May 24, 2023

Unleashing the potential of synthetic data in healthcare, retail, and telecommunications

Unleashing the potential of synthetic data in healthcare, retail, and telecommunications

The rapid adoption of AI/ML in industries 

The rapid adoption of artificial intelligence (AI) and machine learning (ML) in recent years has transformed industries. Organizations across different sectors have recognized the high potential of AI and ML technologies to drive innovation, enhance decision-making processes, and improve operational efficiencies in a data-driven manner. The progress in these areas has opened doors to remarkable breakthroughs in domains such as natural language processing, computer vision, predictive analytics, and autonomous systems. The transformative influence of AI and ML is extending beyond the confines of specific industries, driving substantial advancements and fundamentally reshaping business operations and value delivery.

However, as AI/ML adoption continues to scale, the accessibility, quality, and balance of data required to enable the continuous adoption of AI/ ML in organizations have become pivotal factors in developing strong AI/ML  systems. This is where synthetic data comes into play.

The impact of synthetic data on AI/ML adoption

The impact of synthetic data on AI/ML adoption has been significant, providing a valuable solution to address the challenges of data access, diversity, and privacy concerns. Synthetic data generation techniques have emerged as a powerful tool to augment real datasets or even replace them in certain cases. By generating data that is representative of real-world data, AI/ML models can be trained on larger and more diverse datasets, enabling improved accuracy and performance. The popularity of data generation has skyrocketed in recent years, providing a practical solution to the issue of data access, data quality, and enhancing ML implementations. Furthermore, a Gartner report estimates that synthetic data is expected to account for 60% of all data used in the development of AI by 2024.

Data generation techniques have proven to be versatile in generating datasets that resemble real-world data across different data types. Relational and tabular data is generated to represent the structure, distribution, and statistical properties of existing datasets, enabling efficient training of AI/ML models for tasks such as classification, regression, and anomaly detection. 

With unstructured text data, synthetic data can be used to generate realistic text samples. For time series data, synthetic data can replicate temporal patterns and relationships, facilitating the training of AI/ML models for tasks such as forecasting, anomaly detection, and trend analysis. 

Additionally, regarding image data, synthetic data can be generated to simulate realistic images, augmenting existing datasets and enabling the training of computer vision models for tasks like object recognition, image segmentation, and image synthesis. The flexibility of synthetic data generation techniques makes them invaluable for AI/ML adoption across diverse data types, enhancing the availability and diversity of training data for improved model performance and generalization.

Synthetic data also addresses privacy concerns by allowing organizations to create representative datasets without compromising sensitive information. Moreover, synthetic data enables the creation of challenging edge cases and rare events, providing a more comprehensive training environment for AI/ML models. This expands access to high-quality, diverse, and privacy-preserving data and accelerates the development and deployment of AI/ML solutions across industries such as healthcare, retail, and telecommunications, driving their adoption and unlocking the full potential of these technologies.

The industries that are adopting synthetic data 

In industries such as healthcare, AI and ML algorithms are being used to analyze vast amounts of medical data, enabling faster and more accurate diagnoses, personalized treatment plans, and improved patient outcomes. Recently, the Royal Society called for public sector institutions, including the NHS, to lead the way in piloting Privacy Enhancing Technologies (PETs) that could unlock ‘lifesaving’ data without compromising privacy. The use of synthetic data poses privacy and security benefits through the reduction of the risks inherent to original patient data use, and this can build public trust through responsible AI use. Synthetic versions of healthcare datasets also have the benefit of being able to address the issue of data scarcity and imbalance when training healthcare ML models.

In the retail industry, AI-powered recommendation systems, demand forecasting models, and chatbots have transformed customer experiences, enabling personalized shopping recommendations, optimizing inventory management, and delivering efficient customer service. Synthetic datasets can be generated to capture the diversity and complexity of customer preferences, behaviors, and purchasing patterns, allowing retailers can train and optimize these AI systems with realistic data. 

In telecommunications, AI and ML algorithms are leveraged to optimize network performance, detect anomalies, predict customer behavior, and enhance overall service quality. The increasing availability of big data, advancements in computing power, and the development of sophisticated algorithms have fueled the rapid adoption of AI and ML, driving significant advancements and reshaping industries. The use of synthetic data can enable telecom companies to simulate diverse network scenarios, predict customer behavior, and identify potential issues in a privacy-compliant manner, without relying solely on historic data.

Industry breakdown:

Healthcare & pharmaceuticals industry

The adoption and use of synthetic data in healthcare and pharmaceuticals continue to gain traction as an emerging solution to the increasing need for privacy and confidentiality within medical research. Laws regarding the privacy of patient data, such as the Health Insurance Portability and Accountability Act of 1996, passed by the U.S. Congress, were enacted to regulate the use of personally identifiable information (PII) maintained by the healthcare and health insurance industries and protect them from fraud and theft. Synthetic data’s omission of personally identifiable information (PII) makes it an attractive proposition for healthcare and pharmaceutical institutions, particularly in medical research, as it enables the sharing of valuable information without compromising patient privacy. 

