Alternative data Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028 Segmented by Data Type (Web and Social Media Data, Satellite and Geolocation Data, Financial and Transaction Data, Consumer Behavior Data, Healthcare and Life Sciences, Others), By Delivery Model (Subscription-Based, Pay-Per-Use or Pay-Per-Access and Data as a Service (DaaS)), By End-User Industry (
Published Date: November - 2024 | Publisher: MIR | No of Pages: 320 | Industry: ICT | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationAlternative data Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028 Segmented by Data Type (Web and Social Media Data, Satellite and Geolocation Data, Financial and Transaction Data, Consumer Behavior Data, Healthcare and Life Sciences, Others), By Delivery Model (Subscription-Based, Pay-Per-Use or Pay-Per-Access and Data as a Service (DaaS)), By End-User Industry (
| Forecast Period | 2024-2028 |
| Market Size (2022) | USD 3.24 billion |
| CAGR (2023-2028) | 37.3% |
| Fastest Growing Segment | Private Equity and Venture Capital |
| Largest Market | North America |
Market Overview
The Global Alternative data market has experienced remarkable growth in the business sector, exhibiting a Compound Annual Growth Rate (CAGR) of 37.3%. With a valuation of USD 3.24 billion in 2022, Alternative data have played a crucial role in reshaping business operations, enhancing adaptability, and streamlining processes. Businesses worldwide are increasingly recognizing the significance of Alternative data in optimizing energy consumption, positioning the market for continued expansion and innovation.
Despite these challenges, the Global Alternative data market is poised for continuous growth and innovation. Businesses increasingly recognize the value of advanced position sensing technologies and the benefits of implementing demand response strategies. These strategies not only optimize energy consumption but also contribute to sustainability objectives and regulatory compliance.
Key Market Drivers
Increasing Demand for Unique and Non-Traditional Data Sources
The Global Alternative Data Market is experiencing significant growth due to the increasing demand for unique and non-traditional data sources. Traditional data sources, such as financial statements and market reports, have limitations in providing comprehensive insights into business operations. As a result, businesses are turning to alternative data to gain a competitive edge and make informed decisions. Alternative data, which includes information from social media, satellite imagery, web scraping, and IoT devices, offers a wealth of untapped information that can provide valuable insights into consumer behavior, market trends, and operational efficiency. The ability to access and analyze alternative data allows businesses to uncover hidden patterns, identify emerging opportunities, and mitigate risks, driving the growth of the global alternative data market.
Advancements in Data Analytics and Artificial Intelligence Technologies
Another key driver for the growth of the Global Alternative Data Market is the advancements in data analytics and artificial intelligence (AI) technologies. The exponential growth of data volume and complexity has necessitated the development of advanced analytics tools and AI algorithms to extract meaningful insights from alternative data sources. These technologies enable businesses to process and analyze vast amounts of data in real-time, uncovering valuable patterns and correlations that were previously inaccessible. With the help of machine learning algorithms, businesses can automate data analysis, identify trends, and make accurate predictions. The integration of data analytics and AI technologies with alternative data empowers businesses to make data-driven decisions, optimize operations, and gain a competitive advantage, driving the growth of the global alternative data market.
Regulatory Changes and Compliance Requirements
Regulatory changes and compliance requirements are also driving the growth of the Global Alternative Data Market. In recent years, there has been an increased focus on data privacy and security, leading to stricter regulations and compliance standards. Traditional data sources are subject to stringent regulations, making it challenging for businesses to access and utilize such data. Alternative data, on the other hand, often falls outside the scope of these regulations, providing businesses with an opportunity to leverage valuable insights without compromising compliance. As businesses strive to meet regulatory requirements while gaining a competitive edge, the demand for alternative data has surged. The ability to access and utilize alternative data sources that comply with regulations has become a significant driver for the growth of the global alternative data market.
In conclusion, the Global Alternative Data Market is being driven by the increasing demand for unique and non-traditional data sources, advancements in data analytics and AI technologies, and regulatory changes and compliance requirements. These drivers are reshaping the way businesses operate, enabling them to gain valuable insights, make data-driven decisions, and stay ahead in a competitive business landscape. As businesses continue to recognize the value of alternative data, the global market is expected to witness sustained growth and innovation in the coming years.
Key Market Challenges
Data Privacy and Compliance
The global alternative data market faces significant challenges in terms of data privacy and compliance. As alternative data sources continue to expand, companies are increasingly relying on non-traditional data sets to gain insights and make informed business decisions. However, this reliance on alternative data raises concerns about privacy and compliance with data protection regulations.
One of the main challenges is ensuring that the collection and use of alternative data comply with various privacy laws, such as the General Data Protection Regulation (GDPR) in the European Union or the California Consumer Privacy Act (CCPA) in the United States. These regulations impose strict requirements on how personal data should be handled, stored, and processed. As alternative data often contains personal information, companies must navigate complex legal frameworks to ensure compliance.
Moreover, the global nature of the alternative data market adds another layer of complexity. Companies operating in multiple jurisdictions must comply with different privacy laws, each with its own set of requirements. This can be particularly challenging for smaller companies with limited resources, as they may struggle to keep up with evolving regulations and invest in robust data protection measures.
