Data monetization increasingly drives investor decisions, Brunswick survey finds.
71 percent of investors and analysts surveyed believe that data will become a core factor driving investment decisions, up from 66 percent in 2014
One in five say cybersecurity is a top factor for acquiring companies to investigate before an M&A deal
WASHINGTON, D.C., November 9, 2015 - Brunswick Group LLC, an advisory firm specializing in critical issues and corporate relations, today released the results of its second survey examining the growing influence of corporate data and cybersecurity on investment recommendations and decisions since the initial benchmark was set in 2014.
This year’s survey found that the global investment community in the U.S., the UK, Europe, and Asia increasingly places a premium on companies that are best able to monetize the data they collect, even during a period of market instability. Since 2014, data monetization’s impact on investor decision has increased by seven percent, with 41 percent of those surveyed indicating an effect. In addition, almost one fifth of analysts surveyed believe that a company’s ability to monetize data is the single most important driver of investments, a four percent increase since 2014.
Cybersecurity is increasingly significant for investors, to the point where it was selected by nearly 20 percent of respondents as a top-five issue acquiring companies should investigate when evaluating a deal. Increased expectations of corporate leadership to prioritize cybersecurity underscore its growing importance in the corporate landscape. Seventy-six percent of global analysts expect senior managers and Board members to understand the impact of cybersecurity on their business. Further, analysts ranked the C-Suite’s need to understand cybersecurity risk as on par with its importance for companies’ IT teams, illustrating the degree to which data protection has moved onto Boardroom radar.
“There is a clear expectation from investors and analysts that companies must capitalize on all available assets, and data is one of the largest asset groups,” said Mark Seifert, co-founding partner of Brunswick’s U.S. Cybersecurity & Privacy practice group. “However, this data premium comes with an expectation that companies will protect these valuable assets, and, therefore, analysts’ investments. More than ever, executive teams and Boards of Directors are expected to have substantial knowledge of cybersecurity risks as well as how to mitigate potential losses.”
The findings underscore the significance of data concerns for investors, especially given the market turbulence at the time when Brunswick conducted the 2015 survey. Despite the downturn, the future role of data in investment decisions increased compared to 2014, particularly in Asia, where 55 percent of investors perceived the ability to monetize data as important, the highest of the four regions surveyed.
Key findings from the survey include:
- Rise in investment decisions based on the data premium:Investment decisions based on data valuation metrics are occurring more often than they did in 2014 with increases in areas including the ability to monetize data, usage of big data, and the level of security placed on customer data.
- Cybersecurity’s importance to M&A: One in five say cybersecurity is a top factor for acquiring companies to investigate before an M&A deal.
- Data protection increasingly crucial: 80 percent of investors believe that the past couple of years demonstrate the increased importance of protecting data, a five percent increase since 2014.
- Financial services at greatest cyber risk: Investors agree that the financial services industry is at the greatest risk.
- Data premium lags in Europe: Investors in the U.S., UK, and Asia are significantly more likely to make an investment decision due to data monetization compared to investors in the Europe (59 percent, 49 percent, 48 percent, and 18 percent, respectively).
The survey was distributed and analyzed by Brunswick Insight and included the views of 207 buy-side investors and sell-side analysts across the U.S., U.K., Europe, and Asia. Brunswick Insight is Brunswick’s specialist opinion research practice, focused on understanding the views of opinion formers around the world. For more information on Brunswick’s Data Valuation Survey, please visit www.brunswickgroup.com/publications/surveys/global-data-valuation/
About Brunswick Group
Brunswick is an advisory firm specializing in critical issues and corporate relations. Founded in 1987, Brunswick is an organically grown, private partnership with 23 offices around the world.