According to Arizton’s latest research report, the global alternative data market is growing at a CAGR of 52.61% during 2023-2029.
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Report Scope:
Market Size (2029): $79.22 Billion
Market Size (2023): $6.27 Billion
CAGR (2023-2029): 52.61%
Historic Year: 2020-2022
Base Year: 2023
Forecast Year: 2024-2029
Market Segmentation: Type, Industry, End-User, and Geography
Geographical Analysis: North America, Europe, APAC, Latin America, and Middle East & Africa
The alternative data market is fragmented, with both large players and specialized providers. Major firms dominate by offering diverse data sources and advanced analytics platforms, serving industries like finance, retail, and real estate. These companies often expand through mergers and acquisitions, acquiring new data types and technologies to enhance their offerings and geographic reach. Their scalability, coupled with robust data integration capabilities, allows them to deliver comprehensive insights while managing the high costs of acquiring and processing large datasets.
Smaller, niche providers differentiate themselves by focusing on specialized data types, such as satellite imagery, social media sentiment, or foot traffic data. They offer customized solutions for highly targeted use cases, which gives them flexibility and agility in meeting specific customer needs. Competition in this space is driven by the quality, accuracy, and relevance of data, as well as pricing models, with smaller players often offering tailored data packages.
Demand for alternative data is growing, particularly from hedge funds, investment firms, and corporations seeking better decision-making insights. In regions like APAC, advancements in AI and machine learning are accelerating market growth. In contrast, regulatory compliance, especially around data privacy (e.g., GDPR, CCPA), is becoming a key factor in North America and Europe. As the market consolidates, companies with strong compliance and data practices will have a competitive advantage.
Key Themes Reshaping the Fintech Industry and their Positive Impact on the Alternative Data Market
The fintech industry is undergoing significant transformation, driven by emerging trends like embedded finance, connected commerce, open banking, and generative AI. These developments are reshaping financial services and creating new opportunities for leveraging alternative data.
Embedded Finance is expected to grow to $320 billion by 2030, with contributions from SMEs and consumers, offering new revenue streams for fintech firms and banks. This growth is driving the need for alternative data sources to support personalized financial products and services. Connected Commerce, fueled by granular customer data, allows banks to offer targeted advertisements and create new revenue channels, further emphasizing the role of data in optimizing customer engagement.
Open Banking is also having a profound impact, enabling more precise transaction-level data that facilitates targeted offers and improved decision-making. Meanwhile, Generative AI is enhancing productivity within fintech, especially in coding and customer support, creating more efficient ways to integrate alternative data into financial products and services.
Government policies, particularly in emerging markets, are supporting this evolution. Digital public infrastructure (DPI) systems, such as India’s UPI and Brazil’s Pix, are enabling broader access to financial services and fostering the use of alternative data. These systems improve data sharing, boosting the potential of alternative data in fintech to enhance risk assessment, service delivery, and decision-making.
Mergers and Acquisitions: Key Drivers of Growth in the Alternative Data Market
In recent years, mergers and acquisitions (M&A) have become a prominent trend in the alternative data market, as companies look to enhance their offerings and stay competitive. This trend reflects strategic moves by firms to consolidate resources, broaden their data portfolios, and strengthen their market position in an increasingly dynamic industry.
One of the primary drivers behind these M&A activities is the need for diverse and high-quality alternative data. As demand for alternative data grows, companies are eager to integrate various data sources and advanced technologies to provide more comprehensive insights. By acquiring firms with specialized expertise in areas like predictive analytics, sentiment analysis, or financial research, companies can enhance their data analytics tools and deliver more value to clients.
The competitive nature of the market also plays a significant role. With the pressure to stay ahead of rivals, firms are using M&As to rapidly scale operations, expand technological infrastructure, and access new markets. For example, acquiring companies with established client bases and specialized data can accelerate growth and market penetration. In an industry were staying ahead of technological advancements is crucial, mergers and acquisitions serve as a quick and effective strategy for long-term success.
Regional Insights into the Global Alternative Data Market
North America: A Mature Market with High Demand North America boasts a well-established alternative data market, driven by strong demand across sectors like financial services, retail, and technology. The region benefits from advanced technological infrastructure, robust investment in data analytics and AI, and a strategic focus on leveraging alternative data for competitive advantages such as improved investment strategies and deeper customer insights.
Europe: Navigating Regulations and Privacy Concerns In Europe, interest in alternative data is growing, particularly due to evolving regulatory frameworks and a strong emphasis on data privacy. As industries such as finance, retail, and logistics navigate stricter compliance requirements, European businesses are increasingly adopting alternative data solutions while maintaining a cautious approach to data protection and regulatory adherence.
APAC: Rapid Growth Driven by Digitalization The APAC region, particularly China and India, is witnessing substantial growth in the alternative data market. Driven by rapid digitalization and economic expansion, the demand for alternative data is soaring, with increased digital data generation and technological advancements. However, challenges such as data privacy concerns and the need for enhanced data infrastructure remain hurdles to overcome.
Latin America: Emerging Interest Amidst Infrastructure Challenges In Latin America, the alternative data market is in its nascent stages, focused on improving data accessibility and infrastructure. While challenges like data quality issues and limited technological resources persist, there is rising interest from businesses seeking to harness alternative data for market insights and gaining a competitive edge.
Africa: Developing Market with Sector-Specific Adoption Africa’s alternative data market is still developing, with limited adoption due to infrastructural challenges and slower technological progress. However, certain sectors, such as financial services and retail, are increasingly recognizing the value of alternative data, particularly for enhancing decision-making and gaining market insights.
Key Development in the Global Alternative Data Market
Key Company Profiles
Market Segmentation
Type
Industry
End-user
Geography
APAC
Europe
North America
Latin America
Middle East & Africa
The Arizton Advisory & Intelligence market research report provides valuable market insights for industry stakeholders, investors, researchers, consultants, and business strategists aiming to gain a thorough understanding of the alternative data market. Request for Free Sample to get a glance of the report now: https://www.arizton.com/market-reports/alternative-data-market
What Key Findings Our Research Analysis Reveals?
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