Scalable and Verifiable Federated Learning for Cross-Institution Financial Fraud Detection

Financial fraud increasingly exploits institutional boundaries: laundering networks distribute transactions across multiple banks because no single institution can observe the full pattern. Federated Learning (FL) enables collaborative detection without raw data sharing, yet practical deployment in banking environments remains constrained by three pressures. First, homomorphic encryption schemes impose high computational costs that limit real-time aggregation at scale. Second, mask-based protocols such as Google's SecAgg require O(N^2) pairwise key exchanges, which become inefficient as participant count grows. Third, existing protocols provide limited verification that submitted gradient...

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