NEW YORK and STOCKHOLM, Sweden, June 26, 2018 (GLOBE NEWSWIRE) -- During its biennial Technology of the Future
conference in Stockholm, Nasdaq Inc. (Nasdaq:NDAQ), in collaboration with Celent, today revealed the results of a new study of market infrastructure (MI) senior
technology and strategy officers that uncovered three important trends: the factors that are driving changes in market
infrastructure, how MIs are using technology to support business strategies and how technology spend is evolving.
The report was conducted through in-depth discussions with C-suite executives (including CEOs, COOs, CTOs, CIOs and Heads of
Strategy) representing 20 different MI organizations across North America, Europe, Middle East, Asia, and Latin America.
“As market infrastructure operators, our economies are reliant on us to provide a seamless ability for buyers and sellers to
come together in a fair environment, find the right price, and trade instantaneously. Technology is the lynchpin of this
ecosystem,” said Brad Peterson, Chief Technology & Chief Information Officer, Nasdaq. “Our study has shown that nearly all
executives interviewed worldwide are looking across borders and embracing the global interconnectedness of our markets. They are
tapping technologies such as cloud, APIs, and machine intelligence, while also recognizing the inflexibility and limitations of
legacy systems in achieving goals around business expansion and technology scalability. We believe this is a welcomed step in the
right direction for the health and longevity of our economies.”
“The market infrastructure providers that will stay relevant in the digital age must be agile and flexible players that are not
afraid of change,” said Josephine de Chazournes, Senior Analyst at Celent and co-author of the report. “They have to be able to
reinvent themselves in adjacent businesses, and grasp opportunities even if they are not in their DNA.”
“The promised land of digitized capital markets infrastructure does not come without new risks - cyber risk is already a big
concern, while money laundering, fraud, and market abuse risks are growing,” said Arin Ray, Senior Analyst at Celent and co-author
of the report. “It will take industry wide efforts to mitigate the risks.”
The key takeaways from the study include:
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/89d2c87d-0428-4c8a-94a9-e5d4c278069b
- Technology is playing an increasingly important role in supporting growth plans. From 10% to
50% of MIs’ technology budgets is spent to change the legacy technology and innovating vs. 90% to 50%
for the maintenance of systems. The bigger the player the more already amortized are the maintenance costs and thus the split
tends to be closer to 50%-50%.
- Data and analytics are becoming major revenue drivers, and all MIs surveyed are transforming data management
practices with plans to offer new data solutions and delivery options such as data-as-a-service. The next goal is to develop
advanced analytical tools with AI and machine learning (ML) to create new solutions for investment decision support, risk
management and compliance.
- There is tremendous interest in adopting new technology such as cloud, artificial intelligence (AI), machine
learning (ML), and distributed ledger technology (DLT) because they can help develop innovative solutions, new business models,
and contribute to significant operational improvements. New solutions are being developed with of one the new technologies (open
architecture, cloud enabled, and/or application programming interfaces (APIs)), or at least with provisions to easily incorporate
them in the future by 95% of market infrastructures surveyed.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/ab9b7f2f-093c-481b-b2cb-3c87c489d597
- Cloud adoption is becoming mainstream for all participants in our discussion except only one, with
40% already using cloud in some (non-core) functions, and an additional 45% working on pilots.
Many large players are finalizing their cloud partners and strategies, and smaller players expect their vendors to deliver the
promises of cloud to them. Data privacy and sovereignty issues are a challenge for some players, and clearer regulations and
industry standards will be needed for expediting cloud adoption for production data.
- Artificial intelligence is gaining prominence with leading MIs developing advanced analytical offerings with
AI and ML and leveraging the cloud. It is also being used in operations, especially in risk management for surveillance, fraud,
and cyber-risk monitoring. Data management and model governance issues can be challenging for some MIs in adopting AI, and many
are using AI-enabled solutions from leading international vendors. In the study, 35% of all institutions
mentioned they are already using AI, and an equal share working on pilots. On the other hand, robotic process automation (RPA),
which is a simpler and more cost-effective technology to automate manual processes, is widely used, and its adoption is growing –
70% of discussion participants mentioned they are already using RPA.
- Distributed ledger technology promises to be transformative, especially in post-trade market infrastructure,
and almost all players are involved in DLT development projects through partnerships, joint ventures, and industry consortia.
Numerous use cases of DLT are emerging in peripheral functions. Because it is still a new and complex technology, not every MI is
able to experiment with it individually, but 70% of MIs in the study sample are involved in accelerators,
pilots, or industry consortia.
- Market infrastructure players are increasingly looking for third party solutions because they are cost
effective, and compliant with the latest standards and regulations. In core MI functions, there is growing preference to buy and
customize third party solutions instead of reinventing the wheel.
- Cyber-risk is the biggest concern for market infrastructure providers. Indeed all the respondents cited it
as such. As MIs engage more with third party providers and fintech startups, everyone in the ecosystem must improve their
cyber-security measures, because the system is only as strong as its weakest link. Despite growing recognition of the risks, few
are taking concrete steps to address them. It will take industry-wide efforts to overcome these challenges because the new risks
will be hard to mitigate by acting in isolation.
To download a copy of the study, please visit here.
About Nasdaq
Nasdaq (Nasdaq:NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public
company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business
vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital
markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50
countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market
value of approximately $13 trillion.
About Celent
Celent is a research, advisory, and consulting firm focused on financial services technology. We help our Clients make better
decisions about technology. Celent publishes research identifying trends and best practices in financial services technology and
conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or
launch new business strategies. With a team of internationally-based analysts, Celent is uniquely positioned to offer strategic
advice and market insights on a global basis. Celent is a division of the Oliver Wyman Group, which is a wholly owned subsidiary of
Marsh & McLennan Companies (NYSE:MMC).
For Media Inquiries:
Nasdaq
Ryan Wells
ryan.wells@nasdaq.com
Direct: +44 (0) 20 3753 2231
Mobile: +44 (0) 7809 596 390
NDAQG
