Cross-party MPs are demanding the government intervene to stop a new contract granting the US data analytics firm Palantir access to the UK financial regulator’s most sensitive intelligence, citing grave concerns over national security, data privacy, and the company’s political affiliations.
The Financial Conduct Authority has hired Palantir on a 12-week trial, paying over £30,000 per week, to use its artificial intelligence platform, Foundry, to analyse a vast internal “data lake”. The repository contains two years’ worth of intelligence, including case files, consumer complaints, and reports of suspected wrongdoing, aimed at helping the FCA tackle fraud, money laundering and insider trading.
Political alarm and calls for a block
The revelation has triggered immediate political backlash. The Liberal Democrats have called for a government investigation, with the party’s Treasury spokesperson Daisy Cooper stating the award of a contract for sensitive UK financial data to a “Trump-aligned tech giant seems like a huge error of judgment”. She highlighted Palantir’s years spent “embedding itself within the Maga machine”.
The Green Party’s Siân Berry went further, demanding the government “step in immediately and protect our national and economic security by blocking this contract award”. She argued companies like Palantir, which she said are “closely involved in President Trump’s illegal wars,” should have no place in UK government systems.
Their concerns are rooted in Palantir’s foundations and its work. The company was co-founded by Peter Thiel, a billionaire and significant donor to Donald Trump, and has built a reputation as a “spy-tech” firm through substantial contracts with US and Israeli military and intelligence agencies. It has also faced intense criticism for its work with US Immigration and Customs Enforcement (ICE), which critics link to warrantless surveillance and racial profiling.
The depth of data and the nature of the risk
While the FCA states the trial data will not include trading records, the official announcement says Palantir will work across “all FCA datasets”. Insiders have said this could include personal details and some trading information where related to potential wrongdoing, and may involve processing large volumes of emails, call recordings, and social media data.
There are specific fears about Palantir staff gaining access to data concerning sensitive, high-profile FCA investigations, such as those involving the banker Jes Staley—an associate of the late sex offender Jeffrey Epstein—and the hedge fund manager Crispin Odey.
Beyond individual cases, privacy advocates and critics point to a broader risk known as the “mosaic effect”. They warn that Palantir’s platforms are designed to extract and exploit metadata, potentially combining seemingly innocuous data points from across its many government contracts to build a comprehensive profile, in this context, of the UK’s financial ecosystem or even the population. Ministry of Defence engineers have previously raised similar national security concerns about this capability.
One FCA insider told The Guardian that available information was “very lacking in details about how the obvious risks would be controlled or limited,” questioning if sufficient safeguards were in place to prevent the data lake from being exploited in unintended ways.
Safeguards and the ‘data processor’ defence
In response, the FCA has laid out a series of contractual and technical safeguards. It insists Palantir will act solely as a “data processor”, not a “data controller”, meaning it can only act on specific instructions from the regulator and cannot use the data for its own purposes.
The regulator states it will retain exclusive control over the encryption keys for the most sensitive files, that all data will be hosted and stored solely in the UK, and that Palantir will be required to destroy the data after the contract completes. Any intellectual property derived from the analysis must be retained by the FCA.
An FCA spokesperson said: “Criminals aren’t slow to use technology to cause harm – we need to stay ahead of them. We can run a trial to help us do that while maintaining strict data controls.” They added there was no risk of “lock-in” – a concern raised by campaigners – as this was just a trial.
Palantir’s pushback and its expanding UK footprint
Palantir has vigorously defended its role and its technology. The company said it was proud its software was being used “to support the FCA in their vital work,” and stressed that the “data cannot be commercialised in any way” and its software can only be used “in strict accordance with the instructions of the customer”.
Louis Mosley, Palantir’s executive vice-president for UK and Europe, has recently sought meetings with MPs to address what he calls “misconceptions” about its technology. He denies the company would ever use customer data for its own purposes, stating this is something it has “no business interest in” and is “legally and contractually prevented from doing”. The company states it takes a “rigorous approach” to human rights.
Critics, however, see the FCA trial as part of a deliberate and expanding pattern. Palantir has secured over £500m in UK public sector contracts, employing what opponents describe as a classic “land and expand” strategy. Its major deals include a £330m contract for the NHS’s Federated Data Platform—currently facing legal challenges—and at least £382m in contracts with the Ministry of Defence, including a recent £240m award granted without competition.
Martin Wrigley, a Liberal Democrat member of the Commons technology committee, warned of creating a “single behemoth that our UK firms won’t be able to compete against,” arguing “we should be developing our own industries”. This sentiment echoes a promised government shift in tech procurement towards investing in UK capability, announced after previous controversy over Palantir’s NHS deal.
Donald Campbell of the campaign group Foxglove, which is challenging the NHS contract, called the FCA deal “another worrying sign that Palantir is consolidating its hold over UK government services,” warning of the serious risk of permanent “lock-in”.
