Palantir extends reach into British state as it gets access to sensitive FCA data | Palantir
Palantir will be given access to highly sensitive UK financial regulatory data in a deal that has sparked fresh concerns about the US AI company’s deepening access to the British state, the Guardian has revealed.
The Financial Conduct Authority (FCA) awarded Palantir a contract to investigate the watchdog’s internal intelligence data to help combat financial crime, which includes investigating fraud, money laundering and insider trading.
The Miami-based company, co-founded by billionaire Donald Trump donor Peter Thiel, has been appointed for a three-month trial, paying more than £30,000 a week, to analyze the FCA’s vast “data lake”; this could lead to an outright purchase of an AI system.
The deal is part of the FCA’s effort to use digital intelligence to better focus resources on breaking the rules among the 42,000 financial services firms it regulates, from big banks to crypto exchanges.
The convention had only one other unnamed opponent. Palantir currently has more than £500 million of public contracts in the UK, including the NHS, army and police.
The agreement sparked warnings about “very significant privacy concerns.” Palantir is expected to apply its AI system, known as Foundry, to large amounts of information held by the watchdog, including case intelligence files marked as highly sensitive; information about so-called problematic companies; reports of proven and suspected fraud from lenders; and public data, including consumer complaints to the financial ombudsman.
The Guardian understands the data includes troll recordings of phone calls, emails and social media posts. The FCA is one of several organizations in the UK that aim to stop financial crime that drives harm, such as drug dealing and people smuggling.
The deal raised concerns within FCA. “Once Palantir understands how we detect money laundering threats, how do we know those threats are ethically credible enough not to share that information?” one of the sources said.
Palantir’s technology is used by the Israeli military and in the US president’s crackdown on ICE immigration, leading left-wing MPs in the House of Commons last month to describe it as a “highly dubious” and “terrible” company. In 2023 it signed a £330 million deal with the NHS, sparking resistance from doctors, and in December 2025 it signed a £240 million contract with the Ministry of Defense; This led MPs to highlight “reports of serious allegations of complicity in human rights violations and the undermining of democratic processes against Palantir”.
Palantir has previously defended its work, saying it led to the planning of nearly 99,000 extra operations on the NHS, helped UK police tackle domestic violence and took a “rigorous approach to respecting human rights”.
Prof Michael Levi, an internationally renowned expert on money laundering at Cardiff University, said data held by financial regulators was “seriously underexploited”, making AI a potentially valuable technology in the fight against financial crime. But he said it was “a question about whether Palantir owners will tip their friends on methodologies.”
“What are the agreed protocols between FCA and Palantir for the forward use of what they have learned in this process?” he said.
The FCA said the terms of the contract meant Palantir would be a “data processor” and not a “data controller”; This means it can only act on instructions from the regulator; The regulator said it would retain exclusive control over encryption keys for the most sensitive files and that the data would only be hosted and stored in the UK. Palantir will have to destroy the data upon completion of the contract and any intellectual property obtained from data trawling must be retained by the FCA.
The FCA considered using dummy data or mixing company and person names, but decided that using real data was the only worthwhile test, although guidelines encourage the use of synthetic data in pilots.
“When the FCA conducts an enforcement investigation, it has the power to force firms to hand over large amounts of data,” said Christopher Houssemayne du Boulay, a partner and solicitor at the law firm Hickman & Rose, who specializes in defending serious and complex financial crime cases. “We could be talking about hundreds of full email accounts and full financial records. Many innocent people will be caught up in this and the data could include bank account details, email addresses, phone numbers and other personal information.”
“If you take that data and use it to train an AI system, there are very serious privacy concerns. There should be serious privacy requirements for what Palantir does with the data.”
The FCA said Palantir could not copy data to train its products. Palantir has referred a request for comment to the FCA.
A spokesperson for the FCA said: “The effective use of technology is vital in tackling financial crime and helps us identify risks to the consumers we serve and the markets we oversee. We have run a competitive procurement process and implemented stringent controls to ensure data is protected.”
