The global alternative data market size is anticipated to reach $135,72-billion by 2030, according to a new report by Grand View Research. The market is expected to expand at a CAGR of 50,6% from 2024 to 2030.
The increasing emphasis on gaining alpha from hedge funds is expected to boost the demand for alternative data.
Asset managers from hedge funds, mutual funds, private equity funds, pension funds, unit trusts, life insurance companies, and other BFSI entities are highly inclined to use alternative data to derive predictive insights.
Moreover, the use of alternative data for risk management processes is also expected to drive market growth.
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. Data analysts use 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 and accounted for a revenue share of more than 58% in 2022. The region is estimated to continue its dominance over the forecast period from 2023 to 2030. The emerging presence of numerous alternative data providers in the US is the major driving factor.
On the other hand, Asia Pacific is expected to emerge as one of the fastest-growing regional markets over the forecast period. This is due to rising use-cases of alternative data in 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.
Additional findings from the alternative data market report include:
* 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 behaviour patterns related to purchases and interests.
* The credit and debit card transactions segment led the target market and accounted for more than 16% of the global revenue in 2023. This high share is attributable to the high demand for this type of data from investors, coupled with the presence of numerous providers of credit card transaction data.
* The hedge fund operators segment led the target market and accounted for about 68% of the global revenue in 2023. This high share is attributable to the high demand from hedge fund companies.
* The Banking, Financial Services, and Insurance (BFSI) industry led the market and accounted for more than 16% of the global revenue in 2023. The growth can be attributed to the increasing demand for insightful data from various BFSI entities, including hedge funds, mutual funds, private equity funds, pension funds, unit trusts, and life insurance companies.
* North America dominated the market and accounted for about 57% share of global revenue in 2023 and is anticipated to maintain its dominance over the forecast period.
* The Asia Pacific region is expected to emerge as one of the fastest-growing regional market because of the increasing use of data-driven research by investors. The regional market is anticipated to open significant growth opportunities for companies from emerging economies, such as India, Singapore, Thailand, and China.