I’ve never tried to use a metal detector. The dream, I assume, of folks that use metal detectors is to find treasure! In an unassuming grass field, maybe they’ll stumble across Roman gold or perhaps a Tudor necklace? The chances are pretty low. Perhaps, a lot of metal objects you’d dig up would pretty worthless. However, you never quite know, maybe they’ll be something very valuable there? In order to increase your chances, you need to do your homework to identify areas which used to have significant human habitation. Was there a castle there, or perhaps a fort?
Every firm has that unassuming field, which may have had that castle. Instead of grass (and perhaps gold), instead there is data. And there is lots of data there too! Some of it could potentially be very valuable, except no one realises it. Why? Because, there isn’t any strategy to deal with this unstructured mass of data. In all likelihood no one knows what datasets are even being collected. Throughout the course of a firm’s daily business it will generate large amounts of data. For a bank, this data will include all the transactions it makes with clients. For an industrial firm, it might be what type of inventory you have, or the number of e-mail you receive daily. This is all “exhaust data”, which is the byproduct of every day activity for firms. In this field of “exhaust data” there could be value. A lot of this data could be unusual, so called alternative data, including text and image data.
Every firm needs to have a strategy for how they will monetise their datasets. It is a resource, which should be monetised and shouldn’t be left untapped. Cuemacro can help you create your strategy for data monetisation and to understand how your data can be used. We’ll help answer the question of how can your firm monetise this exhaust data. What are the most valuable firms at the moment.. firms like Amazon, Google and Facebook, who are experts at data monetisation! Hence, it’s not surprising that shareholders are asking the management boards of firms questions about data monetisation, in particular: what is your data monetisation strategy? Today, if a firm doesn’t have a data monetisation strategy, shareholders are likely to ask another question: why are you leaving money on the table? Management boards need to prioritise data monetisation, if they don’t want to be left behind by their competitors.
We’ll help to guide your firm to understand what types of processes are needed to deal with this data and what its value might be. Indeed, we’ve done research papers for many data vendors such as Bloomberg and CLS, showing how their alternative datasets can be used by market participants to help make trading decisions.
There are many questions we might want to ask in a firm, when it comes to formulating a data strategy for data monetisation. How can we use this exhaust data to help make our internal processes more efficient or to enhance our service to clients? Can this data be monetised by distributing it externally for example by selling to hedge funds? What data products can we create, perhaps combined with externally available datasets? If we want to sell the data from financial firms, can we demonstrate there’s alpha in it? There might be legal questions over how can use the data, and the granularity of what we can distribute, which need to be answered too.
In short, a data strategy needs to answer many questions. Clearly, it’s not very easy to understand how to go about this, in particular because every firm has a different “field” of data. Having valuable data in an unstructured form, which is being ignored, is like having hundreds of Ferraris lying dormant, but being unable to find ignition keys to start them or drivers to driver them. This is a non-trivial task.
If you want your firm to understand how to monetise your dataset and to understand what type of use cases there are for your alternative data, contact Cuemacro! We provide extensive consultancy services in this area and can develop a data monetisation strategy with you. I’m also currently coauthoring The Book of Alternative Data with Alex Denev. I’m putting together a 2 day workshop on alternative data, which I can present in house at your firm to help your firm get up to speed on the topic of alternative data and data monetisation. If you’re interested in seeing a syllabus for this workshop, please drop me a message. To find out more about our data monetisation services, please click here!