An overview of the characteristics of Japan's alternative data market, its major domestic demand sources and developments among data providers. Differences from overseas markets and future prospects are summarised.
In global markets, alternative data is expanding mainly among professional investors, who use diverse forms of unstructured data, including credit card payment data, satellite imagery, location data and web scraping, to estimate sales on a daily or weekly basis and detect supply-demand gaps at an early stage. The spread of AI, machine learning and cloud computing has reduced the cost of collecting and analysing data, and adoption by small and medium-sized investment firms is also progressing. Applications are expanding beyond financial services, the data market is expected to continue growing, and the number of participating companies is increasing.
A feature of the Japanese market is that, unlike in the United States and Europe, demand is led by traditional operating companies, trust banks, regional banks and insurance companies, which place greater emphasis on regulatory compliance and privacy measures than on data granularity. On the supply side, traditional information vendors, general trading companies and telecommunications carriers with strong capital bases and established track records have an advantage over overseas start-ups. Adoption tends to be cautious and gradual.
The applications attracting attention in Japan include credit scoring, fraud detection, and risk management and claims assessment in the insurance sector. In particular, new opportunities for credit assessment are expanding in Japan as its population ages. Demand for risk analysis using satellite and weather data is also high in Japan, where natural disasters are frequent, with support from regulators as well.
The article provides information on requesting an alternative data market report and a free sample, presenting these as useful sources for understanding the current state of the domestic market.