Synthetic Data

Synthetic data is AI-generated data that statistically mimics a real dataset without containing actual personal records. It is used to train and evaluate AI models when real data is scarce, sensitive, or legally restricted — particularly in healthcare and financial services.

Synthetic data generation carries its own risks: if the generator learns from biased real data, the synthetic data inherits that bias. Privacy guarantees require formal differential-privacy bounds, not just record anonymization. Regulators in healthcare and banking are still developing guidance on synthetic-data use in model validation.