulatively. They’ll use the funding to build an AI system that detects financial crime for banks and PSPs.
Financial crime increased both during and after a recession, as was found by the Association of Certified Fraud Examiners post the 2007-2009 recession. Since then, finance has been digitalised with businesses and consumers largely handling their finances online. While this increases accessibility and reach, it also increased vulnerability, especially during times of uncertainty and market vulnerability. Since, 2019 there has been a 52.2% increase in the rate of suspected digital fraud globally.1 Trade body UK Finance predicts an ‘epidemic of fraud’ happening, due to increases in authorised push payment (APP) fraud, which totalled £580m lost in 2021, representing a 40% year on year increase in this type of crime
On receiving the privacy enhancing technologies (PETs) Challenge Prize funding, an Innovate UK initiative, Featurespace will develop privacy-preserving solutions that allow AI models to be trained on sensitive private data – important for revealing criminal activity – without organisations having to reveal, share, or combine their raw data. They’re reducing financial crime whilst protecting data privacy.
Dr David Sutton, Featurespace’s Director of Innovation, commented: “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.”
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.