Alternative Data Market

Market Overview

The global alternative data market size reached US$ 6,433.2 Million in 2023. Looking forward, IMARC Group expects the market to reach US$ 118,112.0 Million by 2032, exhibiting a growth rate (CAGR) of 28.6% during 2024-2032. The increasing dependency of companies and investors on alternative data, rising progress in data analytics, artificial intelligence (AI), and machine learning (ML), the increasing penetration of the internet and mobile technology, improved investment strategies, and increasing interconnectivity of markets are some of the major factors propelling the market.

Alternative Data Market Analysis:

• Market Growth and Size: The global alternative data market is experiencing robust growth, driven by the increasing demand from financial institutions, hedge funds, and other industries seeking unconventional data sources for investment decisions.
• Major Market Drivers: Key factors include the quest for alpha generation in investment strategies, the need for deeper insights beyond traditional financial metrics, and the emergence of technology enabling the collection and analysis of diverse datasets.
• Key Market Trends: Collaboration and partnerships between data providers, financial institutions, and technology firms to enhance data quality, accessibility, and usability.
• Geographical Trends: North America dominates the market, driven by driven by the concentration of financial institutions and technological infrastructure. However, Asia Pacific is emerging as a fast-growing market due to rapid digitization and the expansion of financial markets.
• Competitive Landscape: Key players are innovating to differentiate their offerings through data quality, coverage breadth, analytical capabilities, and delivery mechanisms.
• Challenges and Opportunities: Challenges include ensuring data privacy and compliance with regulations, managing the complexity and volume of diverse datasets, and addressing biases inherent in alternative data sources. Nonetheless, development of advanced analytics techniques to extract valuable insights, leveraging emerging technologies like blockchain for data verification, and exploring untapped data sources in emerging markets and industries are projected to overcome these challenges.
   

Alternative Data Market Trends:

Rising competitive advantage

In today's fast-paced business landscape, obtaining a competitive edge is imperative for sustained growth and profitability. Traditional data sources like financial statements and market reports are accessible to all market players and thus offer limited differentiation. Alternative data, on the other hand, provides unique, high-frequency insights that are not readily apparent through conventional data streams. These insights can range from consumer sentiment gathered through social media monitoring to foot traffic analysis via geolocation data. Companies and financial institutions harness these alternative data points to make informed investment decisions, forecast market trends, and develop strategies that place them a step ahead of their competitors. The potential to turn insights into actionable strategies is significantly amplifying the alternative data market demand.

Significant technological advancements

The advent of big data analytics, artificial intelligence (AI), and machine learning (ML) is revolutionizing the way data is collected, analyzed, and interpreted. These technologies can handle large and complex datasets, providing a more nuanced understanding of market dynamics. For instance, machine learning algorithms can sift through millions of social media posts to gauge public sentiment about a particular product, brand, or market trend. Advanced data analytics tools can then convert this information into actionable insights. As technology continues to advance, the scope for what can be achieved with alternative data is expected to broaden, further propelling the alternative data market growth.

Evolving regulatory environments

Although the alternative data market is relatively new, regulatory bodies are beginning to understand its potential and are working to provide a legal framework for its use. This is increasing the legitimacy and trustworthiness of alternative data. Companies feel more secure investing in alternative data when there is clear regulatory guidance, which in turn drives its adoption rates. Moreover, as industry standards develop, businesses are better able to gauge the quality and reliability of alternative data sources, thus making it a more integral part of decision-making processes.

Alternative Data Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global alternative data market report, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on data type and end use industry.

Breakup by Data Type:

• Mobile Application Usage
• Credit and Debit Card Transactions
• Email Receipts
• Geo-location (Foot Traffic) Records
• Satellite and Weather Data
• Social and Sentiment Data
• Web Scraped Data
• Web Traffic
• Others
   

Credit and debit card transactions dominate the market

The report has provided a detailed breakup and analysis of the market based on the data type. This includes mobile application usage, credit and debit card transactions, email receipts, geo-location (foot traffic) records, satellite and weather data, social and sentiment data, web scraped data, web traffic, and others. According to the report, credit and debit card transactions represented the largest segment.

Credit and debit card transactions offer high-frequency data that can be analyzed in real-time. This immediacy is crucial for companies and investors seeking to make swift and informed decisions. Transactional data provides invaluable insights into consumer spending habits, preferences, and loyalty to certain brands or services. This data can help businesses tailor marketing campaigns, adjust pricing strategies, and optimize product offerings. Financial institutions use transactional data for advanced risk assessment models, especially in credit scoring and fraud detection. By analyzing spending behavior, banks can better assess the creditworthiness of individuals and businesses. Investors and hedge funds utilize this data to gauge the health of specific sectors or companies. For instance, a sudden increase in transactions at a particular retail chain could be an indicator of strong performance, guiding investment decisions.

