Data Snacks

Data Snack: Opportunities in generating synthetic financial data

  • Collecting, organizing and sharing data can be a costly and risky process.
  • FIs and Big Tech are looking into generating 'synthetic data'. Which mimics real data but removes the risk of privacy breaches occurring due to exposure of Personally Identifiable Information.

Email a Friend

Data Snack: Opportunities in generating synthetic financial data

While data can be exceptionally useful for analytics and strategizing, mismanaging access to it can lead to significant security risks for both organizations and consumers. Personally Identifiable Information  poses a challenge for organizations, who generally want to retain as much detail as they can, without exposing customers to privacy risks.

One solution is synthetically generated data, which mimics real data sets but does not hold any PII. Moreover, synthetic data circumvents the labor and costs attached to data collection and organization, allowing teams to develop algorithms faster and with less red tape.

In the past year companies like Microsoft, Google, and Amazon have all spoken to the importance of synthetic data and its use in their current architecture. San-Diego based startup and synthetic data creator closed a $50 million Series B funding round in October, led by Anthos Capital. Their products, such as a privacy toolkit, safeguard synthetic data from adversarial attacks and also enables teams to de-bias and anonymize their data sets, while also allowing for the sharing of data among teams more securely.

JP Morgan’s AI research has developed the following model for generating synthetic data sets: 

Source: JP Morgan

The flow diagram is explained by JP Morgan as follows: 

Step 1:  Compute metrics for the real data
Step 2:  Develop a Generator (may be statistical methods or an agent-based simulation)
Step 3:  (Optional) Calibrate the Generator using the real data
Step 4:  Run the Generator to generate synthetic data
Step 5:  Compute metrics for the synthetic data
Step 6:  Compare the metrics of the real data and synthetic data
Step 7:  (Optional) Refine the Generator to improve against comparison metrics

In their research on the subject, JP Morgan found that tabular data in retail banking and time series of market microstructure data are the most in need of protection by financial institutions.

Tune into our Data Day Conference on the 21st of June to find out more about how data is changing the fintech landscape. 

0 comments on “Data Snack: Opportunities in generating synthetic financial data”

Data Snacks, Member Exclusive

Data Snack: SMBs are growing increasingly resilient against macro headwinds

  • SMBs are confident they can successfully get through another period of economic difficulty despite inflation and supply chain issues, a new survey by Kabbage shows.
  • Having experienced the pandemic, SMBs feel better prepared to successfully navigate another period of economic turbulence.
Iulia Ciutina | June 28, 2022
Data Snacks

Data Snack: US consumer credit remains healthy in Q1 despite macro headwinds

  • The uncertain macroeconomic environment is incentivizing consumers to be disciplined around their spending, which hasn’t yet recovered to pre-pandemic levels.
  • Despite inflation and rising interest rates, consumers continue to show healthy behaviors when it comes to paying off their debt.
Iulia Ciutina | June 27, 2022
Data Snacks

Data Snack: DAOs are gaining traction with consumers as well as regulators

  • The number of DAOs has increased by 8.8 times, reaching 6000.
  • A leaked draft of an upcoming bill shows that regulators may soon call for founders and users of all DAOs to disclose their identity to the government.
Rabab Ahsan | June 17, 2022
Data Snacks

Data snack: Defining the role of the Bank CMO

  • With banks shifting towards more personalized services, the CMO’s role in the industry is becoming increasingly complicated.
  • But banks’ legacy systems and internal structures could pose a challenge for CMOs up for the job.
Rivka Abramson | May 19, 2022
Data Snacks, Member Exclusive

Data snack: US banks’ growth rates are down in Q1 2022

  • Growth is stalling across the US banking sector, with both deposits and loans up marginally from the fourth quarter of 2021.
  • This could be an indicator of current macroeconomic conditions, as the Federal Reserve tightens up market conditions so that the economy will moderate.
Iulia Ciutina | May 18, 2022
More Articles