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Central Banks’ Use of Alternative Data: Insights from the Economics Benchmarks 2022 Survey, (from page 20221218.)

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Summary

A recent survey of central banks revealed that 81% of the 32 respondents utilize alternative data sources in their operations, notably Google search data. However, scanner data is the least utilized, with only 6% of institutions using it. These alternative data sources are applied in various official roles, including forecasting and scenario analysis.

Signals

name description change 10-year driving-force relevancy
Increased Use of Alternative Data by Central Banks Central banks are increasingly utilizing alternative data sources for research purposes. Shift from traditional data reliance to incorporating alternative data sources for analysis. In 10 years, central banks may heavily rely on diverse alternative data for economic forecasting. Growing availability and importance of alternative data in economic analysis and decision-making. 4
Google Search Data for Economic Research A majority of central banks use Google search data for supporting their research. Transition from conventional data methods to integration of Google search data in economic studies. In 10 years, Google search data could become a standard tool for central banks in research. The increasing relevance of real-time data in understanding economic trends and consumer behavior. 5
Low Adoption of Scanner Data Only a small percentage of banks use scanner data, indicating limited traction. Shift from underutilization of scanner data to potential growth as its relevance is recognized. In 10 years, scanner data might find increased use as banks explore more data avenues. The need for comprehensive data sources to enhance economic analysis and forecasting. 3

Concerns

name description relevancy
Reliance on Alternative Data High reliance on alternative data sources like Google searches may lead to inaccurate economic forecasts. 4
Data Privacy and Security Using alternative data raises concerns about data privacy and the security of user information. 5
Equity in Data Access Limited access to alternative data sources could create disparities among central banks and affect their decision-making. 3
Misinterpretation of Data The potential for misinterpretation of alternative data could result in poor policy decisions. 4

Behaviors

name description relevancy
Use of Alternative Data Sources Central banks increasingly rely on alternative data, like Google search data, for improved research and analysis. 5
Integration of Technology in Banking Research The incorporation of technology and digital data into traditional banking research practices is becoming more prevalent. 4
Data-Driven Decision Making The shift towards using data analytics in forecasting and scenario analysis showcases a trend towards data-driven decision-making. 5

Technologies

description relevancy src
Usage of non-traditional data sources like Google search data for research and analysis in central banking. 4 cd782a2ff57b412ca4648658d822a401
Leveraging search trends and patterns to inform economic forecasting and scenario analysis. 5 cd782a2ff57b412ca4648658d822a401
Utilization of scanner data as an alternative data source, although currently underused by central banks. 2 cd782a2ff57b412ca4648658d822a401

Issues

name description relevancy
Use of Alternative Data by Central Banks Central banks increasingly rely on alternative data sources, such as Google search data, for research and analysis. 4
Underutilization of Scanner Data Scanner data is notably underused by central banks, indicating potential for future exploration and integration. 3
Impact of Data Accessibility on Research Access restrictions on data content may limit the ability of central banks to utilize alternative data effectively. 3