In this years’ Investor Presentation from April 2020, Adena Friedman, CEO of Nasdaq highlights some of the priorities for the National Association of Securities Dealers Automated Quotations, in short: NASDAQ – underlying the continuing drive to offer a technology solution as well as a home to almost 4,000 listings. As the world’s first electronic stock market which has helped develop technology powers for many other marketplaces including Switzerland amongst others, Nasdaq is both an exchange as well as a tech firm.
“Nasdaq was founded on the idea that people do not need to be in the same physical place to be part of the same community. This founding principle continues to drive us as we face the unexpected.” Adena Friedman
Many of our readers will know Nasdaq more for stories like Zoom’s 2019 IPO on the Philapelphia-based exchange, some may know it as a Stock Exchange where Fintech leaders like Fiserv and PayPal are listed, and others may just know it as a large employer in cities like Vilnius and Philadelphia. But did you know that there are some Chinese companies listed on the exchange too? 9F, the Chinese financial services and tech company listed on Nasdaq back in August 2019. Current US Politics might put this type of activity under more scrutiny, but the trend shows how ambitious Nasdaq’s plans are to ensure they entice global tech firms onto their exchange.
The Chief Economist of Nasdaq, Phil Mackintosh believes that the IPO market is recovering and goes on to add that: “Year-to-date, the market brought 76 new companies to market, adding around $22 billion in new market capitalization. Continuing our trend from last year, Nasdaq represents well over half of these companies (49) and assets raised.”
Jill Malandrino, Global Markets Reporter @Nasdaq and Host of @TradeTalks #PIC #TradeTalks interviews Mark Marex, Specialist, Nasdaq Index Research & Product Development where the magic 10,000 mark hit by Nasdaq last week is covered. Jill is a specialist at making catchy and interesting economic briefs for both the market and investors. Jill and Phil Mackintosh often have discussions with eachother in some of the #TradeTalks and its’ well worth following Jill (and Phil) on Twitter if you want to stay on top of some of the global challenges in Blockchain, Gold, ETFs, Market trends, and almost anything financial and fintech that you could think of! For a full link to the interview please follow the link from Twitter below:
However, we do like to focus on the Tech side of things here at #DisruptionBanking, and back in 2017 Nasdaq hit the news for buying eVestment, a content and analytics provider used by asset managers, investment consultants and asset owners to help facilitate investment decisions. The deal enhanced Nasdaq’s Global Information Services business:
Today eVestment has become an integral part of the Nasdaq Financial Framework – even keeping its’ unique identity while being part of the larger group. Nasdaq continued by acquiring further companies, adding an influential data and core financial data provider who already worked with 8 of the top 10 hedge funds and 14 of the top 15 largest banks – Quandl
Then Cinnober, a long-standing and solid solutions provider to leading trading and clearing venues, based on the TRADExpress platform, was acquired by Nasdaq. Cinnober works with many large exchanges including the NYSE. 3 more acquisitions in Sybenetix, Solovis and One Report are all listed in the Investor Presentation and show an ambitious and technology-driven approach to the strategy of Nasdaq in the near future. To highlight the nature of these acquisitions Solovis released a statement back in March stating “This acquisition allows Solovis to continue to operate as the agile, innovative company that has disrupted the status quo in institutional investing.”
The NFF Platform is pitched to Future Proof your business, as an Agile partner helping you with Change, something that can be Integrated with your systems, and as a stable and secure platform that even offers blockchain as part of the functionality, this video covers a lot of the specifics of how this platform is positioned:
Much like in the case of Black Rock, that #DisruptionBanking covered last week, Nasdaq have been putting more focus into ESG (Environmental, Social and Governance) Climate with a new initiative called Nasdaq ESG Footprint. In fact, the acquisition of OneReport back in February 2020 was specifically to accelerate the delivery of Nasdaq’s ESG reporting and wokflow solution. So it should be no surprise that James Mckeone, Head of European Data at Nasdaq said last month about Nasdaq’s new partnership with Nordea: “As a major European bank and also a global leader within sustainable finance, Nordea is a perfect partner to bring Nasdaq ESG Footprint to a broad range of private investors that look for a way to add sustainability to their investment decisions and advice.”
