When we started Alqami 15 months ago, we saw the gap in the market as described above, for connecting the supply and demand of alternative data. Market data and reference data were well established, having grown from publications (look up Value Line sometime if you want a blast from the past – they started their publication in 1931), through to real-time streaming services currently. The internet democratised this information, making almost all data readily available, if anything at a 15-minute lag.
The regularity of data availability eliminated one of the leading sources of alpha, or active return on an investment; the knowledge of something before the rest of the general market participants. Algorithmic trading and the rise of high frequency trading strategies has further constrained the value of traditional market data. By the time you can read the Bloomberg post, billions of dollars has potentially been traded automatically based on the qualitative or quantitative results. This has driven quant funds and even fundamental funds to look for new and more unique insights. And some of those insights today are coming from what is referred to as ‘alternative data’.
The alternative data market driven by investment management firms is expected to nearly double this year, to $1.7 billion dollars. While this is still small in the grand scheme of market data overall, it is rapidly growing. The challenge funds face is in finding clean, large volume datasets that are available in a consistent and timely manner. This is often not the focus of a firm, when much of the data is being collected as a by-product of a company’s core business operations.
As these companies are often founded and run by people that have little experience or knowledge of data, they often view it as a cost to store and manage and therefore classed typically as a liability. This is where education is important. Data now drives decisions about almost every aspect of our lives. From the medical profession, to advertising, to investing – decisions are being made based on real-time data for more accurate insights. By educating people on the power of data, they then can start to see the potential of this valuable asset. New and complementary revenue streams can be built alongside the core business and this results in data being turned from liability into an asset.
Education will be the differentiator in the continued growth of the global alternative data marketplace. By educating firms on the power of data, the demand side grows. By educating data producers on the ease, security and revenue potential of monetising their data, the supply side grows. And ultimately, by growing both the supply and the demand equally the marketplace becomes more robust and efficient.
Alqami has been encouraging the education agenda since our inception. We have delivered face-to-face workshops around the world with senior executives to educate them on most data related topics. It is a part of our core mission to enable businesses to realise the opportunities with data and how to better leverage it internally and externally. To continue the development of this ambition, we have recently launched an online education offering https://courses.alqami.com/
and have launched our flagship course, a practical guide to data monetisation. We’re offering a discount when enrolling within the first 30 days, which can be accessed by using the discount voucher code ‘LAUNCH20’ via https://alqami.teachable.com/p/monetize-data