Breakup by End Use Industry:

• Transportation and Logistics
• BFSI
• Retail and ECommerce
• Energy and Utilities
• IT and Telecommunications
• Media and Entertainment
• Others
   

BFSI holds the largest share in the market

The report has provided a detailed breakup and analysis of the market based on the end use industry. This includes transportation and logistics, BFSI, retail and ecommerce, energy and utilities, IT and telecommunications, media and entertainment, and others. According to the report, BFSI represented the largest segment.

On the basis of the alternative data market research the banking, financial services, and insurance (BFSI) heavily dependent on alternative data. The BFSI sector finds numerous applications for alternative data, leveraging it for deeper insights and improved decision-making. Traditional credit scores don't always paint a complete picture of an individual's or a business's financial stability. Alternative data such as utility payments, rental history, and even social media activity can offer additional layers of information for more accurate credit risk profiling. Alternative data sources like geolocation data, device IDs, and social media activity can enhance fraud detection algorithms. This improves the ability of financial institutions to flag suspicious activities more effectively. Hedge funds and asset managers utilize alternative data like social media sentiment, web traffic, and satellite imagery to better understand market trends. This data can be crucial for making investment decisions that outperform the market. Understanding customer behavior through transactional data, online activity, and other non-traditional data sources enables banks and insurers to offer personalized products, thereby improving customer satisfaction and loyalty.

Breakup by Region:

• North America 
  • United States
  • Canada
• Europe 
  • Germany
  • France
  • United Kingdom
  • Italy
  • Russia
  • Spain
  • Others
• Asia Pacific 
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America 
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America exhibits a clear dominance, accounting for the largest market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Russia, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share.

North America, particularly the United States, is a global leader in technology and data analytics. The region's advanced infrastructure and expertise in artificial intelligence, machine learning, and big data analytics is offering a favorable alternative data market outlook. The region is home to some of the world's most sophisticated financial markets, hedge funds, and investment firms, which are among the primary consumers of alternative data. These institutions utilize alternative data to enhance investment strategies, risk assessment, and market analysis. North America has a relatively stable and evolving regulatory framework that is beginning to address the challenges and opportunities associated with alternative data. This provides a level of certainty and encourages investment in alternative data solutions. The entrepreneurial culture in North America supports the start-up ecosystem, leading to the creation of numerous companies specializing in alternative data collection, processing, and analysis. The alternative data market revenue is poised for growth, driven by the region's technological leadership, sophisticated financial institutions, and evolving regulatory landscape. The alternative data market forecast suggests a trajectory of growth driven by evolving data needs and emerging technologies.

Competitive Landscape:

Key players in the market are engaging in a range of activities to consolidate their market position, diversify data offerings, and cater to the increasing demand for actionable insights. Companies are actively acquiring or partnering with smaller firms and start-ups that specialize in collecting unique data sets. This expands their portfolio of alternative data, thus making them more attractive to a broader client base. Incorporation of artificial intelligence and machine learning algorithms to sift through and analyze data is becoming standard. These technologies make the extracted insights more accurate and actionable. Recognizing that different industries have varied needs, companies are offering tailored data solutions. For instance, some firms specialize in providing alternative data specifically curated for hedge funds, while others focus on consumer analytics. As the alternative data industry is still emerging, key players are investing in educational programs and resources to educate potential clients on the value and utility of alternative data.

The market research report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• 1010Data Inc. (Advance Communication Corp.)
• Advan Research Corporation
• Dataminr Inc.
• Eagle Alpha
• M Science
• Nasdaq Inc.
• Preqin
• RavenPack
• The Earnest Research Company
• Thinknum Inc.
   

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Latest News: 

• In April 2023, Eagle Alpha, the leading data platform and end-to-end workflow solution provider for the alternative data marketplace, announced the release of ‘Surveyor by Eagle Alpha’, their compliance-focused product to support data buyers and data vendors with due diligence and communication capture.
• In April 2023, Preqin, the global leader empowering the alternatives community with essential data and insight, announced the 2023 winners of the 2023 Preqin Awards, which recognize the market leaders and top industry performers across private capital and hedge funds.
• In June 2023, alternative data providers Thinknum, Similarweb and Eagle Alpha, among others, announced the launch of Alternative Data Academy, an organization geared to streamlining access to alt data research and democratizing access to industry knowledge.

Alternative Data Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the alternative data market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global alternative data market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the alternative data industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.