Alternative data budgets boom as AI reshapes FinTech in 2025

By Puja Sharma

The alternative data market has entered a decisive phase in 2025, reshaping how financial institutions, asset managers, and FinTech players generate insights. According to Neudata’s “Future of Alternative and Market Data” report, spending on alternative datasets is not only expanding but also diversifying across geographies and fund strategies, with nearly 89% of buyers expecting their budgets to increase or remain steady this year. This optimism underscores the growing role of non-traditional datasets in the decision-making fabric of global finance.

Budgets on the Rise

The report highlights that alternative data has become a staple, no longer confined to niche quantitative hedge funds. Buyers are subscribing to an average of 19 alternative datasets annually, with budgets ranging from under $250,000 to more than $10 million. The appetite reflects a shift: institutions are seeking richer, more granular insights into consumer behaviour, supply chains, and macroeconomic shifts. By contrast, market data budgets have stabilised, with most buyers reporting flat or modest growth. This divergence suggests that while market data remains foundational, the real growth engine lies in the alternative space.

Pain Points Remain

Despite this momentum, challenges persist. Price negotiations top the list of barriers, cited by 58% of buyers. Trial structures are another sticking point, with only a quarter of dataset trials converting into paid subscriptions. Quality concerns remain high, as buyers often find that live datasets differ significantly from trial versions. For FinTech firms looking to monetise their datasets, this signals the importance of building transparent pricing and robust trial-to-subscription pathways. Once a dataset is embedded, however, it tends to stick, with high renewal rates across the board.

The AI Inflection Point

Artificial intelligence is the other major thread running through this year’s findings. AI adoption by data buyers has nearly doubled in a year, with 66% using AI to improve internal efficiency and 49% deploying chatbots. More significantly, 31% are now using AI-processed data to optimise investment strategies, up from 14% in 2024. This sharp uptick reflects AI’s migration from back-office experimentation to front-line portfolio tools. Yet the report also uncovers a knowledge gap: many respondents remain uncertain about the specifics of their firms’ AI deployments.

For FinTech innovators, this duality represents both an opportunity and a caution. While AI-enhanced datasets can command premium pricing and drive adoption, success will depend on transparency and explainability. Black-box models remain a non-starter in financial services, where compliance and accountability are paramount.

Shifting Data Priorities

Information technology datasets have emerged as the most in-demand category this year, followed by consumer discretionary and financials. This marks a notable shift from 2024, when consumer-focused data dominated. The pivot reflects the investment community’s search for clarity amid macroeconomic volatility and the disruptive influence of AI on global industries.

Taken together, the findings paint a picture of an industry at an inflection point. Alternative data is moving from experimental to essential, powered by AI and driven by investor demand for deeper insights. For FinTech providers, the challenge is clear: address the pain points of price, quality, and trials, while seizing the momentum of AI and thematic shifts. In doing so, they can cement their place in an ecosystem that is not just expanding, but redefining how financial intelligence is built in 2025 and beyond.