Global Alternative Data Market: Analysis By Type, By Industry, By End User, By Region Size and Trends with Impact of COVID-19 and Forecast up to 2029

Alternative data encompasses information collected from unconventional sources beyond the standard financial metrics utilized in the analysis. It spans various non-traditional datasets, including but not limited to social media activity, satellite imagery, web scraping, and sensor data. This diverse range of sources offers unique insights into market dynamics, consumer behavior, and company performance, supplementing traditional financial data sources like balance sheets and income statements. Alternative data is increasingly recognized for its ability to provide early signals of trends, uncover hidden correlations, and enhance predictive models, empowering investors, analysts, and decision-makers to gain a more comprehensive understanding of complex systems and make more informed decisions. The global alternative data market value stood at US$6.97 billion in 2023 and is expected to reach US$88.92 billion by 2029.

The global alternative data market continues to expand steadily, propelled by a multitude of factors. The proliferation of credit and debit card transaction data providers has significantly enriched the available datasets, offering valuable insights into consumer behavior and economic trends. Concurrently, rising demand from hedge fund managers and institutional investors underscores the growing recognition of alternative data's value in enhancing investment strategies and mitigating risks. Additionally, the surge in data-driven decision-making across industries, driven by growing digitalization, fosters the adoption of alternative data solutions for informed decision-making. Government initiatives and regulatory environments further support market growth by promoting data transparency and entrepreneurship. The integration of unstructured data, globalization of markets, and increasing penetration in sectors like automotive and BFSI also contribute to the market's expansion, reflecting the diverse applications and increasing relevance of alternative data across various domains. The market is expected to grow at a CAGR of 52.87% over the projected period of 2024-2029.

Market Segmentation Analysis:

By Type: The report provides a bifurcation of the global alternative data market into nine segments namely, Credit & Debit Card Transactions, Social & Sentiment Data, Web Scraped Data, Web Traffic, Mobile Application Usage, Satellite & Weather Data, Geo-location Records, Email Receipts and Other Data Types. The Credit & Debit Card Transactions segment held the highest share in the market and is expected to be the fastest-growing segment in the forecasted period. Firstly, the proliferation of electronic payment methods has significantly increased the volume and granularity of transactional data. Secondly, advancements in data analytics technologies enable more sophisticated analysis of this data, unlocking valuable insights for various industries. Additionally, the growing acceptance of cashless transactions worldwide further boosts the relevance and demand for credit and debit card transaction data. As a result, this segment is expected to maintain its rapid growth trajectory, driven by the continuous expansion of digital payment systems and the increasing integration of alternative data in decision-making processes.

By Industry: The report provides a bifurcation of the global alternative data market into eight segments namely, BFSI, IT & Telecommunication, Retail, Automotive & Transport, Media & Entertainment, Energy, Industrial, and Others. The BFSI segment held the highest share in the market and is expected to be the fastest-growing segment in the forecasted period. Firstly, the BFSI industry heavily relies on data-driven decision-making, making alternative data invaluable for risk assessment, fraud detection, and customer segmentation. Secondly, regulatory changes and increasing competition drive the need for more advanced analytics and insights. Thirdly, the sector's digital transformation encourages the adoption of alternative data to gain a competitive edge and improve operational efficiency. As a result, the BFSI segment is expected to maintain its rapid growth, fueled by the continuous demand for innovative data solutions in the finance industry.

By End User: The report provides the bifurcation of the global alternative data market into four segments namely, Hedge Fund Operators, Investment Institutions, Retail Companies, and Other. The Hedge Fund Operators held the highest share in the market. The dominance of Hedge Fund Operators in the global alternative data market can be attributed to their high demand for unique datasets to gain a competitive advantage in investment strategies. They heavily rely on alternative data for market sentiment analysis, trend spotting, and risk mitigation. On the other hand, Retail Companies is expected to be the fastest-growing segment in the forecasted period, due to increasing awareness of alternative data's value among retailers for customer analytics, demand forecasting, and inventory management. As retail becomes more data-driven, the demand for alternative data solutions in this segment is expected to surge, driving its rapid growth in the forecasted period.

By Region: The report bifurcates the global alternative data market into five regions namely, North America, Europe, Asia Pacific, Middle East and Africa, and Latin America. North America is the largest region of the alternative data market and presents a promising landscape. Notably, countries like the US, Canada, and Mexico contribute significantly to this market, each shaped by unique elements shaping their alternative data realm. In the US, the alternative data market thrives due to a combination of factors. The country's robust technological infrastructure and widespread adoption of digital platforms generate vast amounts of diverse data sources.

Additionally, a mature financial sector and a highly competitive landscape drive the demand for innovative data solutions among hedge funds, investment institutions, and corporations. Regulatory frameworks promoting data transparency and entrepreneurship further bolster the market. In Canada, while smaller in scale, similar trends emerge with growing adoption among financial institutions and corporations. In Mexico, the market is in its nascent stage but shows potential, fueled by increasing digitalization and a growing interest from investors and businesses.

