Explore Hidden Trends and Benefits of Alternative Data Market

Dealing with various investment and financial data is a difficult task, requiring reliable and easily available management resources. This can be resolved by deploying alternative data sets that largely span various market sectors such as finance, retail, healthcare, real estate, and manufacturing. The advancement of alternative data is a big relief for investment leaders, providing operational ease, and valuable insights. The beneficiary in front of alternative data is not a mystery anymore, which further redefines the secure path for investors and financial operations.

Moreover, as per the alternative data market report, the revenue is expected to reach USD 135.72 billion by 2030 at a CAGR of 63.4%. This growth is supported by the abundant accessibility of the internet, rising focus on ESG data, and growing usage in the investment and finance sector. Additionally, financial institutions, particularly hedge funds and investment firms, have been at the forefront of using alternative data to gain early market insights and better predict consumer trends. The increased demand for data-driven decision-making and technological advancements are key drivers behind this growth. According to the 2023 State of Alternative Credit Data Report, 62% of financial institutions utilize alternative data to enhance risk profiling and improve their credit decision-making processes.

Interested in learning more about the Alternative Data Market? Visit here for detailed insights: https://www.grandviewresearch.com/industry-analysis/alternative-data-market

Which Industries Preferring Alterative Data Resources?

Considering the beneficiary aspect of alternative data, the Banking, Financial Services, and Insurance (BFSI) industry is at the forefront of deploying alternative data options for the detection and prevention of potential frauds. Fraudulent activities such as digital identity theft, unintended financial threats, and false transactions lead to constraints. These can be significantly resolved by mapping geolocation information, device patterns and data analytics through alternative data resources. This can be performed in real-time dynamics to help financial firms track unusual activities that might be missed by traditional monitoring systems. These trends drive the market stakes and contribute to its demand.

In addition, the retail industry is enhancing alternative data usage and supporting market growth, substantially. The expanding space of E-commerce services is supporting the adoption of alternative data on various online platforms as it serves as a source for consumer behavior analysis for retailors. In 2023, the survey of Harvard Business Review 2023 showed, that around 62% of retailers implemented omnichannel strategies such as click-and-collect, online-to-offline (O2O) marketing, and integrated customer service systems to enhance their sales. The personalized recommendations and pricing into e-commerce strategies provided by alternative data sets are crucial for improving consumer experience and elevating the retailor’s revenue, further driving the market growth.

Latest Trends: Boosting Opportunities for Alternative Data Market

 Growing Adoption of Artificial Intelligence (AI) and Machine Learning (ML):
AI and ML are reshaping the dynamics and becoming a boon for the alternative data market as it fastens processing and filtering out valuable insights from large datasets, improving predictive analytics and giving companies a more accurate understanding of market trends. These technologies analyze unstructured data from social media posts, customer reviews, and news articles, allowing businesses to predict consumer behavior and identify market opportunities more accurately.

 Rising Demand in the ESG Sector:
Companies and investors are inclined towards Environmental, Social, and Governance (ESG) performance. The role of the alternative data market in the ESG sector is to serve insight into performance and predict a company’s impact on the environment, social activities and governance practices. This data can perform social sentiment analysis for the work environment and employee satisfaction through digital platforms. As more investors prioritize sustainability and ethical business practices, the demand for ESG-related alternative data is expected to increase.

 Increasing Authorization in Non-Financial Sectors:
The non-financial sector is catching up with the use of alternative data, increasing their demand in the market. Retailers use it to improve supply chains, track competitor prices, and understand customer needs. In healthcare, alternative data from wearable devices improves patient care and clinical operations. Moreover, traffic data and geolocation analytics to identify investment opportunities in real estate are effectively fulfilled by alternative data resources, helping them to stay competitive with real-time information on trends and behavior.

 Growing Need for Data Privacy:
As the alternative data market grows, concerns about privacy and ethics are increasing. Collecting data from unconventional sources must follow strict privacy laws and ethical guidelines. Governments are tightening regulations, and businesses must adopt transparent practices to stay compliant. Ethical use of data, like avoiding bias, is important to maintaining trust. Companies must focus on data security and ensure responsible use of alternative data.

Recent Strategic Initiatives: Expanding Alternative Data Market

• In March 2024, Euroclear partnered with iCapital to provide improved access to a broader range of alternative investments such as private equity, credit, real estate, infrastructure, and hedge funds. This partnership will enhance Euroclear’a offerings in the market.
• In January 2024, Tokyo-based Quick Corp. joined forces with Toshiba Data Corporation to establish an alternative data business. Through this partnership, QUICK will analyze purchase data from smart receipts generated by the Toshiba Group and provide offerings to investors using the data platform.

Alternative Data Market Has More to Offer…

In the coming years, the alternative data market is likely to span each sector by enabling AI and ML approaches to offer businesses real-time insights into market dynamics. Moreover, the high prioritization of alternative data resources by various industries is expected to sustain its top-notch position in the market.

A free sample copy is available upon request for detailed information regarding the Alternative Data Market.