Adaptive data processing system and method with dynamic optimization

A system and method for lossy precompression for data compaction using automated model monitoring and training, wherein statistical analyses of test datasets are used to determine if the probability distribution of two datasets are within a pre-determined range, and responsive to that determination new encoding and decoding algorithms may be retrained in order to produce new data sourceblocks, and pre-compression of data prior to processing and statistical analysis allows for the compaction of already compressed data into highly dense formats. The new data sourceblocks may then be processed and assigned new codewords which are compiled into an updated codebook which may be distributed back to encoding and decoding systems and devices.