Alternative Data – A COSO perspective
What is alternative data? Altdata generally is understood to include information about an organization that is available outside of traditional financial and regulatory reporting channels, press releases, or other authorized materials. It includes data about an organization and its operations that the organization makes public or otherwise discloses to third parties knowingly or unknowingly. Altdata […]
Nicolas H.R. Dumont, Dave Navetta and Michael Egan are Partners at Cooley LLP. This post is based on a Committee of Sponsoring Organizations of the Treadway Commission (COSO) memorandum by Mr. Dumont, Mr. Navetta, Mr. Egan, and Ryan Blair.
What is alternative data?
Altdata generally is understood to include information about an organization that is available outside of traditional financial and regulatory reporting channels, press releases, or other authorized materials. It includes data about an organization and its operations that the organization makes public or otherwise discloses to third parties knowingly or unknowingly. Altdata has no standard definition provided by industry groups or regulators, and as such the definition remains inherently fluid. Common sources of altdata include e-mail, information from mobile devices and apps, payment card transactions, geolocation data, social media information, sensors, web-scraped data, internet traffic, Internet of Things-based devices, satellite data, point-of-sale information, and rewards programs. This list is not exhaustive: as the volume of data produced by organizations rises, so too does the volume of altdata, absent operational or definitional reframing.
Every organization needs to be aware that altdata about them is widely collected. Altdata is commonly collected and used to identify patterns and obtain insights relevant to or about a target industry, company, or user-base. It is leveraged to gain market intelligence and advantage by using multiple available data points to extrapolate timely and valuable information.
