Perada: Parameter-Efficient Federated Learning Personalization with Generalization Guarantees

Personalized Federated Learning (pFL) has emerged as a promising solution to tackle data heterogeneity across clients in FL. However, existing pFL methods either (1) introduce high computation and communication costs or (2) overfit to local data, which can be limited in scope and vulnerable to evolved test samples with natural distribution shifts. In this paper, we propose PERADA, a parameter-efficient pFL framework that reduces communication and computational costs and exhibits superior generalization performance, especially under test-time distribution shifts. PERADA reduces the costs by leveraging the power of pretrained models and only updates and communicates a small number of additional parameters from adapters. PERADA achieves high generalization by regularizing each client's personalized adapter with a global adapter, while the global adapter uses knowledge distillation to aggregate generalized information from all clients. Theoretically, we provide generalization bounds of PERADA, and we prove its convergence to stationary points under non-convex settings. Empirically, PERADA demonstrates higher personalized performance (+4.85% on CheXpert) and enables better out-of-distribution generalization (+5.23% on CIFAR-10-C) on different datasets across natural and medical domains compared with baselines, while only updating 12.6% of parameters per model. Our code is available at https://github.com/NVlabs/PerAda.