Examples of synthetic data use cases in healthcare and pharmaceuticals include:

  • Synthetic data for epidemiology/ public health research: Maintaining compliance with data privacy regulations is crucial in the field of epidemiology and public health research. Synthetic data offers a solution to privacy concerns by providing researchers with a means to examine disease prevalence, population health trends, and risk factors while safeguarding sensitive information. By generating synthetic data sets that resemble real-world population characteristics, researchers can conduct thorough analyses and distribute their findings without undermining privacy regulations.
  • Synthetic data for hypothesis and algorithm testing: Synthetic data can be valuable for testing hypotheses, evaluating methods, and developing algorithms in healthcare and pharmaceutical research. In certain cases, real-world datasets may be imbalanced, meaning they have an unequal distribution of classes or characteristics. Synthetic data generation techniques can rebalance and upsample the dataset, creating synthetic instances of minority classes or underrepresented characteristics. This enables more accurate testing and validation of algorithms, ensuring robustness and generalizability.
  • Education and training: There’s strong potential for the use of synthetic data for education and training purposes in the healthcare and pharmaceutical industries. Synthetic data can be used for training initiatives for healthcare professionals, such as medical students, residents, or pharmaceutical researchers. By providing high-quality synthetic data sets, doctors and professors can replicate real-world scenarios. This allows students to practice their skills, make clinical decisions, and gain hands-on experience in a safe and controlled environment. For example, Oregon Health & Science University used synthetic clinical cardiovascular data to teach students robust risk prediction using ML techniques. 

Retail industry 

In the retail industry, the adoption of data-driven practices has become increasingly important for companies to maintain a competitive advantage. Retailers have access to vast amounts of customer data, transaction records, inventory information, and more. Synthetic data has the potential to play a crucial role in the retail industry by providing companies with valuable insights and enabling them to innovate in a data-driven way. 

Example use cases of synthetic data in the retail industry:

  • Data sharing between teams within a retail organization: In a retail organization, different departments such as marketing, sales, and customer service often work with their own datasets. Sharing real customer data across these teams can raise privacy concerns and legal restrictions in certain regions. Synthetic data comes into play by providing a privacy-preserving alternative. By generating synthetic datasets that maintain the statistical properties of the original data, teams can share information without compromising sensitive customer information. This safely-shared knowledge empowers cross-functional teams to make informed decisions, test hypotheses, and experiment with strategies without relying on sensitive and real customer data. This enables collaboration, data-driven decision-making, and cross-functional insights that can result in valuable insights and optimized sales strategies that drive growth.
  • Predictive sales: Accurate sales forecasting is crucial for retailers to optimize stock and inventory levels, plan marketing campaigns, and allocate resources effectively. Synthetic data can help with predictive sales modeling by creating large-scale datasets that encompass historical sales data, customer demographics, product attributes, and other external factors. Retailers can use synthetic datasets to train predictive models, test different forecasting algorithms, and assess the accuracy of their sales predictions. This empowers retailers to make informed decisions and improve the efficiency of their sales processes.
  • Customer churn: The rate of customers who stop purchasing a business’ products is a significant challenge in the retail industry. Identifying the factors that contribute to churn and mitigating those threats before they materialize is key to retaining customers. Synthetic data can help by creating datasets that are representative of customer behavior, interactions, and purchase patterns. By generating synthetic data, retailers can upsample churn scenarios, identify key indicators of customer attrition, and develop predictive models to forecast churn probability.

Telecommunications industry 

The telecommunications industry is at the forefront of the digital revolution, providing connectivity and communication services to billions of people worldwide. With the exponential growth of data and the increasing demand for personalized experiences, telecom companies are exploring innovative ways to leverage data-driven insights. Synthetic data has emerged as a key enabler in this pursuit, with the potential to help telecom companies overcome challenges such as data access, sharing, and privacy in an age where the responsible use of data is vital.

Example use cases of synthetic data in the telecommunications industry:

  • Customer analytics to improve customer experience: Synthetic data can help derive meaningful insights from customer data without compromising privacy. By generating synthetic datasets that represent customer profiles, companies can perform advanced analytics and predictive modeling. This allows them to optimize marketing campaigns and recommendations, to improve customer experiences based on synthetic versions of the data.
  • Data monetization: Telecom companies collect vast amounts of customer data, including call records, browsing behavior, and location data. However, privacy regulations and agreements can restrict the direct use of this data for marketing purposes. Synthetic data offers a solution by generating artificial datasets that are representative of real customer data while preserving individual privacy. By monetizing access to these synthetic datasets, telecom companies can offer third parties valuable insights into customer segments, preferences, and trends.
  • Network optimization: Anomaly detection algorithms play a crucial role in identifying network defects. However, their effectiveness is often hindered by data quality, with high-quality data sometimes being scarce. Synthetic data offers a solution by automatically categorizing various types of anomalies and generating synthetic data specifically tailored to train more accurate predictive models. By leveraging synthetic data, anomaly detection algorithms can overcome the limitations posed by data scarcity and improve their ability to identify network anomalies effectively.


Nevertheless, the adoption of synthetic data has the potential to revolutionize industries such as healthcare, retail, and telecommunications by addressing challenges in AI/ML adoption, including data accessibility, quality, diversity, and privacy concerns. Synthetic data generation can enable safe data sharing while preserving privacy and can improve predictive models and decision-making processes. The ability for organizations to unlock new insights through data generation can fuel data-driven innovation, and reshape business operations, enabling businesses to continue advancing.