Research: Domain-Specific Enhancements

Implementation Status: COMPLETE (v0.3.0)

This research document has been fully implemented in v0.3.0. See:

• Industry-Specific Features Documentation
• CHANGELOG.md for detailed feature list

Key implementations:

• Manufacturing: BOM, routings, work centers, production variances
• Retail: POS transactions, shrinkage, loss prevention
• Healthcare: Revenue cycle, ICD-10/CPT/DRG coding, payer mix
• Technology: License/subscription revenue, R&D capitalization
• Financial Services: Loan origination, trading, regulatory frameworks
• Professional Services: Time & billing, trust accounting
• Industry-specific anomaly patterns for each sector
• Industry-specific ML benchmarks

Current State Analysis

Existing Industry Support

Current Strengths

1. Banking module: Comprehensive KYC/AML with fraud typologies
2. Industry presets: 5 industry configurations available
3. Seasonality profiles: 10 industry-specific patterns
4. Standards support: IFRS, US GAAP, ISA, SOX frameworks

Current Gaps

1. Shallow industry modeling: Generic patterns across industries
2. Limited regulatory specificity: One-size-fits-all compliance
3. Missing vertical-specific transactions: Generic document flows
4. No industry-specific anomalies: Same fraud patterns everywhere
5. Limited terminology: Generic naming regardless of industry

Industry-Specific Enhancement Recommendations

1. Manufacturing Industry

1.1 Enhanced Transaction Types

manufacturing:
  transaction_types:
    # Production-specific
    production:
      - work_order_issuance
      - material_requisition
      - labor_booking
      - overhead_absorption
      - scrap_reporting
      - rework_order
      - production_variance

    # Inventory movements
    inventory:
      - raw_material_receipt
      - wip_transfer
      - finished_goods_transfer
      - consignment_movement
      - subcontractor_shipment
      - cycle_count_adjustment
      - physical_inventory_adjustment

    # Cost accounting
    costing:
      - standard_cost_revaluation
      - purchase_price_variance
      - production_variance_allocation
      - overhead_rate_adjustment
      - interplant_transfer_pricing

  # Manufacturing-specific master data
  master_data:
    bill_of_materials:
      levels: 3-7
      components_per_level: 2-15
      yield_rates: 0.95-0.99
      scrap_factors: 0.01-0.05

    routings:
      operations: 3-12
      work_centers: 5-50
      labor_rates: by_skill_level
      machine_rates: by_equipment_type

    production_orders:
      types: [discrete, repetitive, process]
      statuses: [planned, released, confirmed, completed]

1.2 Manufacturing Anomalies

manufacturing_anomalies:
  production:
    - type: yield_manipulation
      description: "Inflating yield to hide scrap"
      indicators: [abnormal_yield, missing_scrap_entries]

    - type: labor_misallocation
      description: "Charging labor to wrong orders"
      indicators: [unusual_labor_distribution, overtime_patterns]

    - type: phantom_production
      description: "Recording production that didn't occur"
      indicators: [no_material_consumption, missing_quality_records]

  inventory:
    - type: obsolete_inventory_concealment
      description: "Failing to write down obsolete stock"
      indicators: [no_movement_items, aging_without_provision]

    - type: consignment_manipulation
      description: "Recording consigned goods as owned"
      indicators: [unusual_consignment_patterns, ownership_disputes]

  costing:
    - type: standard_cost_manipulation
      description: "Setting unrealistic standards"
      indicators: [persistent_favorable_variances, standard_changes]

    - type: overhead_misallocation
      description: "Allocating overhead to wrong products"
      indicators: [margin_anomalies, allocation_base_changes]

2. Retail Industry

2.1 Enhanced Transaction Types

retail:
  transaction_types:
    # Point of Sale
    pos:
      - cash_sale
      - credit_card_sale
      - debit_sale
      - gift_card_sale
      - layaway_transaction
      - special_order
      - rain_check

