Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

In order to be successful in the market, investors need to have an edge, utilizing the most relevant and powerful resources available. This could mean fresh strategies, experimental models, and of course, new and emerging information sources. While there a number of useful and reliable information sources that are universally implemented on a daily basis, their ubiquity implies a zero-sum game. Investors must always stay current with the shifts that will shape the future of the trading landscape.

Alternative Data

Currently, a data revolution is upon us. More data is being collected each day than ever before, and an astronomical amount of information is being produced every second. With this new shift comes opportunity for investors. Alternative data is information that has not been previously used in the finance industry, but can be used as an input to investment decision making..  Whether it’s consumer behavior, business intelligence, industrial metrics, the Internet of Things or satellite imagery, the datafication of society has given us a bottoms up, near real-time view of the economy.

Despite the fact that many companies are producing this data, not all are actively distributing it. In fact, many don’t even know the true value of their asset. However, this is a practice that’s sure to rise in popularity in the near future. In much the same way that stock prices, stock histories, and fundamentals evolved from being largely untapped to fully diffused and widely available, raw and alternative data sources will eventually become fully commoditized, and a necessity. In order to take advantage of alternative data’s current position within the information landscape as an alpha-generating source, investors should act now, and start with the low-hanging fruit.

Where to Look

In the Farming and AgTech industries, companies like Farmlink, Granular, Farmobile, and even John Deere are utilizing devices with internet connectivity and data-collecting capability to help farmers more accurately determine crop health, yield potential, and treatment practices. This technology could potentially provide insight into the health of the industry as a whole in near real time. This assumes that fair data sharing and aggregation practices will be agreed upon, which has yet to happen. In the meantime, weather data provided by satellite and infrared can also reveal crop health. These processes are currently providing insights for companies like Tellus Labs and Descartes Labs.

Within the field of Manufacturing and Business Operations, companies like Cisco, Bosch, and GE have begun using devices with IoT capability to increase efficiency within their supply chains. With large, orchestrated production processes, knowing about something as simple as a single delayed shipment could provide investors with a window of opportunity. Data that comes from within this industry has the potential to give insight into the health of huge, publicly traded companies, empowering investors to react swiftly, before their competitors.

There are a number of additional industries that investors could benefit from researching in order to determine how alternative data is being produced and collected in order to generate insights. This infographic details a taxonomy of alternative data, which highlights ten industries that would be excellent starting points for an investor’s foray into this emerging space.

Quandl the premier source for open, commercial, and alternative datasets, serving investment professionals. Quandl offers essential core financial and economic data alongside a suite of unique, alpha-generating alternative datasets.

Image Credit: shutterstock_141173497


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.