Palantir, the US artificial intelligence company co-founded by billionaire Peter Thiel, has been awarded a contract to analyse sensitive data held by the Financial Conduct Authority (FCA) in a move that has raised fresh privacy concerns. The three-month trial, worth more than £30,000 per week, will see Palantir apply its Foundry AI system to the watchdog's vast 'data lake' to help tackle financial crime, including fraud, money laundering and insider trading.
The deal marks the latest expansion of Palantir's reach into the British state, with the company already holding over £500 million in UK public contracts, including with the NHS, military and police. Campaign groups have long criticised Palantir's work with the Israeli military and US immigration enforcement, and leftwing MPs last month described the firm as 'highly questionable' and 'ghastly'. The FCA contract has prompted warnings of 'very significant privacy concerns' from inside the regulator.
The data Palantir will access includes case intelligence files, information on problem firms, reports of fraud from lenders, and consumer complaints to the financial ombudsman, as well as recordings of phone calls, emails and social media posts. One FCA source expressed concern that once Palantir understands how the watchdog detects money-laundering threats, there is no guarantee the company will not share that information.
The FCA has stressed that Palantir will act only as a 'data processor' and cannot control the data, with encryption keys for the most sensitive files remaining exclusively with the regulator. Data will be hosted and stored solely in the UK, and Palantir must destroy it after the contract ends. The FCA considered using dummy data but decided real data was necessary for a meaningful test.
Professor Michael Levi of Cardiff University, an expert in money laundering, acknowledged the potential value of AI in tackling financial crime but questioned the protocols for onward use of information learned by Palantir. The FCA said any intellectual property derived from the data trawling would be retained by the regulator.