    # Returns and adjustments
    returns:
      - customer_return
      - exchange
      - price_adjustment
      - markdown
      - damage_writeoff
      - vendor_return

    # Inventory
    inventory:
      - receiving
      - transfer_in
      - transfer_out
      - cycle_count
      - shrinkage_adjustment
      - donation
      - disposal

    # Promotions
    promotions:
      - coupon_redemption
      - loyalty_redemption
      - bundle_discount
      - flash_sale
      - clearance_markdown

  # Retail-specific metrics
  metrics:
    same_store_sales: by_period
    basket_size: average_and_distribution
    conversion_rate: by_store_type
    shrinkage_rate: by_category
    markdown_percentage: by_season
    inventory_turn: by_category

2.2 Retail Anomalies

retail_anomalies:
  pos_fraud:
    - type: sweethearting
      description: "Employee gives free/discounted items to friends"
      indicators: [high_void_rate, specific_cashier_patterns]

    - type: skimming
      description: "Not recording cash sales"
      indicators: [cash_short, transaction_gaps]

    - type: refund_fraud
      description: "Fraudulent refunds to personal cards"
      indicators: [refund_patterns, card_number_reuse]

  inventory_fraud:
    - type: receiving_fraud
      description: "Collusion with vendors on short shipments"
      indicators: [variance_patterns, vendor_concentration]

    - type: transfer_fraud
      description: "Fake transfers to cover theft"
      indicators: [transfer_without_receipt, location_patterns]

  promotional_abuse:
    - type: coupon_fraud
      description: "Applying coupons without customer purchase"
      indicators: [high_coupon_rate, timing_patterns]

    - type: employee_discount_abuse
      description: "Using employee discount for non-employees"
      indicators: [discount_volume, transaction_timing]

3. Healthcare Industry

3.1 Enhanced Transaction Types

healthcare:
  transaction_types:
    # Revenue cycle
    revenue:
      - patient_registration
      - charge_capture
      - claim_submission
      - payment_posting
      - denial_management
      - patient_billing
      - collection_activity

    # Clinical operations
    clinical:
      - supply_consumption
      - pharmacy_dispensing
      - procedure_coding
      - diagnosis_coding
      - medical_record_documentation

    # Payer transactions
    payer:
      - contract_payment
      - capitation_payment
      - risk_adjustment
      - quality_bonus
      - value_based_payment

  # Healthcare-specific elements
  elements:
    coding:
      icd10: diagnostic_codes
      cpt: procedure_codes
      drg: diagnosis_related_groups
      hcpcs: healthcare_common_procedure

    payers:
      types: [medicare, medicaid, commercial, self_pay]
      mix_distribution: configurable
      contract_terms: by_payer

    compliance:
      hipaa: true
      stark_law: true
      anti_kickback: true
      false_claims_act: true

3.2 Healthcare Anomalies

healthcare_anomalies:
  billing_fraud:
    - type: upcoding
      description: "Billing for more expensive service than provided"
      indicators: [code_distribution_shift, complexity_increase]

    - type: unbundling
      description: "Billing separately for bundled services"
      indicators: [modifier_patterns, procedure_combinations]

    - type: phantom_billing
      description: "Billing for services not rendered"
      indicators: [impossible_combinations, deceased_patient_billing]

    - type: duplicate_billing
      description: "Billing multiple times for same service"
      indicators: [same_day_duplicates, claim_resubmission_patterns]

  kickback_schemes:
    - type: physician_referral_kickback
      description: "Payments for patient referrals"
      indicators: [referral_concentration, payment_timing]

    - type: medical_director_fraud
      description: "Sham medical director agreements"
      indicators: [no_services_rendered, excessive_compensation]

  compliance_violations:
    - type: hipaa_violation
      description: "Unauthorized access to patient records"
      indicators: [access_patterns, audit_log_anomalies]

