The global Alternative Data Market size is expected to reach USD 69.36 billion by 2028, according to a new report by Grand View Research, Inc. It is expected to expand at a CAGR of 58.5% from 2021 to 2028. The increasing emphasis on gaining alpha from hedge funds is expected to boost the demand for alternative data. The asset managers from hedge funds, mutual funds, private equity funds, pension funds, unit trusts, life insurance companies, and other BFSI entities are highly inclining to use alternative data to derive predictive insights. Moreover, the use of alternative data for risk management processes is expected to drive the market.
Nowadays, data sources are not limited to transactions and email receipts as companies are finding ways to extract data from various emerging sources. These include social media, web traffic, mobile devices, sensors, IoT-based devices, satellites, and e-commerce portals. The data analysts utilize this data in correlation with each other to derive various hidden patterns and insights. However, the data collected from some of these sources conflict with privacy regulations such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). Thus, the data aggregators and end-users need regulatory compliance, which ensures their datasets are free from Personal Identifiable Information (PII).
North America dominated the market in 2020 with a share of more than 68.0% and is estimated to continue dominating the market from 2021 to 2028. The emerging presence of numerous alternative data providers in the U.S is the major driving factor. Companies such as Advan, Eagle Alpha, M Science, and YipitData are providing various types of alternative data, including credit and debit card transactions, email receipts, geo-location (foot traffic) records, mobile usage, satellite, weather data, social and sentiment data, and web scraped data. The acquisitions and partnership initiatives from companies, such as Nasdaq and S&P Global Platts, are further expected to fuel the regional market growth. Asia Pacific is expected to emerge as one of the fastest-growing regional markets over the forecast period. This is due to the rising use cases of alternative data in the BFSI, retail, automotive, and telecommunication industries. The use of alternative data for investments and risk assessment, particularly from companies in emerging economies, such as India and China, is expected to boost the regional market growth.
Related Press Release@ Alternative Data Market Report
Alternative Data Market Report Highlights
- Amidst the coronavirus pandemic, the companies are using alternative data collected from social media, mobile phones, applications, wearables, and other IoT-based devices to assess changes in consumer behavior patterns related to purchases and interests
- By data type, the credit and debit card transactions segment is anticipated to exhibit the highest CAGR from 2021 to 2028 owing to the high accuracy of the data type and significant demand from asset managers
- Based on end user, hedge fund operators held the largest revenue share in 2020 on account of the rising demand for alt data from the investors and firms to identify lucrative investment opportunities and generate alpha
- The BFSI industry segment is held the largest share in 2020 as the entities such as hedge funds, mutual funds, and insurance companies are the early adopters of alternative data
- North America dominated the global market and accounted for over 68.0% share of the global revenue in 2020. The region is expected to maintain its lead from 2021 to 2028
- Emerging economies, such as India, Thailand, Singapore, and China, are expected to drive the Asia Pacific market owing to the rising use cases of alternative data for predictive risk assessment