How do data providers work with the financial services industry?

The world of data is vast. And demand is growing all the time.

From corporations seeking to make data-driven decisions within their own industries to hedge funds looking for information to spark new investment ideas, there are many types of data buyers.

Supply has reacted to demand. There are now hundreds of active data vendors out there — and you can find many of the best ones on Neudata's platform.

We list datasets from almost 2,000 providers and offer data scouting services that can help identify the data best suited to your individual use case.

New to this world? This introductory article is for you — we will explore the different types of data providers, how they work with clients and how Neudata can help both buyers and sellers in this process.

• What is a data provider?
• What types of data do vendors offer?
• How do data suppliers engage with data buyers within the financial services industry?
• How can data providers engage with Neudata?
• Are there other business development opportunities that Neudata can help me with?
• What is Neudata?

What is a data provider?

This question may seem basic but is important to understand.

Providers sell data — information that’s collected and then used for analysis — to buyers, which use the information in a range of ways.

Neudata’s platform specialises in listing alternative data.

So what’s the difference between alternative and traditional datasets? Alternative data typically refers to data used within the financial services industry, often gathered from non-traditional or unofficial sources.

To give an example: investors have used data on stock and bond prices for decades to make investment decisions, so most users consider it to be traditional market data, not alternative.

But data from more unorthodox sources – such as satellites, sensors connected to the internet and consumers’ smartphones – would be. Why? Because it is more complex, mostly unstructured and has to be analysed by a data science professional to extract value.

Over the past 20+ years, a huge increase in computing power, together with mass adoption of personal computers and mobile devices globally, means more data is now generated than at any point in human history.

Providers collect, clean and analyse this data and offer it as a product to buyers.

Next, let’s dig a bit deeper and look at the different types of data these providers offer.

What types of data do vendors offer?

Neudata has classified the alternative data ecosystem into 19 proprietary dataset categories: crowdsourced, economic, ESG, event, financial products, fund flows, fundamental, internet of things, location, news, primary research, satellite/aerial, search, sentiment, social media, transactional, weather, web-tracking and web-scraping.

Let’s explore three commonly used data types:

1) Location data, often known as foot traffic data

Foot traffic data has a broad range of uses, from monitoring the performance of bricks-and-mortar retailers to understanding trends in tourism and real estate.

Also described as footfall or mobility data, these datasets can be used by investors like hedge funds to make trading decisions. An example is this analysis, highlighted by Neudata, of how Hurricane Harvey impacted foot traffic at Walmart in Houston compared to the rest of the US in January 2018.

Investment funds could use this research as they make decisions on how hurricanes are likely to impact Walmart and possibly other retailers in the future.

2) Sentiment data

Sentiment data seeks to measure people’s feelings and emotions towards certain events or products – providing information which can be used to enhance understanding and inform investment decisions.

Machine-learning techniques like natural language processing are often used by vendors in this area.

Neudata’s intelligence section has explored this area with articles on the usefulness of social media sentiment data and Chinese sentiment data.

3) ESG data

The rise of environmental, social and governance investing as a major theme in finance and trading has fuelled the rise of a new branch of providers offering ESG data.

ESG data is information about a company that can be used to determine its performance in a range of ESG areas – and buyers can use it to inform their future investment decisions

If you are interested in discovering more about any of the other types of alternative data mentioned above, contact our team or explore our news and intelligence.

How do data suppliers engage with data buyers within the financial services industry?

Once a data vendor develops a product, it needs to attract clients.

Asset managers are some of the biggest buyers of alternative data — both systematic specialists, which use computer modelling and other quantitative approaches to form trades — and human traders using fundamental analysis.

Selling to these clients can be complex — the alternative data space is a highly regulated industry for investment managers.

These funds must be licensed by regulation authorities, which means data providers can face a lengthy due diligence process that can sometimes be longer than the data evaluation process itself.

Neudata can help data suppliers navigate the regulatory and lead generation hurdles that exist in the ecosystem.

Data vendors can also face hurdles when developing their products, specifically when it comes time to price the data product. Typically, data providers will assess the competitive landscape for benchmark prices, but Neudata can help providers understand the factors that drive buyer demand.

Tiered pricing models have become popular in recent years on both the supply and demand side because they allow pricing flexibility for both sides of the market. For example, some providers choose to offer different regional or sector-specific subsets of their data for a lower price than the full version.

As a general rule, providers should always ensure they are transparent about the sources of their data and that they can clearly explain their data capture methodology. Vendors should make sure they are honest about any limitations, weaknesses, biases and gaps within their data products.

How can data providers engage with Neudata?

The first step to get your data in front of hundreds of qualified data buyers is to self-list your data product on the Neudata platform. Remember – listing information about your data products on Neudata is free, generating inbound leads among hundreds of qualified data buyers without any revenue share.

Next, take part in a research call; providing Neudata’s team of expert analysts with context about your data product will increase the likelihood your data is noticed and will help you pick up market intelligence along the way. Our data scouting team aids buyers in their quest to help identify the data best suited to their individual use case – giving providers the best chance of being discovered.

Vendors will also submit a DDQ (due diligence questionnaire), which is a risk assessment to give buyers additional information on their regulatory and compliance questions.

Data compliance is a hot topic, and only getting more important. Giving prospective clients a transparent picture of your dataset can speed up the onboarding process.

Have more questions about the process? You can contact us at info@neudata.co or reach out to your analyst contact for further information at any time.

Are there other business development opportunities?

Absolutely.

For data providers looking to level up their business development efforts, Neudata offers a wide range of options that help vendors connect more successfully with data buyers globally.

Participate in a Neudata event

Position your brand in front of key industry leads and showcase your data offerings to the alternative data market.

Meet warm sales leads

Use your warm sales introduction credits during our one-to-one matchmaking program (AltDating), which takes place in person at our quarterly summits and virtually.

Design a bespoke event

Work with Neudata’s team to create a custom in-person or virtual event, with targeted delegate recruitment and marketing

Receive personalised advice and guidance

Tap into our consulting offering, which provides guidance to data owners and providers at any stage of their journey – including data monetisation strategy, product discovery, competitive analysis, data validation services and more.

Vendors are encouraged to explore premium subscription options to take advantage of these opportunities.

What is Neudata?

Neudata is an alternative data-focused research platform that specialises in the objective and neutral assessment of data vendors and datasets. We help institutional investors, corporations and leading global organisations connect with the most relevant alternative data sources to use in their internal data ingestion processes.

Our platform is the global authoritative source for unbiased, independent alternative data intelligence.

We don’t buy or sell data, or require data providers to pay us a revenue-share or commission in exchange for recommending their products to data buyers. Neudata’s data buyer clients represent 60-70% of industry-wide spending on alternative data.

If you are a data provider and want advice on monetising your data, or if you’re a potential buyer looking for an introduction to the alternative data landscape, contact info@neudata.co to discover how Neudata can help.