    - type: credential_fraud
      description: "Using credentials of another provider"
      indicators: [impossible_geography, timing_conflicts]

4. Technology Industry

4.1 Enhanced Transaction Types

technology:
  transaction_types:
    # Revenue recognition (ASC 606)
    revenue:
      - license_revenue
      - subscription_revenue
      - professional_services
      - maintenance_revenue
      - usage_based_revenue
      - milestone_based_revenue

    # Software development
    development:
      - r_and_d_expense
      - capitalized_software
      - amortization
      - impairment_testing

    # Cloud operations
    cloud:
      - hosting_costs
      - bandwidth_costs
      - storage_costs
      - compute_costs
      - third_party_services

    # Sales and marketing
    sales:
      - commission_expense
      - deferred_commission
      - customer_acquisition_cost
      - marketing_program_expense

  # Tech-specific accounting
  accounting:
    revenue_recognition:
      multiple_element_arrangements: true
      variable_consideration: true
      contract_modifications: true

    software_development:
      capitalization_criteria: true
      useful_life_determination: true
      impairment_testing: annual

    stock_compensation:
      option_valuation: black_scholes
      rsu_accounting: true
      performance_units: true

4.2 Technology Anomalies

technology_anomalies:
  revenue_fraud:
    - type: premature_license_recognition
      description: "Recognizing license revenue before delivery criteria met"
      indicators: [quarter_end_concentration, delivery_delays]

    - type: side_letter_abuse
      description: "Hidden terms that negate revenue recognition"
      indicators: [unusual_contract_terms, customer_complaints]

    - type: channel_stuffing
      description: "Forcing product on resellers at period end"
      indicators: [reseller_inventory_buildup, returns_next_quarter]

  capitalization_fraud:
    - type: improper_capitalization
      description: "Capitalizing expenses that should be expensed"
      indicators: [r_and_d_ratio_changes, asset_growth]

    - type: useful_life_manipulation
      description: "Extending useful life to reduce amortization"
      indicators: [useful_life_changes, peer_comparison]

  stock_compensation:
    - type: options_backdating
      description: "Selecting favorable grant dates retroactively"
      indicators: [grant_date_patterns, exercise_price_analysis]

    - type: vesting_manipulation
      description: "Accelerating vesting to manage earnings"
      indicators: [vesting_schedule_changes, departure_timing]

5. Financial Services Industry

5.1 Enhanced Transaction Types

financial_services:
  transaction_types:
    # Banking operations
    banking:
      - loan_origination
      - loan_disbursement
      - loan_payment
      - interest_accrual
      - fee_income
      - deposit_transaction
      - wire_transfer
      - ach_transaction

    # Investment operations
    investments:
      - trade_execution
      - trade_settlement
      - dividend_receipt
      - interest_receipt
      - mark_to_market
      - realized_gain_loss
      - unrealized_gain_loss

    # Insurance operations
    insurance:
      - premium_collection
      - claim_payment
      - reserve_adjustment
      - reinsurance_transaction
      - commission_payment
      - policy_acquisition_cost

    # Asset management
    asset_management:
      - management_fee
      - performance_fee
      - distribution
      - capital_call
      - redemption

  # Regulatory requirements
  regulatory:
    capital_requirements:
      basel_iii: true
      leverage_ratio: true
      liquidity_coverage: true

    reporting:
      call_reports: true
      form_10k_10q: true
      form_13f: true
      sar_filing: true

5.2 Financial Services Anomalies

financial_services_anomalies:
  lending_fraud:
    - type: loan_fraud
      description: "Falsified loan applications"
      indicators: [documentation_inconsistencies, verification_failures]

    - type: appraisal_fraud
      description: "Inflated property valuations"
      indicators: [appraisal_variances, appraiser_concentration]

    - type: straw_borrower
      description: "Using nominee to obtain loans"
      indicators: [relationship_patterns, fund_flow_analysis]

  trading_fraud:
    - type: wash_trading
      description: "Buying and selling same security to inflate volume"
      indicators: [self_trades, volume_patterns]

