Introduction

With the heightened awareness regarding data privacy across the globe, PET stands as an efficient solution for organizations trying to achieve privacy. From large companies to federal organizations, the demand for the protection of individuals’ data increases year by year. As the risk of cyber-attacks increases, the rules and requirements emerge, and customers develop a greater understanding and demand for PETs, this technology is being integrated into various sectors such as finance, health care, artificial intelligence, and cloud storage. Currently, fully homomorphic encryption (FHE), secure multi-party computation (MPC), and zero-knowledge proofs (ZKP) are implemented in the security of the big horses, including IBM, Microsoft, and Google.

According to the UnivDatos, rising data privacy regulations, growing cybersecurity threats, expansion of AI & machine learning, increasing demand for secure data sharing, growth in cloud computing & edge computing, adoption of homomorphic encryption & secure computation, surging investment in fintech & healthcare drive the privacy enhancing technologies market. As per their “Privacy Enhancing Technologies Market” report, the global market was valued at USD 2.45 Billion in 2023, growing at a CAGR of about 25% during the forecast period from 2024 - 2032 to reach USD Billion by 2032.

The Growing Demand for PETs

This has resulted in an increased focus on privacy in computer systems due to the increased number of data breaches and cyber-attacks. PE beneficiaries are organizations, governments, and customers, and the requirement arises from the pressure from policies such as the EU GDPR, the CCPA from the United States, and China’s PIPL. These laws require higher level of data protection, which has the inclination towards the adoption of PETs in organizations that handle user Data.
In the industry of banking, financial services, and insurance (BFSI), PETs have brought drastic changes to prevent fraud and improve electronic transactions. MPC and confidential computing are being adopted by financial institutions for private risk assessment, AML checks, and identity verification. In the same way, concerning healthcare, PETs facilitate the exchange of health information while keeping with the HIPAA and other legal requirements on the privacy of patients. The implementation of differential privacy and FHE ideas for medical research is making it possible to achieve joint research studies while not infringing on any subject’s health details.

Latest Trends in the PETs Market

Mainstream Adoption of Fully Homomorphic Encryption (FHE)

. On January 17, 2025, Niobium developed co-processors that provide hardware-based acceleration for fully homomorphic encryption (FHE), enabling data to remain encrypted even while in use.

· On October 13, 2022, Vaultree announced the release of its Data-in-Use Encryption for Google’s AlloyDB. As a launch partner with Google’s AlloyDB, the offering pairs the world's first fully functional Encryption-in-use solution powered by Vaultree with Google’s AlloyDB for PostgreSQL. Users will now be able to trial running Vaultree’s fully homomorphic and searchable encryption technology in the cloud, representing a breakthrough in encryption standards to enable next-generation encryption and data protection.

FHE can be defined as the most revolutionary technology in cloud computing and Machine learning techniques. It is worth calling FHE flexible computation because, with it, an organization can perform computations on encrypted data without decrypting it thus avoiding compromising its security. Currently, a lot of companies, including IBM and Google, are actively implementing FHE-assisted confidential computing, whereby enterprises are capable of performing calculations on encrypted Data.

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The Rise of Secure Multi-Party Computation (MPC) in Digital Transactions

MPC is being adopted for private and secure banking services that are offered due to the shift towards the digital financial system. MPC has come up as a way through which banks and fintech companies share computations safely without disclosing sensitive data hence helping in the area of, fraud detection, and risk control. MPC is currently implementing transaction security solutions for JPMorgan, Mastercard, and Visa to enforce financial privacy legislation throughout the world.

In recent times blockchain networks have integrated the use of ZKP which helps in the validation of transactions without exposing the actual information. This is of significant importance in Defi, identification, and security of an individual’s identity. Decentriq and Silence Laboratories are using the technology to make users’ experience in Web3 applications and Decentralized identity more private.

Privacy-Preserving AI and Federated Learning

Due to the need for input, especially big data, AI models are often prone to the issue of privacy. One such technique is federated learning which is a PET-enabled technique that enables organisations to train AI models on the distributed data feeds without compromising on the raw data. This is applicable in areas such as the healthcare industry where the privacy of a patient is usually very important. Currently, the most progressive in the field of privacy-preserving AI technologies are Google, Microsoft, and Amazon Web Services (AWS).

Regulatory Pressure Driving PET Adoption

Whereas, consumers demand security and privacy, and governments around the globe are enacting policies that enhance the use of PETs. The Constructed European Union’s AI Act along with NIST guidelines are initiating companies to implement PETs in the security model. Many industries are concerned with the application of regulatory laws in their performance, so they use privacy-first data analysis, secret computing, and encrypted data handling.

Regional Market Growth

On February 7, 2022, IAB Tech Lab, the digital advertising technical standard-setting body, announced the newly formed Privacy Enhancing Technologies (PETs) Working Group. This new workstream invites developers working on advanced cryptography, data scientists, privacy and security systems engineers, and others in the digital advertising community to come together to develop privacy-enhancing standards and software tools for the digital advertising industry.

North America dominates the market for PETs due to the higher regulatory standards and increased funding for security in Artificial Intelligence and cloud computing sectors. Several companies in the United States of America are dedicating a lot of resources to confidential computing, federated learning, and homomorphic encryption.

It has been discovered that the adoption of PET in Asia-Pacific is increasing due to increasing data protection and the growth of digital finance and healthcare industries. The countries such as China, India, and Japan are already implementing blockchain-based privacy solutions and secure AI training models.

The European continent has been particularly adopter of stringent privacy laws, and this makes the PET feature very prominently in banking, healthcare, and governmental sectors to meet GDPR requirements.

The Future of PETs

Overall, the elements of the future driving the Privacy Enhancing Technologies growth can be concluded by naming quantum-safe cryptography, AI Privacy, and Cloud Computing Security trends. Those businesses that are going to invest in PETs now will be in a strong position to compete when it comes to data privacy and protection as well as compliance with laws.

Given the issues of the usage of the Internet threats and the increasing pressure from the main regulations, Privacy privacy-enhancing technologies have become a need for every firm in all fields. Organizations that are adopting homomorphic encryption, secure computation, and privacy-preserving AI are going to be the ones leading the way in the safe management of data in the digital environment. 

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