# Investing in the future with alternative web data
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-06-10
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Real-Time Web Data Transforming Financial Analysis in 2021
Meta Description: Discover how the finance sector is utilising public web data to make informed decisions, predict market trends, and maximise gains in today's dynamic
URL: https://financedigest.com/investing-in-the-future-with-alternative-web-datahtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1305012465-1736815655040-compressed.jpg)

_![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/omri-orgad-4-450x675-1736815655051-compressed.jpg)_

_By_ **_Omri Orgad,_** _Managing Director,_ [_Bright Data_](https://brightdata.com/)

The concept of fully understanding what a business entails has changed significantly over the years.

Businesses now find themselves living in a rapidly moving digital economy, influenced by countless new factors that span borders, time zones and most importantly, never sleep.

To survive and thrive in this ever-evolving landscape, businesses are reacting in real-time to the market, making decisions and predictions on the fly, using insights backed by live web data to showcase the best opportunities that can capture their much needed market share.

While the advent of [big data](https://www.financedigest.com/banks-struggle-to-harness-big-data.html "BANKS STRUGGLE TO HARNESS BIG DATA") began in the 1990s, during the coronavirus pandemic the pressing need for real-time data pushed many traditional industries relying on traditional or internal data to look towards the use of web data to secure more reliable insights.

Today, every [industry relies on public web data](https://www.financedigest.com/theres-nothing-artificial-about-the-role-of-ai-and-data-in-the-finance-industry.html "There’s nothing artificial about the role of AI and data in the finance industry ") in some capacity. Even once reluctant industry [sectors such as finance](https://www.financedigest.com/finance-is-the-next-big-sector-to-be-ubered.html "Finance is the next big sector to be Uber’ed"), typically categorised as a more traditional vertical, are beginning to shift away from using traditional data sources – realising they have to also rely on external web data sources to achieve a complete picture.

So, one of the key changes in the finance sector has been its increased use of [financial alternative data](https://brightdata.com/use-cases/stock-market-data) sources, such as public web data, to more accurately project the valuation of their investments in real-time.

The fundamentals of financial analysis before web [data were contemporarily understood by the company’s historical track](https://www.financedigest.com/auditing-in-cyber-how-organisations-can-keep-track-of-their-data.html "AUDITING IN CYBER: HOW ORGANISATIONS CAN KEEP TRACK OF THEIR DATA") record, such as annual projections and quarterly reports.

But now it’s more than that, considering the “new normal” we’re living in, and the fact that historical models are broken, there’s a need to update datasets which [financial institutions are continuing to base their decision-making off of with real-time data](https://www.financedigest.com/data-fake-will-be-the-new-real-in-financial-services-in-2023.html "Data: Fake will be the new real in financial services in 2023"). In fact, almost three-quarters (74%) of hedge funds have begun incorporating alternative web data sources into their financial datasets, according to a [2021 Vanson Bourne research](https://www.businesswire.com/news/home/20210407005449/en/Alternative-Data-Key-For-Decision-Making-In-Financial-Services-Bright-Data-Research-Reveals) conducted in cooperation with [Bright Data.](https://brightdata.com/)

By combining web data sources with existing historical data models, [financial institutions](https://www.financedigest.com/the-future-of-financial-institutions-in-2023.html "The Future of Financial Institutions in 2023") are essentially able to enrich the datasets they pull their analysis from with live web data, to ensure they are providing organisations with the most up-to-date information.

This publicly and readily available information helps [investment firms such as financial institutions, banks, insurance agencies, private equity and venture capital firms, better understand the companies that span across their investment portfolios](https://www.financedigest.com/three-fundamental-tips-to-enhance-your-investment-portfolio-performance.html "Three fundamental tips to enhance your investment portfolio performance"). Overall, helping to minimise risks while maximising gains with forward-thinking [predictions backed by data](https://www.financedigest.com/2023-fintech-prediction-secure-and-private-data-usage-is-key.html "2023 FinTech Prediction: Secure and Private Data Usage is Key").

A strong example is by aggregating [stock market data](https://www.financedigest.com/stocks-yields-fall-data-suggests-u-s-economy-cooling.html "Stocks, yields fall; data suggests U.S. economy cooling"), whereby investors can always be sure their analytical models are fed with the updated stock prices of the companies which they are monitoring.

By focusing on consumer sentiment, social media or related press, financial analysts can predict whether or not a [company’s valuation will be positively or negatively affected](https://www.financedigest.com/factbox-companies-potentially-affected-by-italys-election.html "Factbox: Companies potentially affected by Italy’s election") by public opinion

Using real-time transactional data [investors are able to pinpoint spikes or dips in stock](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors") prices, as well as paint an overall picture of what drives success throughout the organization.

