Market forces are changing the way that businesses collect, process, and apply external data. Mark Hookey, CEO of Demyst, has seen a major shift driven by data's widespread democratization.

“There has never been a more interesting time to be in the data space,” Hookey said. He shared his perspective as part of the Demyst webinar series for 2022 data predictions.

The automated cleaning and collection of data has lowered barriers and made it more accessible to a larger audience. “There's a certain tipping point of the technology that is helping people claim data, which in turn will significantly boost the value people can extract from external data for their customers,” Hookey explained.

Overall, this is good news that will lead to better business outcomes. Enterprises no longer need special relationships, access, or privileges to create a rich data ecosystem. 

However, these changes have also shifted the dynamics that govern markets for external data. Massively increased access has meant that data providers are facing greater competition and lower profit margins for individual data products. Overall, Hookey expects this to increase revenues for data providers, because companies will be using more data.  

“Look to Netflix and the way that changed the dynamics for the movie studios,” Hookey said. “Obviously, in the short term, it caused a lot of flux and some real challenges.” Over a longer period of time, consumers were given more options for streaming video, and they now spend more time watching it.

“It's the same in the world of data,” Hookey said. “People are consuming a lot more than they used to, and that's good for everyone.”

Incumbents that have dominated external data markets can no longer rely on captive audiences and high switching costs; consumers are now using data exchanges like the Snowflake Data Marketplace, the AWS Data Exchange, and the Demyst platform, where they can leverage the unique strengths of multiple datasets. 

Clients have become more sophisticated, combining data from multiple providers for clearer business insights. One example is the way that financial institutions are managing fraud risk. 

“People used to just talk about fraud,” Hookey said. “And now they talk about getting into the weeds of all of the specific, different types of fraud.” 

When data products specialize in fighting specific types of fraud — like synthetic fraud or first-party fraud — they can be less effective at fighting other types of fraud. The democratization of data means that financial institutions can apply multiple products simultaneously, delivering the best results for their specific needs. 

External data’s tipping point will deliver a larger selection and lower costs for consumers, while data providers will see greater volumes of transactions and enough competition to keep them from getting complacent. 

According to Hookey, “It depends on the data source, and it depends on the quality, and that means it's a marketplace where the value goes more to the people that have high quality products.”

View the full recording of this presentation on Demyst’s website.