The Asia Pacific emerges as the fastest-growing region in the alternative data sector, fueled by several key factors. Robust economic growth and widespread digital transformation drive exponential data generation across industries. The adoption of advanced technologies like IoT, AI, and big data analytics amplifies the demand for alternative data solutions. Expanding financial markets and escalating investment activities, especially in emerging economies such as China and India, further accelerate market growth. In China, the sector thrives due to its vast population and dynamic digital ecosystem, attracting both domestic and international investors. India experiences burgeoning growth in tandem with rapid digitalization and a thriving startup landscape, offering ample opportunities for alternative data providers across sectors. Japan, with its mature economy and technological prowess, witnesses significant adoption of alternative data solutions driven by its established financial industry and innovation culture. Overall, the Asia Pacific's dynamic economies, technological advancements, and growing awareness of the value of alternative data propel it as the fastest-growing region in the sector.

Global Alternative data Market Dynamics:

Growth Drivers: The global alternative data market has been rapidly growing over the past few years due to numerous growth drivers such as proliferation of credit and debit card transaction data providers, rising demand from hedge funds managers, growing digitalization, surge in data-driven decision-making, government initiatives and regulatory environment, integration of unstructured data, globalization of markets, real-time insights, and many other factors. The rising demand from hedge fund managers is propelled by their quest for unique datasets to gain competitive advantages in investment strategies. They leverage alternative data to gain deeper insights into market sentiment, industry trends, and individual company performance, seeking alpha and minimizing risks. Additionally, growing digitalization across industries accelerates the adoption of alternative data solutions, as businesses leverage digital platforms and technologies to generate vast amounts of diverse data. These trends signify a broader shift towards data-driven approaches in decision-making, where alternative data plays a pivotal role in providing actionable insights for hedge funds, institutional investors, and businesses alike, driving the rapid growth of the global alternative data market.

Challenges: However, the market growth would be negatively impacted by various challenges such as lack of expert personnel, lack of data accuracy, etc. One significant challenge facing the alternative data market is the issue of data accuracy. Despite the wealth of available data, ensuring its reliability and accuracy remains a concern. Inaccurate or unreliable data can lead to flawed insights and erroneous decision-making, undermining the value proposition of alternative data solutions. Addressing this challenge requires robust data validation processes, quality control measures, and continuous monitoring to maintain data accuracy and integrity.

Trends: The market is projected to grow at a fast pace during the forecasted period, due to market trends internet penetration and 5G adoption, penetration of internet of things (IOT), advancements in AI, ML, and NLP, expansion of emerging data sources, emergence of generative AI, growing interest in stock market trading, rise of ESG alternative data, etc. The global alternative data market is transforming with Advancements in AI, ML, and NLP are revolutionizing the alternative data landscape, enabling more sophisticated analysis and interpretation of vast datasets. These technologies empower businesses to extract actionable insights from unstructured data sources like social media, news articles, and customer reviews, enhancing decision-making processes. Additionally, the rise of ESG (Environmental, Social, and Governance) alternative data reflects a growing emphasis on sustainability and ethical considerations in investment strategies. These trends collectively underscore the transformative potential of advanced technologies in shaping the future of the alternative data landscape.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 pandemic profoundly impacted the alternative data market, both during and after its onset. Initially, the crisis spurred heightened demand for real-time insights as businesses sought to navigate unprecedented disruptions. Alternative data, such as mobility trends and consumer behavior shifts, became invaluable for risk assessment and scenario planning. Post-COVID, the market continues to evolve with a focus on resilience and adaptability. There's a growing emphasis on data sources that capture emerging trends, remote work patterns, and healthcare-related indicators. Additionally, the pandemic accelerated digital transformation, fostering innovation in data analytics and AI-driven solutions. As businesses embrace a more data-driven approach to decision-making, the alternative data market is poised for sustained growth and further integration into mainstream strategies.

Competitive Landscape and Recent Developments:

The global alternative data market is fragmented, with an increasing number of large and medium-sized players accounting for the majority of the market revenue, and the presence of a substantial number of regional market players with limited business offerings and customer base.

The key players in the global alternative data market are:

Factset Research Systems Inc.

Jefferies Financial Group Inc. (M Science)

London Stock Exchange Group Plc (LSEG Data & Analytics)

Nasdaq, Inc.

SymphonyAI, LLC (1010data, Inc.)

Thinknum Alternative Data

Dataminr, Inc.

RavenPack International SL

Preqin Ltd.

Advan Research Corporation

Eagle Alpha Ltd.

Earnest Analytics

YipitData Inc.

Some of the strategies among key players in the market are new launch, mergers, acquisitions, and collaborations. For instance, On February 20, 2024, Preqin had announced a partnership to equip investment professionals with asset-level impact data. This collaboration aimed to address the scarcity of credible ESG and impact data in opaque alternative markets. On July 24, 2023, RavenPack announced the integration of data and knowledge graph with Snowflake, the Data Cloud company. This collaboration empowered customers to access RavenPack's news, social media, and job datasets seamlessly on Snowflake's platform.