Synthetic data offers path to digital transformation

Innovative financial services technologies are looking to share and process vast amounts of data while maintaining stringent privacy standards - and use of synthetic data may provide a way to fulfil both of these imperatives. Charlotte Witherington and Daniel Hirschfield review the FCA's work on synthetic data and the findings of a new report.

Charlotte Witheringtonis a partner and financial services regulatory specialist at Taylor Wessing in London, whereDaniel Hirschfieldis senior counsel - knowledge. Contact them onc.witherington@taylorwessing.com andd.hirschfield@taylorwessing.com.

The application of computer-generated synthetic data to problem-solving is not new; it has a long history dating back to at least the 1940s when mathematicians developed Monte Carlo simulations. [1] In the past few years, it has emerged as a high priority area for innovation in financial markets and services, and regulators around the world have put in place initiatives to look into the risks and opportunities surrounding its use.