    - type: front_running
      description: "Trading ahead of customer orders"
      indicators: [timing_analysis, profitability_patterns]

    - type: churning
      description: "Excessive trading to generate commissions"
      indicators: [turnover_ratio, commission_patterns]

  insurance_fraud:
    - type: premium_theft
      description: "Agent pocketing premiums"
      indicators: [lapsed_policies, customer_complaints]

    - type: claims_fraud
      description: "Fraudulent or inflated claims"
      indicators: [claim_patterns, adjuster_analysis]

    - type: reserve_manipulation
      description: "Understating claim reserves"
      indicators: [reserve_development, adequacy_analysis]

6. Professional Services

6.1 Enhanced Transaction Types

professional_services:
  transaction_types:
    # Time and billing
    billing:
      - time_entry
      - expense_entry
      - invoice_generation
      - write_off_adjustment
      - realization_adjustment
      - wip_adjustment

    # Engagement management
    engagement:
      - engagement_setup
      - budget_allocation
      - milestone_billing
      - retainer_application
      - contingency_fee

    # Resource management
    resource:
      - staff_allocation
      - contractor_engagement
      - subcontractor_payment
      - expert_fee

    # Client accounting
    client:
      - trust_deposit
      - trust_withdrawal
      - cost_advance
      - client_reimbursement

  # Professional-specific metrics
  metrics:
    utilization_rate: by_level
    realization_rate: by_practice
    collection_rate: by_client
    leverage_ratio: staff_to_partner
    revenue_per_professional: by_level

6.2 Professional Services Anomalies

professional_services_anomalies:
  billing_fraud:
    - type: inflated_hours
      description: "Billing for time not worked"
      indicators: [impossible_hours, pattern_analysis]

    - type: phantom_work
      description: "Billing for work never performed"
      indicators: [no_work_product, client_complaints]

    - type: duplicate_billing
      description: "Billing multiple clients for same time"
      indicators: [time_overlap, total_hours_analysis]

  expense_fraud:
    - type: personal_expense_billing
      description: "Charging personal expenses to clients"
      indicators: [expense_patterns, vendor_analysis]

    - type: markup_abuse
      description: "Excessive markups on pass-through costs"
      indicators: [markup_comparison, cost_analysis]

  trust_account_fraud:
    - type: commingling
      description: "Mixing trust and operating funds"
      indicators: [transfer_patterns, reconciliation_issues]

    - type: misappropriation
      description: "Using client funds for personal use"
      indicators: [unauthorized_withdrawals, shortages]

7. Real Estate Industry

7.1 Enhanced Transaction Types

real_estate:
  transaction_types:
    # Property management
    property:
      - rent_collection
      - cam_charges
      - security_deposit
      - lease_payment
      - tenant_improvement
      - property_tax
      - insurance_expense

    # Development
    development:
      - land_acquisition
      - construction_draw
      - development_fee
      - capitalized_interest
      - soft_cost
      - hard_cost

    # Investment
    investment:
      - property_acquisition
      - property_disposition
      - depreciation
      - impairment
      - fair_value_adjustment
      - debt_service

    # REIT-specific
    reit:
      - ffo_calculation
      - dividend_distribution
      - taxable_income
      - section_1031_exchange

7.2 Real Estate Anomalies

real_estate_anomalies:
  property_management:
    - type: rent_skimming
      description: "Not recording cash rent payments"
      indicators: [occupancy_vs_revenue, cash_deposits]

    - type: kickback_maintenance
      description: "Receiving kickbacks from contractors"
      indicators: [contractor_concentration, pricing_analysis]

  development:
    - type: cost_inflation
      description: "Inflating development costs"
      indicators: [cost_per_unit_comparison, change_order_patterns]

