Next Gen Data to gain competitve advantage over peers
What is Alternative Data
Alternative data is used to obtain insights into the investment process. Investment professionals and hedge fund managers use these data sets to make investment decisions in the company. Companies from other industries also use alternative data to understand customer sentiment, customer preferences and prevailing trends. Alternative datasets are generally generated by sources that are not related to the targeted company. They are compiled by collecting and shortlisting relevant data from financial transactions, satellite imagery, mobile devices, and other sources on internet.
Globally, the use of alternative data is done by nearly every industry. They include: Automotive, Banking, Energy,Industrial,Telecom,Retail,Media,Real Estate,Transportation.
The industry that consume alternative data most is Banking, Financial Services and Insurance (BFSI). BFSI entities like mutual funds, hedge funds, private equity funds, unit trusts and life insurance companies use it to make regular investment and trading decisions to increase their alpha and reduce risks.
IT & Telecommunication
The BFSI industry is followed by IT and telecommunications industry in terms of alternative data usage. These companies formulate their marketing and operating strategies by considering social media sentiment, demographic data and web usage behavior of target customers.
Retail industry also uses a significant portion of alternative data. The industry uses social media sentiment and web usage and traffic to understand what customers are actually searching for. It also uses to demographic data to pinpoint target customers and then make the marketing strategy accordingly.