The EU's Digital Finance Agenda aims to promote a level playing field in the financial sector and address the challenges posed by digital transformation, in line with the European Commission's broader policy on digital transition. Central to this vision is the EU Digital Financial Platform, an initiative aimed at fostering innovation and creating a unified market for digital financial services.
Central to this effort is a secure environment for smooth data exchange between national supervisory authorities and financial institutions, with the aim of driving data-driven innovation and establishing a trusted data sharing system. Establishment of a data hub.
To ensure compliance with confidentiality requirements, the European Commission has decided to build a data hub using synthetic data.
JRC meticulously evaluated the data synthesis software to ensure that the new dataset becomes a valuable resource for the company while respecting confidentiality issues.
The Directorate General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) has commissioned the Joint Research Center (JRC) to assess the accuracy, anonymization and confidentiality of synthetic data generated by the provided software package. We asked them to carry out tests and checks. It is by UK-based software company Synthesize. The results show that the synthesized data successfully reproduces the main patterns of the original data, and the univariate distributions overlap well.
The composition process makes potential attacks difficult and ensures the level of confidentiality required to share sensitive information in data hubs. Overall, synthetic data provides a way for national supervisory authorities to participate in projects without making the actual data they hold accessible to third parties.
The Data Hub will be launched with a dedicated event “Digital Finance Platform – Phase II and Launch of the Data Hub” on March 21, 2024.
background
Synthetic data is artificial data that is generated to reproduce the characteristics and structure of the original data. At JRC, various teams are actively exploring the potential applications of synthetic data across multiple sectors, extending beyond finance to government data and other areas.
Exploration of synthetic data shows the potential to facilitate the use of certain public sector datasets that are not suitable as open data. By leveraging synthetic datasets, researchers and policymakers can access and analyze sensitive or restricted information without compromising individual privacy or data confidentiality.
For example, the JRC's recent activities have shown promising results in areas such as a common European data space, privacy-preserving technologies, and the use of generative AI to generate synthetic data.
These efforts focus specifically on scientific exploration of the application of synthetic data to enhance policy development, assessing the representativeness of synthetic data, and generating population replicas of disease and socio-economic variables. Such evidence is crucial to inform policy-making and ensure robust data-driven decision-making processes within the European Union, while maintaining aspects of data confidentiality.
Related Links
Digital Finance Platform – Phase II and Data Hub Launch
Europe's Data Space – Scientific Insights into Large-Scale Data Sharing and Utilization
Technology for data sharing and analysis that protects privacy
Fable: A framework for autonomous, language-driven, emotion-responsive synthetic groups