Stibo Systems - The Master Data Management Company
Stibo Systems - The Master Data Management Company

What Is Synthetic Data and Why Does It Need Master Data Management?

 |
November 05 2020
| 4 minute read

Synthetic data is the test data that makes your business operations run smoothly; and if those operations are automated with AI, it's essential to use master data management (MDM) to make sure your decisions are unbiased.

Data generates data which in turn generates more data. How do we know if what is being produced is fit for purpose? What if a bot, designed to help us to make an informed investment decision or simply provide us with the best answer to our customer services question, gets it wrong?

Obviously, testing all the different corners of solution sets is important. As AI takes a more dominant role in automating decision processes, it becomes essential to make sure MLOps - enabled by MDM - is working from good data that is explainable (XAI) and free from bias.

what is synthetic data and why is synthetic data used in financial services

Before data becomes operational, it often needs to be organized into data sets to support different types of testing and modelling requirements in order to see how applications, analytical models and AI-based processes will perform against these real-world/representative/experimental data sets. This is where you need synthetic data.

 

What is synthetic data?

Synthetic data is generated algorithmically to compensate for real-world data. It supports requirements where real operational data might not be sufficient. In many cases, synthetic data derives much of its content from production data; and synthetic data will often be true to the statistical nature of the source information without being an exact copy. Over and above representative real-world data, synthetic data may also include data sets that drive “paths” to test expectations on system behaviour under certain conditions and facilitate predictive analytics.

Obviously, synthetic data needs to equal the same level of trust as operational data to be able to deliver useful results. Synthetic data must also be explainable and free from bias for use with AI applications. For that reason, it is crucial first to get the operational, or production data right to provide the starting point for synthetic data generation. It is also important to ensure that use cases not normally found in production data can be assembled and organised. To this end, master data management can help.

 

What is master data management (MDM)?

When we think of master data we think mostly of operational data:

MDM is a key enabler for providing a single, trusted view of business-critical information, such as customer data. Having trusted master data can help you reduce the costs of application integration, improve customer experiences and yield actionable insight from analytics.

At the crux of making master data both trustworthy and insightful is having a transparent view of it. The transparency originates from the meaning, purpose and governance policy defining the data.
Master data management defines and implements governance policies to certify that important qualities of master data, such as:

  • Origin
  • Accuracy
  • Coherence
  • Accessibility
  • Security
  • Auditability
  • Ethics 

are under business supervision and measured against business objectives.

Master data management (MDM) can help you govern your data sets to ensure a more reliable and complete representation of it when generated as synthetic data sets. Good synthetic data sets improve the ability of data science projects to yield better outcomes for forecasting and machine learning.

Use of synthetic data in retail

Let’s imagine the launch of a new product. What effect will its placement have on its sales? Which customer segments are more likely to purchase it?

Testing product introduction from a data science perspective, requires access to good, representative data en masse. And this will start with including existing customer and product data. The accuracy and visibility of this data is key to measure and remediate prior to any analytics. This is where MDM can help.

The MDM supports and secures the proper implementation of a policy for customer data, including accountabilities and criteria for completeness and quality. The retailer does not necessarily need a full 360° view of the customer but simply a view that is fit for the specific purpose: creating the synthetic data sets that corroborate a forecasting of the sales potential of the new product.

Should the real-world data lack in richness and volume to support generating data that tests more corners and decision paths, MDM can help by managing anonymous customer data sets that have higher quality.

Having aligned the data rules in the MDM with the goals of the data science or ML project, the retailer is now able to develop appropriate synthetic data sets for subsequent predictive analytics.

AI/ML is becoming a ubiquitous part of the customer experience in helping consumers make informed choices. For example, should the consumer create a collection of viewed products, then the ML algorithms can look at the product’s attributes to propose complementary products and services based on the consumer’s behavioural pattern.

 

Synthetic data in AI and machine learning

Synthetic data management is a foundational requirement for AI and machine learning (ML). ML models need to be trained. And to do that, they need data. Synthetic data can provide the needed quantities and use cases for ML. MDM helps to support non-bias by providing good data to explainable AI verification.

 

Use of synthetic data in financial services

The financial services sector has a significant number of key synthetic data management use cases. For example, banking or insurance data can contain some very sensitive personally identifiable attributes. But at the same time, financial services companies need to share information with business partners and regulators. Generating synthetic data sets can help remove personal information, also known as data masking, while preserving the essence of the complex data relationships within. In training a fraud algorithm, you don’t really need to have the name of the person involved. You will, however, need to recognise a statistical pattern that represents a suspicious activity.

When analysing historical trends, the generation of synthetic data sets that represent both actual events and the what-if scenarios is needed if the mistakes of the past are to be avoided. When looking at the future, data sets need to be created that reflect the movement from current to future trends – crucial when imagining your next product or service.

 

MDM brings governance to synthetic data in order to make outcomes explainable

MDM finds its vocation in ensuring that the original production data sets are able to yield representative and helpful synthetic data sets. MDM may, in some cases, be needed to master some elements of those synthetic data sets so that they can be curated for machine learning. While techniques such as data masking and synthetic data production (plenty of tools exist to do this) might be used to transform individual attributes, the ability to ensure an honest representation of the original sources can benefit from the data governance policies that MDM applies.

MDM improves the pertinence and explainability of synthetic data by implementing a business process to ensure that the curation of the originating information or the synthetic information is representative, coherent, of high quality and insightful. This in turn will make AI more explainable and induce less bias.

Find out how MDM enables data transparency


Master Data Management Blog by Stibo Systems logo

Darren has spent much of his career in software sales consulting, working in a variety of industries. During the last 15 years, he has specialised in information management, advising global, blue chip companies on their data governance strategies. Today, Darren provides leadership in helping Stibo Systems grow its business by demonstrating how our unique technology can help accelerate our customers’ digital transformation journeys.



← Previous Post
Next Post →