Analytics company Palantir is poised to gain comprehensive access to the anti-money laundering data held by law firms when AML supervision passes to the Financial Conduct Authority, it has emerged.

The controversial US tech giant is hoping to land a permanent contract for crime detection with the City watchdog, financial services news site Compliance Corylated reported on Thursday.

Under a 12-week proof-of-concept agreement, Palantir has been given access to the FCA’s full dataset, including information on entity resolution between individuals and firms, identified networks of fraud and over 20,000 social media sources. If the deal is made permanent, the dataset’s scope will extend to all law firm AML data when the FCA assumes oversight of the legal sector from the SRA next year.

Steve Smart, FCA co-executive director of enforcement, told the Commons Treasury Committee this week that direct oversight of law firms would build on work already carried out by the National Crime Agency. ‘The thing that excites me about it is the opportunity to take the information that we see in the financial services sector, and put it with the information that we see in the legal and accountancy sectors, and use that information working with those sectors to find the bad actors,’ he said.

Nikhil Rathi, chief executive of the Financial Conduct Authority

Rathi: 'Use data intelligence more effectively'

Source: Parliamentlive.tv

Committee member and former City minister John Glen asked Smart how the FCA could ensure it will be accessible, responsive and proportionate in its supervision of an unfamiliar sector.

Smart assured MPs that the FCA will engage with professional services firms, including accountancy firms, on the practicalities of the enforcement switch.

Parliamentarians and others have voiced concerns about the extent of Palantir’s role in state institutions. The firm already has contracts to handle data for other UK government entities, including the National Health Service and the Metropolitan Police.

Rathi told the committee that he understands these concerns, but added: ‘I think this is a big strategic question around the deployment of big technology across the entire state of public function. But we also want to be the most effective enforcer against financial crime and money laundering, and that requires us to use data intelligence more effectively and adopt best-in-class [solutions].’

Palantir was co-founded by Peter Thiel, co-founder of PayPal and one of US president Donald Trumpʼs financial backers.