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Enhancing data privacy in financial services : The role of zero-knowledge proofs and federated AI
Journal of AI, Robotics & Workplace Automation,
2
(4),
327-331
(2023)
Abstract
This paper analyses the challenges of balancing anonymity, utility and security in financial services. It argues that the traditional approach of using clearinghouses to enhance utility has come at the expense of anonymity. However, the advent of privacy-enhancing technologies like zero-knowledge proofs and federated AI has begun to minimise these trade-offs. The paper provides a case study of Merit Protocol, a company that is using these technologies to address the problem of predatory payday loans. Merit Protocol’s platform allows employers to pre-underwrite loans for their employees without sharing sensitive data. This approach empowers employers to support their employees’ financial needs while maintaining privacy and reducing dependency on traditional credit agencies. The paper concludes by discussing the challenges that the financial services industry must address in order to fully realise the potential of privacy-enhancing technologies. These challenges include navigating legacy compliance frameworks and improving the ease of use of these technologies. Readers can expect to gain a deeper understanding of the challenges of balancing anonymity, utility and security in financial services. They will also learn about the potential of privacy-enhancing technologies to address these challenges.
Keywords: data privacy; ZK proof; financial services; data security; federated AI; AI; federated learning
The full article is available to subscribers to the journal.
Author's Biography
Alex Lyashok , a tech entrepreneur, currently serves as the CEO and founder of Merit Protocol, an AI software company, while also acting as an adviser and operating partner to private equity and venture capital firms. Before founding Merit, he held the position of CEO at WorkFusion, a B2B AI SaaS company that assisted major banks in addressing AML/KYC issues. Preceding his tenure at WorkFusion, Alex led global operations at NYSE:EPAM for six years, contributing to the company’s growth as both CTO and CMO during its initial public offering. Originally from Ukraine, Alex holds an MS in computer science and an MBA from New York University’s Stern School of Business.
Prashant Sarode is co-founder and Managing Partner at TheoremLabs.io, a hybrid of digital products advisory consulting and art-of-possible labs focused on building FinTech products that exploit advances in AI and mature Web 3 technologies. Prashant’s prior experience includes CTO at Wealth Fintech and 20+ year in financial services. He has also held leadership positions in product engineering and architecture. He has a track record in turn-key modernisation and reimagination of business products and operation models using mature capabilities cloud, automation and AI-ML. He is the inventor of a patent for mass-production of SaaS-hosted white label bot systems. A published author, adjunct faculty and speaker, Prashant is currently on the editorial board of the Journal of AI, Robotics and Workplace Automation.
