A project to allow the sharing and analysing of transaction information between banks while protecting privacy of customers has had ‘good initial results’ after testing with synthetic data, a bank involved has said.
Dutch banks ABN Amro and Rabobank are collaborating with scientific research organisation TNO on the Multi-Party Computation Project for Anti Money Laundering (MCP4AML)
The project is aimed at allowing banks to access information that can help them determine which of their clients may be involved in high-risk transactions, without accessing individuals’ risk scores from banks and infringing customers’ privacy.
The personal data is encrypted, split up and fed into an algorithmic system.
In a blog post, ABN Amro said the system has now been tested with synthetic data – using fictional clients making payments between banks – and has had promising results.
ABN Amro said: “We don’t want to share these risk scores with other banks. But if one of our low-risk clients receives money from high-risk clients at other banks, we want to be able to monitor that client more closely.
“So how can you do that if you’re not allowed to see the risk scores used by other banks?
“The technology that we are testing in this collaborative project could hold the answer. By encrypting and splitting the data, we can ensure that nobody can find out the original risk score.
“Nevertheless, using an algorithm, this system can calculate which of our low-risk clients are involved in transactions with high-risk clients at other banks, and vice versa. This is important information that can help us deploy our analysts more effectively in future. That way, less time could be spent on clients that analysts check under the current system, and more could be spent on others.”
ABN Amro and Rabobank, along with ING, Triodos Bank and de Volksbank, have also set up the Transaction Monitoring Netherlands (TMNL) initiative which will aim towards collective monitoring of the banks’ combined 12 billion transactions a year.
The programme aims to make the sharing of data for transaction monitoring easier while protecting privacy. It is expected to start collectively monitoring commercial transactions later this year. Other banks will be able to join the programme at a later date.
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