Wall Street is finding ways to make money off your every move
Thomson Reuters
Wall Street is finding ways to make money off your every move
Investment firms like hedge funds are big buyers of so-called "alternative data." That's data that comes from the apps we use, the online shops we buy from, and the GPS tracking within our smartphones.
This info helps investors figure out where to put their money and gives insight into, for instance, how stocks will perform – which companies will continue to rake in cash, and which ones are likely to flop.
The market for this data is expected to double in the next five years in the US, from $200 million today to $400 million, according to a recent TABB Group report. The amount of data that can be packaged into investment insights is expected to increase as our devices and apps glean more info from us.
"The deployment of billions of sensors that can monitor any type of device, from fridges to gas tanks, will significantly increase the quantity and quality of data that is made available for analysis," the report said.
Below are some of the ways vendors are tracking your spending and tastes, according to the report.
Satellites are tracking cars in store parking lots
By Dolev from Wikimedia CommonsIt's already common for satellites to track the number of cars in shops' parking lots. This helps investors figure out which stores are popular – or which companies may be having layoffs if fewer cars are showing up.
Investors used to track this kind of data manually, so satellite imagery is a big step up in terms of efficiency.
This imagery is also expected to get better, with better detail of objects on the ground. Drones and airplanes are expected to provide higher resolution images, too.
The photos can even help determine the health of the soil and agriculture on the ground. That's particularly valuable to commodities investors that bet on factors like crop yields.
Shopping receipts in your email inbox are being monitored
Elie Langer via TwitterThey say nothing in life is free. That goes for the apps that organize our emails, send us coupons and help process refunds. In turn, those free apps may sell the data that we produce.
One of the big sources in this category is receipts. Investors are already using anonymous data gleaned from credit card statements, but the rise of online shopping, and the digital receipts we get in our email, is a boon. That's because emailed receipts are usually itemized, giving investors greater detail into what people are buying.
This type of data sharing should increase, since online shopping is expected to grow. At the same time, brick and mortar stores are also increasingly sending digital receipts.
The data doesn't come without its challenges. For one, receipt data may be biased to a particular demographic or age group – i.e. those that are most likely to shop online. This type of tracking is also harder to implement in Europe, which has stricter privacy rules than the US.
Your phone is tracking the shops you're going to
Lisa Lake/Getty Images for PUMAMore than 90% of purchases are still made in brick and mortar stores.
Cell phones, and the location tracking within them, can help investors figure out who is shopping where.
Social media apps like FourSquare have already predicted earnings results, by tracking how many people were going in to a store.
See the rest of the story at Business Insider