Alternative data is a term describing the data exhaust that organizations, especially asset managers, are using to develop insights about companies to give them a trading edge. As the use of this data becomes more prevalent, it is critical that business leaders understand how this kind of data can be used against their organizations. This viewpoint articulates some of the steps they will need to take to do this.
The methodology used in this viewpoint is a review of recent literature covering alternative data and its uses.
This paper describes the different ways in which alternative data is being used and cites surprising examples of how this can make companies vulnerable or threaten their reputation.
As an overview of selected examples from secondary sources, this paper is not a comprehensive treatment of the subject.
By studying the issues raised in the paper, business leaders can arm themselves with insights into the use of alternative data and mitigate reputational fallout from its use against their companies.
A better understanding of how alternative data is being used can help protect both individuals and social organizations from being treated inequitably and increase transparency in the use of large and hidden data sets.
To the best of the author’s knowledge, this is the first treatment of the use of alternative data from the perspective of corporate reputation.
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