Suburbia founder: Startup or corporate, you’re doing data wrong

This article was originally published on our sister site, bobsguide.

The world’s biggest banks and corporations still rely on archaic data sources which haven’t improved in decades, according to Hamza Khan, founder of alternative data provider Suburbia.

“Data is expensive, it’s slow, it’s often out of date before it’s even released.  We think we can do better with alternative data,” says Khan.  But what exactly is alternative data? “It’s quite a hot topic right now, but it means different things, to different people.”

For Khan, however, alternative data can be broken down into two streams: data that hasn’t been generated before, or data that already exists but is being used in a different way.

“For instance, if you work for Starbucks, the daily number of coffees sold is just regular management data. But what if you were to use those sales to track unemployment? Suddenly that becomes alternative data because buying more expensive coffees goes hand in hand with higher wages. So we’re using aggregated data from POS providers in a new way to get better insights, and that is alternative.”

The industry is already catching on fast – spending on alternative data by trading and asset management firms may exceed $7bn by 2020, according to Deloitte.

But while many firms are keen to use alternative data, doing so intelligently will be key, says Khan: “The risk is if you open the floodgates, and there are just terabytes upon petabytes of data becoming available, it’s very difficult for people to process or understand.”

16.1 zettabytes (ZB) of data were generated globally in 2016. This statistic is predicted to grow tenfold, to 163 ZB by 2025 (ibid).  Suburbia acts as an intermediary which turns data into consistent, useful insights.

“We partner with PSP’s, payments providers, loyalty apps and anyone with interesting data to anonymize, aggregate and clean the data”,  says Khan.  Everything on the system, from the number of houses bought to how much cargo an airport handles, is on a time series chart.

“Because we partner with companies directly to generate data, we can take responsibility for it being a consistent format with a much higher fidelity, creating value and enriching the data for all our stakeholders,” says Khan.

Consistency or ease of access shouldn’t be overlooked.  “The biggest hurdle right now is in data interfaces. For instance, every ship on the planet transmits its location via radio, but how do you deal with this huge data set? A lot of corporates are still using Excel, which just can’t handle huge volumes.  We make it easier to pull and process this data in whichever tool our clients are using,” says Khan.

Open Banking represents another opportunity for alternative data to change the closed data environment into a more open one, says Khan.

“Open Banking will have a fantastic impact for alternative data, because there is something wrong with a small number of companies, whether it’s monolithic tech companies or billionaire hedge fund managers controlling all the data in the world. I think there is a moral issue with that” he says.

“Data should be for everyone, so we can all make better decisions faster,” he says.

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