The recent ‘short squeeze’ of Gamestop’s stock is another example. In January 2021, thousands took to forums and trading platforms such as Robinhood to drive up the stock of the popular video game retailer, ultimately leading to millions in losses for [hedge funds](https://www.financedigest.com/what-is-a-hedge-fund.html "What Is A Hedge Fund") and short sellers alike.

But let’s [say you were a Gamestop investor](https://www.financedigest.com/uk-investors-have-their-say-new-research.html "UK INVESTORS HAVE THEIR SAY: NEW RESEARCH") before all the commotion took place. By monitoring forums, such as Reddit, for keywords such as Gamestop, you would have been able to see [ahead of everyone else that there was a plan in place to drive up its stock](https://www.financedigest.com/stocks-dollar-pause-ahead-of-powell-biden-speeches.html "Stocks, dollar pause ahead of Powell, Biden speeches") price and could have planned accordingly to sell off the stock before it crashed.

If you were a short seller, by looking at transactional data, or the news, you would have been alerted to the fact that the rise in stock [price has nothing to do with an increase](https://www.financedigest.com/taylor-wimpey-espana-remain-cautiously-optimistic-as-average-selling-price-increases-by-20-4.html "Taylor Wimpey España ‘remain cautiously optimistic’ as average selling price increases by 20.4%") in sales, or the release of a new product, but instead through some other anomaly urging you to stay clear of the stock.

Those are just two examples which web data could have helped these hedge funds or short sellers escape catastrophe. But there are thousands of other applications of public web data [strategies being used to better decision-making for investments](https://www.financedigest.com/2018-it-security-predictions-methods-for-attacks-investment-areas-cybersecurity-strategies.html "2018 IT Security Predictions-Methods For Attacks, Investment Areas & Cybersecurity Strategies").

In line with the ever-growing emphasis being placed on ESG [compliance and given the diverse set of potential ESG data](https://www.financedigest.com/britain-plans-new-data-rules-to-ease-compliance-burden.html "Britain plans new data rules to ease compliance burden") points available online today, investment firms have all begun relying heavily on external ESG specific alternative web data as a prime means of evaluating ethical, environmental and financial performance across all organisational structures.

These data sources include self-reported metrics such as company disclosures, annual reports and filings. [Information displayed](https://www.financedigest.com/software-to-display-your-businesss-important-information.html "Software to Display Your Business’s Important Information") on company websites surrounding ESG objectives and effort, as well as internal company metrics.

It could also include third-party [data sources providing ESG data statistics that can be found by searching reports by non-governmental organisations](https://www.financedigest.com/avoiding-a-big-data-car-crash-how-to-organise-your-data-to-detect-fraudulent-claims.html "Avoiding a big data car crash: How to organise your data to detect fraudulent claims") (NGOs), government reports, websites and statistics.

As well as real-time ESG data, which can be compiled from news reports by reputable and established media outlets, posts [shared on social](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output") media discerning positive or negative sentiment around ESG concerns, company reviews or reviews surrounding employee sentiment, satellite imagery to track deforestation as well as other environmental factors.

The main caveat, however, is that investment [firms no longer base their decisions solely based off dollars](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") and cents anymore. It has grown much beyond that, and [alternative web data](https://www.financedigest.com/the-quest-for-alpha-in-alternative-data.html "The Quest for Alpha in Alternative Data") sources are a must have in any financial dataset.

Just keep in mind that this is an ever-expanding database. With each new post, comment, news article, annual report, release of new statistics, transaction, stock price fluctuation and so and so forth, the dataset gets larger, more complete and complex as time moves on – offering financial [professionals unabated visibility over their investments](https://www.financedigest.com/investment-in-mental-health-amongst-cybersecurity-professionals-set-to-increase-according-to-infosecurity-europe-poll.html "Investment in mental health amongst cybersecurity professionals set to increase according to Infosecurity Europe poll").

But all in all, with the amount of public web data and alternative financial data [sources](https://www.financedigest.com/uk-finance-minister-hunt-to-make-statement-at-1000-gmt-source.html "UK finance minister Hunt to make statement at 1000 GMT – source") online today, there is no shortage of information available out there for those looking to make better investment decisions, as well as better understand the companies they choose to buy in with.

So, as this set of criteria is now continually being used by the bulk of investment firms to consider companies’ financial as well as non-financial related metrics – a [trend that is not projected](https://www.financedigest.com/investing-trends-and-projections-for-2023.html "Investing Trends and Projections for 2023") to slow down anytime soon – misunderstanding and misinterpreting the role and importance of this alternative dataset can have far-reaching negative implications for financial organisations who choose to ignore the teachings present within data.

**Speak directly with** **Omri** **on LinkedIn and find out how your business can achieve success using web data collection.**

**For more information on how web data collection can help your business, please visit** [**Bright Data**](https://brightdata.com/)

![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/bright-data-logo-copy-450x107-1736815654951-compressed.jpg)

**This is a Sponsored Feature.**


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---