Synthetic augmentation is increasingly used to mitigate data scarcity in financial machine learning, yet its statistical role remains poorly understood. We formalize synthetic augmentation as a modification of the effective training distribution and show that it induces a structural bias--variance trade-off: while additional samples may reduce estimation error, they may also shift the population objective whenever the synthetic distribution deviates from regions relevant under evaluation. To isolate informational gains from mechanical sample-size effects, we introduce a size-matched null augmentation and a finite-sample, non-parametric block permutation test that remains valid under weak temporal dependence. We evaluate this framework in both controlled Markov-switching environments and real financial datasets, including high-frequency option trade data and a daily equity panel. Across generators spanning bootstrap, copula-based models, variational autoencoders, diffusion models, and TimeGAN, we vary augmentation ratio, model capacity, task type, regime rarity, and signal-to-noise. We show that synthetic augmentation is beneficial only in variance-dominant regimes, such as persistent volatility forecasting-while it deteriorates performance in bias-dominant settings, including near-efficient directional prediction. Rare-regime targeting can improve domain-specific metrics but may conflict with unconditional permutation inference. Our results provide a structural perspective on when synthetic data improves financial learning performance and when it induces persistent distributional distortion.

Supervised detection of network attacks has always been a critical part of network intrusion detection systems (NIDS). Nowadays, in a pivotal time for artificial intelligence (AI), with even more sophisticated attacks that utilize advanced techniques, such as generative artificial intelligence (GenAI) and reinforcement learning, it has become a vital component if we wish to protect our personal data, which are scattered across the web. In this paper, we address two tasks, in the first unified multi-modal NIDS dataset, which incorporates flow-level data, packet payload information and temporal contextual features, from the reprocessed CIC-IDS-2017, CIC-IoT-2023, UNSW-NB15 and CIC-DDoS-2019, with the same feature space. In the first task we use machine learning (ML) algorithms, with stratified cross validation, in order to prevent network attacks, with stability and reliability. In the second task we use adversarial learning algorithms to generate synthetic data, compare them with the real ones and evaluate their fidelity, utility and privacy using the SDV framework, f-divergences, distinguishability and non-parametric statistical tests. The findings provide stable ML models for intrusion detection and generative models with high fidelity and utility, by combining the Synthetic Data Vault framework, the TRTS and TSTR tests, with non-parametric statistical tests and f-divergence measures.

Imbalanced datasets pose a difficulty in fraud detection, as classifiers are often biased toward the majority class and perform poorly on rare fraudulent transactions. Synthetic data generation is therefore commonly used to mitigate this problem. In this work, we propose the Clustered Embedding Diffusion-Transformer (EmDT), a diffusion model designed to generate fraudulent samples. Our key innovation is to leverage UMAP clustering to identify distinct fraudulent patterns, and train a Transformer denoising network with sinusoidal positional embeddings to capture feature relationships throughout the diffusion process. Once the synthetic data has been generated, we employ a standard decision-tree-based classifier (e.g., XGBoost) for classification, as this type of model remains better suited to tabular datasets. Experiments on a credit card fraud detection dataset demonstrate that EmDT significantly improves downstream classification performance compared to existing oversampling and generative methods, while maintaining comparable privacy protection and preserving feature correlations present in the original data.

A.4 EstimatingparameterswhenY(t)isunavailable New parameter estimators that leverage only the available data need to be derived whenY(t) is unavailable. The derivation goes as follows: first, we eliminateY(t) from the model equations. The squared error of the estimated parameters are shown in Figure 1. First, we estimated the parameters separately for each individual. Second, we performed statistical analysis to find associations between the estimated parameters and the demographic variables.

The UN estimates 2-5% of global GDP or $0.8 - $2.0 trillion dollars are laundered

The problem of model collapse has presented new challenges in iterative training of generative models, where such training with synthetic data leads to an overall degradation of performance. This paper looks at the problem from a statistical viewpoint, illustrating that one can actually hope for improvement when models are trained on data contaminated with synthetic samples, as long as there is some amount of fresh information from the true target distribution. In particular, we consider iterative training on samples sourced from a mixture of the true target and synthetic distributions. We analyze the entire iterative evolution in a next-token prediction language model, capturing how the interplay between the mixture weights and the sample size controls the overall long-term performance. With non-trivial mixture weight of the true distribution, even if it decays over time, simply training the model in a contamination-agnostic manner with appropriate sample sizes can avoid collapse and even recover the true target distribution under certain conditions. Simulation studies support our findings and also show that such behavior is more general for other classes of models.