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Understanding the power of Synthetic Data in Financial Services: Exploring the legal implications

JULY 2023

Pinsent Masons and Smart Data Foundry join forces to discuss the growing use of synthetic data in the financial sector and the associated legal implications of this new and emerging area.

Pinsent Masons and Smart Data Foundry recently hosted a webinar where industry experts, including Smart Data Foundry’s Bryn Coulthard and David Tracy, together with Luke Scanlon, Jonathan Kirsop, Mark Marfé, and Holly Lambert from Pinsent Masons, gathered to discuss synthetic data and its legal implications within the financial services sector. The event shed light on the innovative applications of synthetic data and emphasised the importance of understanding the legal, regulatory, compliance, and risk considerations associated with its use.

The webinar explored the growing adoption of synthetic data in financial services, highlighting its role in training AI models, detecting payment fraud, identifying market data and customer behaviour trends, and other crucial applications within the industry. With the Financial Conduct Authority (FCA) placing increasing emphasis on synthetic data, it has become imperative for financial institutions to gain a comprehensive understanding of the legal landscape surrounding its use and applications.

Throughout the session, attendees engaged in insightful discussions and gained valuable insights on a range of topics related to synthetic data. The themes and topics discussed included:

Understanding Synthetic Data

Participants gained a clear understanding of what synthetic data is and how it can be distinguished from real data. The discussion covered the significance of identifying legal and regulatory risks associated with synthetic data usage.

Synthetic Data in AI foundation models and beyond

The relevance of synthetic data in training AI foundation models and its potential in various use cases were explored. Attendees were presented with practical examples showcasing the benefits and challenges of leveraging synthetic data in different financial services applications.

Addressing key concerns

The session emphasised the importance of addressing key considerations such as data protection, security, confidentiality, commercial contracting, and licensing. The experts provided guidance on how to navigate these concerns and innovate responsibly with synthetic data.

The webinar concluded with a lively Q&A session, allowing attendees to seek clarification and gain further insights from the expert panel. The event served as a valuable platform for knowledge sharing and highlighted the importance of staying informed and compliant in the ever-evolving landscape of synthetic data within the financial services industry.

As financial institutions strive to enhance their operational efficiency, develop robust AI models, and combat fraud effectively, synthetic data emerges as a powerful tool. By comprehending the legal considerations and addressing associated risks, financial service providers can unlock the true potential of synthetic data and revolutionise their operations.

For more information and to access the recording of the webinar, please visit Pinsent Masons here. 

You can also view the slides from the presentation here.