It is quite exhausting reading and relating how much is going on at Nasdaq and how much innovation the teams there are rolling out. Exhausting, or exciting, and some might suggest a dream environment for a CTO in most Banks with such a plethora of new technologies joining the Nasdaq portfolio. Keep reading a little longer though.
“Nasdaq is ‘blockchain agnostic’ ”, explains Johan Toll of Nasdaq to Forbes, “meaning that we partner with several blockchain providers and we have partnered with both R3 and Symbiont for different purposes.”
Apart from Blockchain helping Nasdaq’s strong involvement in the wealthtech sector, the list of ambitious technological partnerships continues with Frank Fallon, Vice President, AWS Sales, Financial Services, Amazon Web Services, Inc sharing that: “Nasdaq’s use of the cloud continues to transform the client experience and its own internal operations.” It’s worth noting that Nasdaq have co-operated with Amazon Web Services since as far back as 2010, one of the first companies who explored this cloud solution when Amazon had only just started to reach out to the market.
In the Nasdaq 2020 Tech Trends report released back in January – Brad Peterson, Executive Vice President and Chief Technology & Information Officer and Lars Ottersgard, Executive Vice President and Head of Market Technology share their thoughts about three key trends that they believe has led us to today. Reading the report is a very good guide to understanding the priorities needed for a business like Nasdaq to stay ahead.
We highlighted some of the more relevant parts of the Report below:
“At Nasdaq, we believe M2M (machine-to-machine) communication, ML, AI and the supporting tools and technologies are important because they can help us to measure, monitor and understand what is happening at scale and high speed. We are using ML and AI to process vast data volumes created by machines and deliver valuable insights about tradeable assets. Externally, our clients have automated trading, but increasingly we expect them to track the data as they make decisions and evolve their systems to the next level.”
“The landscape is evolving around vertical integration across the ledger, smart contracts and business application layers on top, and now the cloud vendors are introducing blockchain-as-a-service solutions. Notably, it is interesting that large banks are building capabilities in the institutional trading and custody of crypto-assets.”
The report goes on to spend substantial time considering Apache Kafka, an open source streaming platform that was originally developed by LinkedIn. RPA with tools such as ServiceNow, “Serverless compute” to compliment cloud providers, and “Low code no code” for APIs.
Let us return to Johan Toll of Nasdaq again who shares: “Since the mid-2010s, we at Nasdaq have conducted numerous projects and proof-of-concepts embracing distribute ledger technologies that push our industry forward while safeguarding a highly-regulated market.” Importantly, Johan goes on: “Generally, market participants feel comfortable with the technology behind digital assets, they’re confident that it’s mature enough, and they’re preparing to be part of the transformation.”
With all this technology and supporting content it would seem extremely prudent then that Nasdaq Ventures start investing in companies in the automated financial crime investigation area. Caspian’s CEO, Chris Brannigan, shared his thoughts in a recent press release: “Caspian’s proven solution solves a huge pain point in the industry, dramatically increasing analyst productivity and resulting in meaningful cost-savings for bank compliance teams. Our machine learning technology is validated through production use at global financial institutions, making risk decisions that are fully explainable and regulator friendly. Through the investment and partnership with Nasdaq we are excited to expand our offering at a global scale.”
You see, the more one reads the content that Nasdaq so efficiently share through their Twitter, YouTube and website, the more one realises that Nasdaq may just have got it. They have not only invested heavily into digital solutions, but they have invested in companies that provide content as well. They not only help Unicorns to be listed on their exchange, but they both acquire and invest in Unicorns and “Soon”-icorns too. Nasdaq may be a benchmark for lots of companies for the future. Being part of Nasdaq’s community appears to be a place that Unicorns should flock to, will you?
And just in case you didn’t think that Nasdaq was cool enough, Motley Fool, one of the disruptors we respect the most here at #DisruptionBanking, is also involved with Nasdaq’s drive to create best-in-class content:
Author: Andy Samu
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