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(Sharecast News) - The Financial Conduct Authority has awarded a key contract to US artificial intelligence specialist Palantir Technologies, it emerged on Monday.
First reported by The Guardian, the FCA confirmed it had hired Palantir on a trial basis. Under the terms of the contract, it is understood Palantir will investigate the watchdog's internal intelligence data in an effort to better tackle financial crime, including fraud, money laundering and insider trading. Financial crimes are typically hard to spot and even harder to successfully prosecute.
The contract's focus will be on how the watchdog can better draw together the various strands of information it holds. It is for an initial period of three months, although The Guardian said it could potentially lead to the full procurement of an AI system.
Palantir, a specialist in analysing big data, already has multiple deals with various UK institutions, including the NHS, military and police. Some critics argue it has been given too much access to often highly-sensitive information across the British state. The Miami-based company has also been criticised for working with certain clients, such as US Immigration and Customs Enforcement. Palantir was founded in 2003 by the billionaire Peter Thiel, formerly of PayPal.
However, the FCA told The Guardian that Palantir would be a data processor rather than data controller, meaning it could only act on instructions from the regulator.
It is also understood that the FCA will retain exclusive control over the encryption keys for the most sensitive files, with data hosted and stored entirely in the UK. Palantir will also have to destroy data once the contract is completed.
An FCA spokesperson said: "Effective use of technology is vital in the fight against crime and helps us identify risks to the consumers we serve and markets we oversee. We ran a competitive procurement process and have strict controls in place to ensure data is protected."
As at 1500 GMT, Nasdaq-listed Palantir was trading up 5% in a volatile day for global stocks.
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