UK Markets Watchdog Says ‘Synthetic Data’ Can Help Choice, Innovation
Britain’s financial watchdog said on Thursday it will press ahead with plans to make available “synthetic data” to help boost innovation and choice in financial services following a consultation last year.
Synthetic data refers to customer data that has been stripped of certain information or encrypted to preserve privacy, making it easier to share between companies, such as fintechs, that want to offer competing financial services.
Data protection laws make it more difficult for third-party companies to access customer data held by long-established banks and insurance companies.
The Financial Conduct Authority (FCA) last year published a consultation document on synthetic data.
Respondents said it would be useful as a complement to efforts to combat financial crime and for environmental, social and governance (ESG) purposes.
“Based on the feedback to the Call for Input and previous research, our current position is that synthetic data can potentially make a significant contribution to beneficial innovation in UK financial markets,” the FCA said in a statement on Thursday.
It will host a joint industry-academic roundtable in the coming weeks in partnership with the Alan Turing Institute and the Information Commissioner’s Office (ICO) to understand the challenges of validating synthetic data.
“We will continue to engage loosely with the ICO to explore opportunities for data sharing in financial services within the boundaries of UK data protection regulations,” the FCA said.