Federated machine learning: generating value from shared data while maintaining privacy

Data is a fundamental resource for improving our quality of life because it enables better decision-making processes to create personalised products and services, both in the public and private sectors. In contexts such as health, mobility, energy or education, the use of data facilitates more efficient solutions adapted to people's real needs. However, in working with data, privacy plays a key role. In this post, we will look at how data spaces, the federated computing paradigm and federated learning, one of its most powerful applications, provide a balanced solution for harnessing the potential of data without compromising privacy. In addition, we will highlight how federated learning can also be used with open data to enhance its reuse in a collaborative, incremental and efficient way.

Privacy, a key issue in data management

As mentioned above, the intensive use of data requires increasing attention to privacy. For example, in eHealth, secondary misuse of electronic health record data could violate patients' fundamental rights. One effective way to preserve privacy is through data ecosystems that prioritise data sovereignty, such as data spaces. A dataspace is a federated data management system that allows data to be exchanged reliably between providers and consumers. In addition, the data space ensures the interoperability of data to create products and services that create value. In a data space, each provider maintains its own governance rules, retaining control over its data (i.e. sovereignty over its data), while enabling its re-use by consumers. This implies that each provider should be able to decide what data it shares, with whom and under what conditions, ensuring compliance with its interests and legal obligations.

Federated computing and data spaces

Data spaces represent an evolution in data management, related to a paradigm called federated computing, where data is reused without the need for data flow from data providers to consumers. In federated computing, providers transform their data into privacy-preserving intermediate results so that they can be sent to data consumers. In addition, this enables other Data Privacy-Enhancing Technologies(Privacy-Enhancing Technologies)to be applied. Federated computing aligns perfectly with reference architectures such as Gaia-X and its Trust Framework, which sets out the principles and requirements to ensure secure, transparent and rule-compliant data exchange between data providers and data consumers.

Federated learning

One of the most powerful applications of federated computing is federated machine learning ( federated learning), an artificial intelligence technique that allows models to be trained without centralising data. That is, instead of sending the data to a central server for processing, what is sent are the models trained locally by each participant.

These models are then combined centrally to create a global model. As an example, imagine a consortium of hospitals that wants to develop a predictive model to detect a rare disease. Every hospital holds sensitive patient data, and open sharing of this data is not feasible due to privacy concerns (including other legal or ethical issues). With federated learning, each hospital trains the model locally with its own data, and only shares the model parameters (training results) centrally. Thus, the final model leverages the diversity of data from all hospitals without compromising the individual privacy and data governance rules of each hospital.

Training in federated learning usually follows an iterative cycle:

1. A central server starts a base model and sends it to each of the participating distributed nodes.
2. Each node trains the model locally with its data.
3. Nodes return only the parameters of the updated model, not the data (i.e. data shuttling is avoided).
4. The central server aggregates parameter updates, training results at each node and updates the global model.
5. The cycle is repeated until a sufficiently accurate model is achieved.

Figure 1. Visual representing the federated learning training process. Own elaboration

This approach is compatible with various machine learning algorithms, including deep neural networks, regression models, classifiers, etc.

Benefits and challenges of federated learning

Federated learning offers multiple benefits by avoiding data shuffling. Below are the most notable examples:

1. Privacy and compliance: by remaining at source, data exposure risks are significantly reduced and compliance with regulations such as the General Data Protection Regulation (GDPR) is facilitated.
2. Data sovereignty: Each entity retains full control over its data, which avoids competitive conflicts.
3. Efficiency: avoids the cost and complexity of exchanging large volumes of data, speeding up processing and development times.
4. Trust: facilitates frictionless collaboration between organisations.

There are several use cases in which federated learning is necessary, for example:

• Health: Hospitals and research centres can collaborate on predictive models without sharing patient data.
• Finance: banks and insurers can build fraud detection or risk-sharing analysis models, while respecting the confidentiality of their customers.
• Smart tourism: tourist destinations can analyse visitor flows or consumption patterns without the need to unify the databases of their stakeholders (both public and private).
• Industry: Companies in the same industry can train models for predictive maintenance or operational efficiency without revealing competitive data.

While its benefits are clear in a variety of use cases, federated learning also presents technical and organisational challenges:

• Data heterogeneity: Local data may have different formats or structures, making training difficult. In addition, the layout of this data may change over time, which presents an added difficulty.
• Unbalanced data: Some nodes may have more or higher quality data than others, which may skew the overall model.
• Local computational costs: Each node needs sufficient resources to train the model locally.
• Synchronisation: the training cycle requires good coordination between nodes to avoid latency or errors.

Beyond federated learning

Although the most prominent application of federated computing is federated learning, many additional applications in data management are emerging, such as federated data analytics (federated analytics). Federated data analysis allows statistical and descriptive analyses to be performed on distributed data without the need to move the data to the consumers; instead, each provider performs the required statistical calculations locally and only shares the aggregated results with the consumer according to their requirements and permissions. The following table shows the differences between federated learning and federated data analysis.

Figure 1. Comparative table. Source: own elaboration

Federated learning and open data: a symbiosis to be explored

In principle, open data resolves privacy issues prior to publication, so one would think that federated learning techniques would not be necessary. Nothing could be further from the truth. The use of federated learning techniques can bring significant advantages in the management and exploitation of open data. In fact, the first aspect to highlight is that open data portals such as datos.gob.es or data.europa.eu are federated environments. Therefore, in these portals, the application of federated learning on large datasets would allow models to be trained directly at source, avoiding transfer and processing costs. On the other hand, federated learning would facilitate the combination of open data with other sensitive data without compromising the privacy of the latter. Finally, the nature of a wide variety of open data types is very dynamic (such as traffic data), so federated learning would enable incremental training, automatically considering new updates to open datasets as they are published, without the need to restart costly training processes.

Federated learning, the basis for privacy-friendly AI

Federated machine learning represents a necessary evolution in the way we develop artificial intelligence services, especially in contexts where data is sensitive or distributed across multiple providers. Its natural alignment with the concept of the data space makes it a key technology to drive innovation based on data sharing, taking into account privacy and maintaining data sovereignty.

As regulation (such as the European Health Data Space Regulation) and data space infrastructures evolve, federated learning, and other types of federated computing, will play an increasingly important role in data sharing, maximising the value of data, but without compromising privacy. Finally, it is worth noting that, far from being unnecessary, federated learning can become a strategic ally to improve the efficiency, governance and impact of open data ecosystems.

Jose Norberto Mazón, Professor of Computer Languages and Systems at the University of Alicante