    - type: capitalization_abuse
      description: "Capitalizing operating expenses"
      indicators: [capitalization_ratio, expense_classification]

  valuation:
    - type: appraisal_manipulation
      description: "Influencing property appraisals"
      indicators: [appraisal_vs_sale_price, appraiser_relationships]

    - type: impairment_avoidance
      description: "Failing to record impairments"
      indicators: [occupancy_decline, market_comparisons]

8. Industry-Specific Configuration

8.1 Unified Industry Configuration

# Master industry configuration schema
industry_configuration:
  industry: manufacturing  # or retail, healthcare, etc.

  # Industry-specific settings
  settings:
    transaction_types:
      enabled: [production, inventory, costing]
      weights:
        production_orders: 0.30
        inventory_movements: 0.40
        cost_adjustments: 0.30

    master_data:
      bill_of_materials: true
      routings: true
      work_centers: true
      production_resources: true

    anomaly_injection:
      industry_specific: true
      generic: true
      industry_weight: 0.60

    terminology:
      use_industry_terms: true
      document_naming: industry_standard
      account_descriptions: industry_specific

    seasonality:
      profile: manufacturing
      custom_events:
        - name: plant_shutdown
          month: 7
          duration_weeks: 2
          activity_multiplier: 0.10

    regulatory:
      frameworks:
        - environmental: epa
        - safety: osha
        - quality: iso_9001

  # Cross-industry settings (inherit from base)
  inherit:
    - accounting_standards
    - audit_standards
    - control_framework

8.2 Industry Presets Enhancement

presets:
  manufacturing_automotive:
    base: manufacturing
    customizations:
      bom_depth: 7
      just_in_time: true
      quality_framework: iatf_16949
      supplier_tiers: 3
      defect_rates: very_low

  retail_grocery:
    base: retail
    customizations:
      perishable_inventory: true
      high_volume_low_margin: true
      shrinkage_focus: true
      vendor_managed_inventory: true

  healthcare_hospital:
    base: healthcare
    customizations:
      inpatient: true
      outpatient: true
      emergency_services: true
      ancillary_services: true
      case_mix_complexity: high

  technology_saas:
    base: technology
    customizations:
      subscription_revenue: primary
      professional_services: secondary
      monthly_recurring_revenue: true
      churn_modeling: true

  financial_services_bank:
    base: financial_services
    customizations:
      banking_charter: commercial
      deposit_taking: true
      lending: true
      capital_markets: limited

9. Implementation Priority

10. Terminology and Naming

industry_terminology:
  manufacturing:
    document_types:
      purchase_order: "Production Purchase Order"
      invoice: "Vendor Invoice"
      receipt: "Goods Receipt / Material Document"

    accounts:
      wip: "Work in Process"
      fg: "Finished Goods Inventory"
      rm: "Raw Materials Inventory"

    transactions:
      production: "Manufacturing Order Settlement"
      variance: "Production Variance Posting"

  healthcare:
    document_types:
      invoice: "Claim"
      payment: "Remittance Advice"
      receipt: "Patient Payment"

    accounts:
      ar: "Patient Accounts Receivable"
      revenue: "Net Patient Service Revenue"
      contractual: "Contractual Allowance"

    transactions:
      billing: "Charge Capture"
      collection: "Payment Posting"

  # Similar for other industries...

Summary

This research document series provides a comprehensive analysis of improvement opportunities for the SyntheticData system. Key themes across all documents:

1. Depth over breadth: Enhance existing features rather than adding new surface-level capabilities
2. Correlation modeling: Move from independent generation to correlated, interconnected data
3. Temporal realism: Add dynamic behavior that evolves over time
4. Domain authenticity: Use real industry terminology, patterns, and regulations
5. Detection-aware design: Generate data that enables meaningful ML training and evaluation

The recommended implementation approach is phased, starting with high-impact, lower-complexity enhancements and building toward more sophisticated modeling over time.

End of Research Document Series

Total documents: 8 Research conducted: January 2026 System version analyzed: 0.2.3