Anomaly detection is a vital technique for identifying data points that deviate from the norm, commonly used in fields such as manufacturing, cybersecurity, and fraud detection. The blog introduces the K-nearest neighbors (KNN) method as a prevalent approach in anomaly detection, which evaluates the similarity of data points based on their distance in a multi-dimensional space. KNN relies on calculating distances to determine if a data point is anomalous, but this presents challenges when working with sensitive data due to privacy concerns. Homomorphic Encryption (HE) is highlighted as a solution that allows calculations on encrypted data without revealing it, although complex computations like those required for KNN can be difficult with HE. Duality Technologies addresses this challenge with a patented technique that detects outliers in encrypted datasets while preserving data privacy, reflecting the increasing importance of security in data analysis.