data proxy
What It Means
A data proxy is substitute information you use when you can't directly measure or access the actual data you need. It's like using a shadow to estimate the height of a building when you can't measure the building itself - the proxy data gives you a reasonable approximation of what you're really trying to understand.
Why Chief AI Officers Care
Data proxies are critical for AI systems that need to make predictions about things that are difficult or impossible to measure directly, but using proxies introduces accuracy risks and potential bias. Poor proxy selection can lead to AI models that seem to work well in testing but fail in real-world applications, creating significant business and compliance risks.
Real-World Example
A credit scoring AI system uses payment history on utility bills and rent as a proxy for creditworthiness when someone has no traditional credit history. The utility payments serve as substitute data to predict how likely someone is to repay a loan, even though paying utilities isn't the same as repaying credit.
Common Confusion
People often confuse data proxies with data samples or subsets, but proxies are fundamentally different data that represents something else, while samples are just smaller portions of the same type of data you're trying to analyze.
Industry-Specific Applications
See how this term applies to healthcare, finance, manufacturing, government, tech, and insurance.
Healthcare: In healthcare, data proxies are essential when direct patient data is unavailable, restricted by privacy regulations, or...
Finance: In finance, data proxies are commonly used for risk assessment, valuation, and regulatory reporting when direct market d...
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Includes:
- 6 industry-specific applications
- Relevant regulations by sector
- Real compliance scenarios
- Implementation guidance
Technical Definitions
NISTNational Institute of Standards and Technology
"Data that are closely related to and serve in place of data that are either unobservable or immeasurable."Source: Comptroller_Office
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