The Rise Of Financial Data Startups In India It is not just the biggest names in financial data; the onset of the digital revolution has cultivated new ways of information access leading to the birth of state-of-the-art financial data startups

Today's business environment tells us that data discovery or analysis for business users is the key to staying ahead of the curve. Be it large corporate organizations to startups and even individual traders, analysis of financial data and gaining actionable insights from the same is key to business success.

Data: the business goldmine

Financial data discovery helps companies evaluate critical KPIs to spot patterns, acquire insight, track competition and answer precise business queries. New-age data discovery solutions make this process convenient, agile, and flexible, reducing time for accurate business decisions.

Data giants such as Bloomberg, Reuters, FactSet, and S&P Global have dominated the data space for decades. These companies have been the pioneers in providing cutting-edge financial information, making them indispensable for investors worldwide.

Indian companies, too, such as CRISIL, Tracxn, and CARE Ratings, have made their mark through extensive in-depth data and are even considered viable alternatives depending on the budgets and needs of their clients.

CRISIL, which S&P Global acquired in 2005, has built its credibility over the years. It is also interesting to note that other financial data bigwigs such as Thomson Reuters and FactSet have large back offices in India that employ thousands of employees. These facts indicate that India is a credible financial data intelligence destination worldwide.

A data revolution

It is not just the biggest names in financial data; the onset of the digital revolution has cultivated new ways of information access leading to the birth of state-of-the-art financial data startups in India that have built niche capabilities.

These modern financial data startups are not only exemplifying innovation but are showing leadership in creating sustainability goals for companies across sectors and industries. COVID-19 played a crucial role in the accelerated adoption of data intelligence. We are aware of the fact the pandemic left an indelible impact on industries across the world. Digital adoption has taken a quantum leap both at organizational and sector levels.

As a result, digitization of customer interaction for all businesses has increased several notches. For financial professionals, who needed to solve problems remotely, data discovery took a whole new dimension. The solution was clear as day- in the pandemic-altered world, which had increasingly complicated data demands, the future of data meant next-level digitization.

Establishing a niche in data intelligence

While handling billions of financial data points, data intelligence companies had to ensure premium data quality so that companies would not have to spend big bucks on first obtaining data and then cleaning it. At a time when obtaining large amounts of data has become the order of the day, the onus is on private data companies to mould multiple flavours of data into an intelligible format, ensuring downstream applications get linked data that can, in turn, yield insights.

The investor community, that bets on startups, is also rejigging strategy post-pandemic and is consequently in the midst of evolution. A majority of venture capital firms are moving away from their age-old practice of relying on "gut feel" stemming from the rich experience and acumen of their leading partners by increasingly incorporating data into their decision-making.

For early-stage start-ups, where performance data was practically non-existent, the data insights provided by private data companies are proving to be indispensable in accurately assessing the potential of the company and its leadership team. Further, signals generated by algorithms are aiding decision-making.

Encouraged by the success that some leading VCs have seen, the investor community at large is now using growth metrics and other leading performance indicators on business sustainability that are generated by machine learning models. Besides, sourcing opportunities, data intelligence today is being used by investors to monitor progress and aid the progress of data companies in a manner that was earlier not possible.

With an increasing number of VC firms and the investor fraternity at large using data science, private data companies will need to enhance efficiencies to determine the effectiveness of their data sets on an ongoing basis. It is no exaggeration to say that business models are evolving with time in the digital world that is transforming daily. Market intelligence is an essential tool that provides important insights related to balance sheets, segmented financial forecasts, market data, competitor trends. And India is a strong contender in the data crunching game that helps all stakeholders take crucial decisions, driving growth and success.