To address this challenge, companies in the alternative data market need to prioritize data privacy and compliance from the outset. They should implement robust data governance frameworks, conduct regular audits, and establish clear policies and procedures to ensure compliance with relevant regulations. Collaboration with legal experts and data protection authorities can also help navigate the complex landscape of privacy laws.
Data Quality and Reliability
Another significant challenge for the global alternative data market is ensuring the quality and reliability of the data. Alternative data sources encompass a wide range of non-traditional data sets, including social media posts, satellite imagery, web scraping, and more. While these sources offer valuable insights, they also present challenges in terms of data quality and reliability.
One of the main issues is the lack of standardized data formats and quality control mechanisms. Unlike traditional financial data, alternative data often lacks uniformity and may require extensive cleaning and preprocessing before it can be used effectively. This can be time-consuming and resource-intensive, especially when dealing with large volumes of data.
Furthermore, the reliability of alternative data sources can vary significantly. Some sources may be prone to biases, inaccuracies, or manipulation, which can undermine the integrity of the insights derived from the data. Companies relying on alternative data must carefully evaluate the sources they use and establish robust validation processes to ensure the accuracy and reliability of the data.
To address this challenge, companies in the alternative data market should invest in data quality assurance measures. This includes implementing rigorous data cleaning and preprocessing techniques, leveraging advanced analytics and machine learning algorithms to identify and mitigate biases, and establishing partnerships with reputable data providers. Additionally, ongoing monitoring and validation of data sources can help ensure the reliability of the insights derived from alternative data.
In conclusion, the global alternative data market faces challenges related to data privacy and compliance, as well as data quality and reliability. Addressing these challenges requires a proactive approach, with companies prioritizing data privacy, investing in compliance measures, and implementing robust data quality assurance processes. By overcoming these challenges, the alternative data market can unlock its full potential and provide valuable insights for businesses across various industries.
Key Market Trends
Increasing Adoption of Alternative Data in Investment Decision-Making
Alternative data has gained significant traction in the investment industry as a valuable source of information for making informed decisions. Traditional financial data sources, such as company financial statements and market reports, are no longer sufficient to gain a competitive edge. As a result, investment firms are increasingly turning to alternative data to supplement their analysis.
Alternative data refers to non-traditional data sets that provide insights into various aspects of a company's operations, such as consumer behavior, supply chain dynamics, and social media sentiment. This data is often collected from unconventional sources, including satellite imagery, web scraping, and credit card transactions.
The adoption of alternative data in investment decision-making is driven by several factors. Firstly, advancements in technology have made it easier to collect, process, and analyze large volumes of data in real-time. This has enabled investment firms to gain timely insights into market trends and make more informed investment decisions.
Secondly, alternative data provides a unique perspective on companies and industries that is not found at through traditional data sources. For example, satellite imagery can provide insights into a company's production levels or inventory levels, while web scraping can reveal consumer sentiment towards a product or service.
Lastly, the increasing availability of alternative data providers has made it easier for investment firms to access and integrate alternative data into their investment processes. These providers offer a wide range of data sets and analytics tools that cater to specific investment strategies and objectives.
As the adoption of alternative data continues to grow, investment firms are likely to allocate more resources towards building robust data infrastructure and developing advanced analytics capabilities. This trend is expected to reshape the investment landscape and drive the demand for alternative data in the coming years.
Regulatory Scrutiny and Data Privacy Concerns
While alternative data offers significant benefits to investment firms, it also raises concerns regarding data privacy and regulatory compliance. As the use of alternative data becomes more widespread, regulators are paying closer attention to ensure that the collection and use of this data comply with existing regulations.
Regulatory scrutiny is particularly evident in jurisdictions with strict data protection laws, such as the European Union's General Data Protection Regulation (GDPR). Investment firms must ensure that they have the necessary consent and legal basis to collect and process alternative data, especially if it contains personally identifiable information.
Data privacy concerns also arise from the potential misuse or mishandling of alternative data. Investment firms must implement robust data governance and security measures to protect sensitive information and prevent unauthorized access or breaches.
To address these concerns, industry associations and regulatory bodies are working towards establishing best practices and guidelines for the responsible use of alternative data. Investment firms are also investing in technologies such as encryption and anonymization to protect data privacy while still deriving insights from alternative data sources.
Integration of Artificial Intelligence and Machine Learning in Alternative Data Analysis
The integration of artificial intelligence (AI) and machine learning (ML) technologies is revolutionizing the analysis of alternative data. These technologies enable investment firms to process and analyze vast amounts of data quickly and accurately, uncovering hidden patterns and insights that were previously difficult to identify.
AI and ML algorithms can automatically identify relevant data points, clean and normalize data, and generate predictive models based on historical patterns. This automation significantly reduces the time and effort required for data analysis, allowing investment professionals to focus on interpreting the results and making informed investment decisions.
