What is alternative data and what sectors does it benefit?
The increase in data from mobile devices, satellites, sensors and websites has resulted in vast amounts of data also known as Big data. All that data has the potential to be mined for insights and potentially help companies make better data-driven decisions.
What is alternative data?
Alternative data refers to data used by investors to evaluate a company or investment and find an edge in the market.
This data helps investors obtain more accurate, faster or more granular information and metrics on company performance than traditional data sources. Analysis of alternative data can provide insight beyond that provided by typical industry data sources.
What are the most popular data sets for investors?
Data source with the highest number of providers: Social/Sentiment
Data source with highest collection: Credit/debit card
Most used datasets: Web Data, Credit/Debit Card
Most revealing datasets: Credit/debit card, web data
Least useful datasets: Geolocation, Satellite
Also Read: “Data Monetization: What Every Company Should Know“
How is alternative data generated?
Individual: Social/Sentiment, Web Traffic, Application Usage, Surveys
Business Processes: Credit/Debit Card, Web Data, Public Data, Email/Consumer Receipts, Public Information
Sensors: Geolocation, Satellite, Weather
Sectors benefiting from alternative data:
Banking sector: alternative data can illustrate the applicant’s history of meeting financial obligations, such as timely payment of the cell phone bill each month, can be useful information.
Precision agriculture: Farmers can analyze time-series images taken by drones to make more accurate crop yield predictions.
Health: Public health workers can search social networks for specific keywords to refine efforts to track the spread of disease.
Investment firms: Analysts can use satellite imagery to analyze the number of cars in a shopping mall parking lot and predict the state of the local economy.
Logistics industry: Provides deep insight into the logistical, legal and commercial relationships between corporations and facilities of different companies anywhere in the world.
Governments: Government and municipal entities can leverage this data to optimize strategic planning, improve the quality of public services and optimize their budgets.
Retail: Improve retailers’ expansion strategies by accurately identifying consumer demographics, understanding customer behavior and competitor performance.
Real Estate: Through solutions based on the analysis of satellite photos and machine learning models, it is possible to optimize the process of identifying the best land uses and analyze the areas where a construction project will be developed with a high level of detail, in order to find the optimal location and minimize investment risks.
At PREDIK Data-Driven we provide industries with different types of alternative data to be integrated into their decision making processes and thus maximize their revenues.