For many years, financial institutions across the globe have remained in search of an effective way to gather financial data and drive investment decisions and strategies without negatively impacting the privacy of consumers. While previously, this was easier said than done, this is a process that has been simplified in recent years through the adoption of alternative data by applying web scraping tools.
Recent research indicates that a whopping 50% of institutional investors plan to utilize alternative data in a larger capacity in the coming years. But this then begs us to raise a few questions – what is alternative data? And what is financial data? Well, in the following article, we’ll answer each of these questions and go in-depth on how this data can be gathered.
What is alternative data?
To define alternative data, it can be simply described as data that can be used to gain insight into the investment process. Often associated with hedge fund managers or other investment professionals, alternative data is sourced externally from outside of a particular company, which makes it far more secure than storing a large amount of private data on customers internally.
A recent study even confirmed that a staggering 78% of hedge fund managers are utilizing alternative data solutions in an effort to discover greater insights into market strategy and trends. Therefore, it’s clear to see that alternative data has a significant role to play in the current day and age, in stark contrast to the turn of the century when hedge fund managers would instead place focus on traditional data including press releases and quarterly earnings regarding financial data.
The rise of alternative data
In recent years, alternative data has fallen into mainstream use within the financial services sector. But when you consider that alternative data sets are obtained from external sources, it’s easy to see why this is the case. Although, there is a downside to alternative data, and it’s that data sets aren’t so readily accessible or as structured as traditional forms of data.
In spite of this, various industries, such as the travel sector have benefitted massively from alternative data over the years. With a large amount of the buying experience now taking place over the internet, it’s now possible for businesses to utilize data such as customer reviews on websites, including TripAdvisor.
Thanks to alternative data such as this being so widely available nowadays, it’s now possible for travel companies to gain a more in-depth insight into the behavior of travelers and identify the destinations that are the most popular at certain times of the year. In addition to this, additional information such as average daily rates and how much revenue can be earned per night can also be identified.
It is also a similar situation for the retail industry, too, with customer reviews on products allowing retailers to determine which products are selling well and the ones that aren’t. Furthermore, obtaining alternative data also will enable organizations to remain as competitive as possible by continuing updating price changes.
How to scrape alternative data
Prior to the digital age, obtaining business insights was undoubtedly a mammoth task due to the amount of time and resources it took to obtain relevant data. Even as the years went by, this continued to be the case, as manually obtaining such data proved to be rather difficult. It’s for that very reason that a more effective solution was required – something that came in the form of web scraping.
On the introduction of web scraping, the whole process of obtaining data became far more straightforward. Although, it still required the intervention of experienced staff members such as IT specialists for it to function correctly. This meant that it wasn’t a particularly viable option for companies who didn’t have sufficient time or resources at their disposal.
Thankfully, modern alternative web data solutions like web scraping tools, including proxies, have made the aforementioned issues a thing of the past, as they have allowed businesses to gain a deeper insight into their customers with the whole process being automated. By utilizing alternative data solutions, companies are able to capture data from web pages, which can then be processed and stored quickly and easily.
Using a web scraping tool to obtain alternative data sets from public websites means that a business can access useful insights without having to part with a huge amount of time and resources. So, it’s clear that many businesses across the globe can benefit from alternative data massively in the years to come.
The different types of alternative data
When it comes to the various types of alternative data that are available, web scraped data is undoubtedly the most popular. This is particularly worth taking into account for e-commerce businesses who would like to gain insightful information regarding which products are selling well and aspects of customer behavior such as their buying habits.
Either way, scraping alternative data can often pay dividends for businesses from multiple industries who are looking to obtain new information regarding the outlook of their company. It may not have all the answers you are looking for, but web scraped data most definitely holds a lot of value – particularly when it is combined with other data sources such as traditional sources.
Particularly in an age where it’s required to comply with strict data protection regulations, it’s incredibly important for financial institutions to protect consumer data at all costs. Otherwise, a hefty fine will be a consequence of this data was to end up in the wrong hands.
Thankfully, accessing alternative data sets through the use of web scraping tools is the perfect solution to this, as it means that businesses have the ability to obtain accurate market intelligence and monetize their company without compromising the safety of consumer data.
If you want to learn what tools are best used when scraping alternative data, don’t hesitate and email us at [email protected], where our sales team will answer you ASAP.