Furthermore, AI and ML algorithms can continuously learn and adapt to changing market conditions, improving the accuracy and effectiveness of alternative data analysis over time. This iterative learning process enables investment firms to refine their investment strategies and generate better risk-adjusted returns.
The integration of AI and ML in alternative data analysis also opens up new possibilities for generating alpha. By combining alternative data with traditional financial data, investment firms can uncover unique investment opportunities and gain a competitive edge in the market.
However, the successful integration of AI and ML in alternative data analysis requires investment firms to have access to high-quality data, robust computing infrastructure, and skilled data scientists. As a result, investment firms are increasingly partnering with technology providers and data analytics firms to leverage their expertise and resources in this area...
Segmental Insights
Delivery Model Insights
In 2022, the global alternative data market experienced a significant dominance in the segmentation by delivery model, with the subscription-based model emerging as the frontrunner. This trend is anticipated to persist and maintain its prominent position throughout the forecast period. The dominance of the subscription-based model is attributable to several key factors. Subscription-based access offers users a consistent and predictable cost structure, making it an attractive choice for financial institutions, investment firms, and various industries requiring continuous access to alternative data. Furthermore, this model often provides clients with broader and unrestricted access to a variety of data sources, enabling comprehensive and ongoing data analysis. It also aligns with the preference for long-term relationships with data providers, ensuring continuous access to valuable alternative data streams. As the demand for alternative data continues to surge across industries, the subscription-based model is expected to remain the preferred delivery model, ensuring its sustained dominance in the global alternative data market throughout the forecast period.
End-User Industry Insights
In 2022, the global alternative data market exhibited a noteworthy dominance in the segmentation by end-user industry, with financial services and investment firms emerging as the frontrunner. This trend is poised to persist and maintain its prominent position throughout the forecast period. The ascendancy of financial services and investment firms in the alternative data landscape can be attributed to several compelling factors. Firstly, these institutions heavily rely on alternative data to gain a competitive edge in investment strategies, risk management, and market analysis. The vast and diverse range of alternative data sources allows them to make data-driven decisions, identify investment opportunities, and assess market trends more comprehensively. Additionally, the increased adoption of quantitative trading strategies and algorithmic trading models among these firms has further fueled the demand for alternative data. Moreover, regulatory changes and compliance requirements have driven the need for alternative data in risk assessment and compliance monitoring. Given the continued growth of the financial sector and the ever-increasing complexity of financial markets, financial services and investment firms are projected to sustain their dominance in the global alternative data market. Their insatiable appetite for alternative data, coupled with the evolving sophistication of data analytics tools, ensures that this industry segment remains at the forefront of alternative data utilization throughout the forecast period, driving innovation and growth within the market..
Regional Insights
In 2022, the global alternative data market showcased a compelling dominance in the segmentation by region, with North America emerging as the dominant market force. This regional trend is poised to endure and maintain its commanding position throughout the forecast period. North America's preeminence in the alternative data market is underpinned by several key factors. Firstly, the region is home to a robust and dynamic financial services sector, characterized by a plethora of investment firms, hedge funds, and asset management companies that heavily rely on alternative data for their strategies. Additionally, North America boasts a thriving technology ecosystem and hosts numerous alternative data providers, data aggregators, and startups, fostering an environment conducive to data innovation and entrepreneurship. Furthermore, the region's regulatory landscape, including the acceptance of alternative data in financial decision-making, has spurred its adoption across various industries. As data privacy regulations continue to evolve, North America's maturity in navigating data compliance issues positions it as a leader in responsible data usage. With a continued emphasis on data-driven decision-making across sectors and a strong commitment to technological advancements, North America is expected to maintain its dominance in the global alternative data market throughout the forecast period, solidifying its status as the epicenter of alternative data innovation and utilization.
Recent Developments
- Quandl, a leading provider of alternative data,was acquired by Nasdaq in July 2023. This acquisition will enable Nasdaq toenhance its data and analytics capabilities, offering customers a wider rangeof alternative data sets.
- YipitData, a provider of web-scraped andalternative data, recently raised $60 million in a Series B funding round inAugust 2023. The funding will be used to expand its data coverage and developnew products.
- Thinknum, a platform that provides alternativedata for investment professionals, announced a partnership with Bloomberg inJune 2023. This collaboration will allow Bloomberg Terminal users to accessThinknum's alternative data sets directly.
- Eagle Alpha, a provider of alternative datasolutions, launched a new product called "Data Insights" in May 2023.This product combines alternative data with machine learning algorithms toprovide actionable insights for investment professionals.
- Neudata, a leading provider of alternative dataintelligence, expanded its coverage to include the Asia-Pacific region in April2023. This expansion will provide clients with access to a broader range ofalternative data sets from the region.
Key Market Players
- Bloomberg LP
- FactSet Research Systems Inc.
- S&P Global Inc.
- Thomson Reuters Corporation
- IHS Markit Ltd.
- QUANDL INC.
- YIPITDATAINC
- EagleAlpha Ltd
- 1010dataInc
- Thinknum Alternative Data Inc
| By Data Type | By Delivery Model | By End-User Industry | By Region |
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