FHE Part 2: Competitive Analysis of Solution Providers and Financial Applications

While Part 1 helped us understand why FHE represents a paradigm shift for financial institutions, the pragmatic question remains: who are the players capable of transforming this mathematical promise into operational solutions?

This second part provides an analytical mapping of the emerging FHE competitive landscape, exploring how three distinct archetypes approach the challenge of making FHE accessible and useful for financial services.

The Tech Giants: IBM and Microsoft

Major technology companies, IBM and Microsoft, have adopted a cautious but strategic approach, positioning FHE as a foundational building block to secure their cloud ecosystems.

IBM: The Research Pioneer

As a historical pioneer in FHE research since Craig Gentry's groundbreaking work, IBM has developed several open-source libraries, with HElayers being their latest SDK designed to facilitate FHE application prototyping in C++ and Python.

IBM's strategy focuses on providing tools and consulting services to help enterprises, particularly in financial services, explore high-value use cases such as:

• Predictive fraud analysis
• Risk assessment on sensitive data
• Secure collaborative analytics

Their collaboration with Brazilian bank Banco Bradesco for a pilot machine learning project on encrypted banking data validates the maturity of their technology for the financial sector.

Microsoft: The Platform Integrator

Microsoft's approach centers on their open-source Microsoft SEAL library, which has become one of the most popular and widely used in both academic and industrial settings. SEAL implements BFV and CKKS schemes, making it versatile for various financial applications.

Microsoft's positioning is clear: use FHE to strengthen trust in cloud services, particularly Azure. By enabling clients to process their most sensitive data on the cloud without ever exposing it in plain text, Microsoft aims to remove one of the main barriers to migrating critical banking workloads like:

• Anti-money laundering (AML) monitoring
• Fraud detection systems
• Regulatory compliance processing

The Privacy Specialists: Enveil and Duality Technologies

Unlike the giants, a new generation of startups focuses on providing integrated platforms that use FHE to solve concrete business problems.

Enveil: The Use Case Pragmatist

Enveil positions itself as a leader in Privacy Enhancing Technologies (PETs) with their ZeroReveal® platform, designed to secure data in use. Their approach is pragmatic and use-case oriented.

Key financial applications include:

• Secure KYC collaboration: Banks can verify if a potential customer appears on external watchlists without revealing the customer's identity
• Risk management: Secure supplier risk assessment
• Data monetization: Safe data sharing for analytics

Duality Technologies: The Multi-Party Specialist

Duality offers a data collaboration platform that sophisticatedly combines FHE with other PETs, particularly Secure Multi-Party Computation (MPC). This hybrid approach enables robust and performant solutions for multi-party scenarios.

Their financial vertical solutions address:

• Fraud prevention
• Anti-money laundering (AML)
• Risk scoring
• Trade finance
• KYC compliance

Duality's credibility is reinforced by strategic partnerships with major players like AWS, Oracle, Intel, and DARPA, plus recognition from organizations like the World Economic Forum.

The Blockchain Pioneers: Zama and the Web3 Ecosystem

A third group of players, led by Parisian startup Zama, adopts an even more radical approach: using FHE not to secure existing systems, but to build a new natively confidential financial infrastructure on blockchain.

Zama: The Protocol Disruptor

Zama is at the forefront of this revolution with their open-source suite including:

• TFHE-rs library (based on the TFHE scheme with fast bootstrapping)
• Concrete compiler (transforms Python code into FHE equivalent)
• fhEVM (Fully Homomorphic Ethereum Virtual Machine)

The fhEVM allows developers to write and deploy confidential smart contracts using Solidity, addressing the fundamental transparency problem of public blockchains that prevents financial institution adoption.

Revolutionary use cases enabled:

• Confidential tokens: ERC-20 where balances and transaction amounts are permanently encrypted
• Confidential DeFi: Lending protocols with secret collateral amounts and even unsecured loans based on encrypted on-chain credit scores
• Confidential decentralized identity (DID): Storage and verification of identity attributes without revealing personal data

Their recent $73 million funding round demonstrates immense market interest in this vision.

Strategic Positioning Comparison

Strategic Implications for Financial Institutions

The analysis reveals a dynamic market where different philosophies compete. The choice of an FHE partner for a bank fundamentally depends on its strategic ambition:

Short-term Optimization

Choose Tech Giants if you want to:

• Experiment with FHE using proven libraries
• Leverage existing cloud infrastructure
• Maintain full control over implementation

Specific Problem Solving

Choose Privacy Specialists if you need to:

• Address specific compliance challenges quickly
• Reduce implementation complexity
• Focus on business outcomes over technical details

Future Infrastructure

Choose Blockchain Pioneers if you aim to:

• Participate in next-generation financial infrastructure
• Enable new business models with native privacy
• Invest in long-term competitive advantage

Market Evolution and Opportunities

The FHE landscape is rapidly evolving, with each archetype addressing different aspects of the privacy-utility trade-off. Financial institutions that understand these distinctions can:

1. Portfolio approach: Partner with multiple types for different use cases
2. Strategic timing: Start with specialists for immediate needs while building capabilities for future disruption
3. Competitive differentiation: Use FHE adoption as a competitive moat in regulated markets

The emergence of this diverse ecosystem suggests that FHE is moving from research curiosity to practical deployment, with financial services leading the adoption curve.

Read the complete competitive analysis on LinkedIn for detailed insights into solution providers and their strategic positioning in the financial sector.