In the fast-paced world of fintech, success relies on two key elements: growth and innovation. Data, the driving force behind innovation, plays a crucial role in shaping new products, enhancing customer experiences, and improving risk management strategies.

However, for fintech companies, accessing the right data for innovation poses significant challenges. Despite banks and financial institutions hold- ing vast amounts of data, hurdles such as privacy concerns, data scarcity and security issues hinder the sharing of sensitive customer data. These barriers become stumbling blocks, slowing down innovation and affecting broader economic growth.

Breaking down data barriers with synthetic data

In July 2023, in collaboration with Fintech Scotland, Smart Data Foundry launched the UK Fintech Innovation Challenge. This groundbreaking initiative sought to inspire ideas for data-led solutions that aimed to foster the prosperity and sustainable growth of small and medium-sized enterprises (SMEs). Departing from traditional approaches, the challenge harnessed the power of AI-simulated synthetic data to invigorate collaboration and rapidly advance the fintech sector.

Supported by Virgin Money and NatWest, the challenge aimed to strengthen relationships between financial institutions and their SME clients by unlocking the potential of data for innovative solutions.

Participating fintech companies gained access to an AI-simulated synthetic SME dataset generated by Smart Data Foundry’s aizle® plat- form, ensuring a safe environment to confidently develop and test their propositions.

Smart Data Foundry’s aizle® platform generates synthetic data using advanced AI techniques in the form of agent-based simulation.

This enables the creation of synthetic data with a level of safety not possible with more traditional methods of synthetic data creation, while not only emulating, but surpassing, the detail and complexity of real-world data. This removes the requirement for financial institutions to share sensitive customer data with third parties and fintechs, significantly reducing risk.

AI-simulated synthetic data offers many advantages when used as an innovation-enabler:

  • It can be used to create broader and more diverse datasets. Traditional methods for generating synthetic data are typically limited by the availability and shape of real data. AI-simulated synthetic data needs no real data as input and can generate data for scenarios rarely found in real data, providing a valuable window into wider consumer behaviour and relationships.
  • It protects privacy. AI-simulated synthetic data is entirely synthetic, so there is zero risk of compromising personal information. This makes it a safe and secure way to test solutions, and to collaborate with others who may not be authorised to access real data. Referential integrity and ground truth are built into the generation process, so there is no data quality loss or censoring associated with pseudonymisation or other traditional privacy protecting techniques.
  • Collaboration and centralised learning. Innovation thrives in a collaborative environment; synthetic data is an enabler for synergistic collaboration, providing a consortium-level dataset to fuel centralised learning, ultimately accelerating the development of industry-driven solutions.

By dismantling data barriers and mitigating risks using synthetic data, this innovation-call initiative not only fostered collaboration but empowered fintech organisations to tap into the transformative potential of data.

Amplifying economic growth with data-driven innovation

The impact of this collaborative revolution extends beyond SMEs and fintech companies. By enabling data- driven innovation without compromising privacy or security, synthetic data has the potential to amplify economic growth across the entire financial sector.

As fintech organisations leverage synthetic data to develop and test innovative products and services more quickly, this will contribute to a more efficient, responsive, and customer- centric financial landscape. This, in turn, will drive economic growth, stimulate job creation, and enhance overall financial wellbeing.

Powering the future of innovation

Synthetic data-powered innovation calls mark a turning point as digital transformation enters the AI era. En- visioning a future where collaboration and innovation converge, this initiative clearly shows how synthetic data can act as a transformative catalyst, unlocking the potential not only of data but across the entire fintech industry and beyond.