Data E-Commerce: What is it, and why is it booming?
TickSmith recently participated in the FinTech Cadence career fair where product manager, Jake McBride, spoke on data e-commerce – what it is, why it’s booming, and what the market looks like. Jake has advanced data monetization and data transformation at TickSmith for the past three years. He provided some crucial insights on various use cases and the potential adoption for firms in the future.
What is data monetization in a nutshell?
Gartner defines data monetization as “the process of using data to obtain quantifiable economic benefit.” It’s when organizations take data they own and use tools such as TickSmith to leverage it internally or externally.
Internally, organizations use data to help drive business decisions. Depending on the firm’s industry and opportunities, data monetization can involve translating theoretical factors, for example leading economic indicators like consumer confidence, into concrete business decisions and strategic plans to increase revenue.
Sometimes this internal data monetization can be driven by mitigating risks or reducing the cost of complying with regulatory requirements. In California, wildfire science is becoming more mature, spurred by the economic impact of wildfires, and data monetization allows power companies to identify areas with the highest risk and preempt devastating consequences. At TickSmith, we’re partnering with CanDeal, a consortium of the six largest banks in Canada, to anonymize and pool trading data from multiple institutions to help meet new banking regulations and build a stronger trading infrastructure while saving on the cost of meeting the new requirements.
External data monetization includes selling the data or access to data outright or exchanging information products and services. Driven by the promise of internal data monetization, firms around the world are looking for new data that can drive further insights and business strategies. At the same time, firms are building larger and more sophisticated datasets internally, and external data monetization allows these firms to distribute their data to other firms willing to pay.
TickSmith supports both internal and external data monetization use cases through our Data Web Store platform which provides data distributors with an e-commerce framework to set up their own data web store and to productize, license, and distribute data for sale. CME DataMine, powered by TickSmith, enables the external monetization of CME data that is generated in the course of executing trades. This framework strengthens the brand of firms distributing data, expanding and strengthening their relationship to their customer base through transparent data products. We’ve also seen that data in this way can also drive significant increases in the distributor’s core business activity, an additional way that data can bring firms concrete benefits.
But isn’t selling data bad?
Part of TickSmith’s mission to revolutionize the world of data selling also entails making the process fully transparent. The problem that exists right now is that everyone knows data is being sold, but nobody has visibility into it, which creates fear. TickSmith hopes to give control and confidence back to data consumers by taking a proactive stance toward monetizing data. This simultaneously enables regulators to instill robust checks to ensure personal information isn’t being sold and people aren’t harmed. Suppose more data-driven companies had a secure/licenced way to use data. In that case, they could deliver a ton of value to their customer and strengthen their brands- all without compromising confidentiality/security breaches.
Why is it a critical moment for data monetization?
The vast availability of data and barriers towards leveraging that data are lower than ever. The mix of the two means that more and more firms are “catching up” on the data maturity curve – allowing them to leverage data and enable firms to make strategic decisions and gauge their competitors. The emergence and accessibility of Snowflake/Databricks/AWS and other cloud providers offer data providers a wide variety of pools for wrangling data & getting value out of the data. Firms increasingly have more and more internal & structured data lakes available – because of external factors like new regulations and audits or internal focus and business potential. The special moment is that firms really have the data and the technology to monetize, so their appetite for new data types is growing exponentially.
How has it been working on building an e-commerce platform for data? What have been some challenges and achievements?
As a millennial I am a big believer in data e-commerce and am accustomed to the simplicity of modern web stores. My time at TickSmith so far has meant working with some of the most significant financial companies in the world to make sure their data sales and distribution processes are as seamless as possible.
One of the challenges we’ve faced is translating the standard expectations and flows of an e-commerce platform with physical goods and shipping logistics to data itself. How can we describe data products clearly for consumers so they understand the value of what they’re purchasing? On the other hand, these challenges also represent huge opportunities! For example: How can we make the delivery mechanisms more seamless as they evolve with new technologies and paradigms for data exchange?
TickSmith has the only data e-commerce platform that enables building data products powered by the latest data sharing technologies like Databricks’ Delta Sharing protocol. It’s been very exciting working with key players and data management platforms, and in fact we were the first partner of Databricks to get early access to the feature so we could build this integration. We share a passion for data and I really love working where I can help power the next generation of data exchange and data monetization!
Check out the full interview below, where Jake goes into further detail about each topic and presents many practical examples to illustrate how companies are already profiting from this emerging market: