BRITAIN’S Financial Conduct Authority (FCA) has today (Wednesday) provided updates on its Synthetic Data Expert Group (SDEG).
The group was established in March to explore the use of synthetic data in financial markets. The FCA’s group brings together 21 experts from across financial services, public sector, data and technology vendors, and consumer groups.
It has now held four meetings of the SDEG between May and October and has given and update and is seeking feedback on the group’s progress.
The group plans to run until November 2024 and aims to provide practical and tangible synthetic data insights for practitioners and policymakers. This includes:
Report on using synthetic data in practice
The group will produce a report providing practical experiences of using synthetic data to help practitioners and policymakers. The report will explore lessons learned and good practice with use cases on the following themes:
- Data augmentation and bias mitigation: the use of synthetic data to artificially increase underrepresented groups or data points to reduce bias in a dataset.
- System testing and model validation: the use of synthetic data to confirm that a system or model achieves its intended purpose.
- Data sharing (internal and external): the process of making synthetic data available to multiple users (eg within an organisation) or organisations (eg third party vendors, research institutions).
The group’s members will provide insights into generation techniques, evaluation metrics, and internal stakeholder management when using synthetic data.
The report will explore the use of synthetic data across several use cases including fraud detection and controls, credit scoring, anti-money laundering (AML) and open banking.
Framework between public and private sector
Regulators globally are developing ways to enable public-private collaboration on data sharing and Privacy Enhancing Technologies (PETs).
“As part of the SDEG, we‘ll create a framework that enables organisations to collaborate on synthetic data use cases, for example by using our Digital Sandbox,” the group said today (Wednesday).
The framework is in the early stages of development and will likely focus on some of the identified priority use cases, such as fraud. “We’ll share more information on this next year, but this is subject to change depending on market needs and priorities of the SDEG,” the group said
“We welcome input and industry views on the design of the framework.”
Benefits of data
Data has the power to unlock significant transformation across financial services, enhancing operational efficiencies, reducing compliance costs, and improving consumer outcomes.
Recognising the importance of privacy, innovators are increasingly adopting PETs to harness the insights from data while safeguarding consumers’ right to privacy.
‘Synthetic data’ is one example of a PET that we’ve explored through initiatives such as our Digital Sandbox, TechSprints, and roundtable events. “We see our role as encouraging responsible innovation that enhances consumer values and protects one of their greatest assets: their data,” the group said.
How to get involved
The group says it is always looking to connect with experts on synthetic data related matters. If you’re a policymaker, practitioner, academic, fintech or have interest in the findings of the report, they want to hear from you.
If you have feedback on the report outlined above, or the SDEG more broadly, email: SyntheticDataEG@fca.org.uk.