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The world of capital markets is expanding its technologies, looking beyond industry walls, and leveraging technology in their core infrastructure to solve problems and accelerate innovation.

Nasdaq’s 2019 Technology Trends Report

January 23, 2019


The world of capital markets is expanding its technologies, looking beyond industry walls, and leveraging technology in their core infrastructure to solve problems and accelerate innovation.

There are five key technology trends this year that will shape the world of markets, including exploring innovative technologies born out of other sectors, utilizing open source modeling, addressing the demand for data-driven solutions, and the “platformification,” or the bundling of products and solutions to generate new customers and revenue streams, and tapping the cloud to host proof of concepts, which works around typical internal IT procurement and development cycles, according to a new Nasdaq report, titled, “Nasdaq Decodes: Tech Trends 2019 – The technology trends that are driving the world of markets forward.”

“Financial firms are leveraging innovative and potentially disruptive technologies to increase efficiency, reduce costs, enhance security, improve the customer experience, generate revenue and facilitate regulatory compliance,” Brad Peterson, Chief Technology and Information Officer at Nasdaq, and Lars Ottersgård, executive vice president and head of Nasdaq’s Market Technology business, said in the report. “Many of them are already building cloud, machine learning and AI, blockchain and cybersecurity technology into their strategy.”

The capital markets industry, which pioneered machine-to-machine communications technology, is now looking at other sectors to learn how to take such technology to the next level. For instance, the Internet of Things (IoT) has moved machine-to-machine communications into agriculture and supply chain management. Now, financial firms are using the reverse technique, identifying technology in other sectors and leveraging their own technology architectures to enhance their offerings.

More companies are also investing in open source technology, which provides community problem solving and differentiation.

“The open source model enables companies to tap into a community dedicated to building modern software, and to align with vibrant, active projects,” the report said. “As such, companies can accelerate innovation on the differentiating parts of their platform while leveraging the underlying foundational innovation of the broader open source community.”

Given that open source would make it easier for exchange customers to access data in real-time, Nasdaq plans to contribute to a select group in the open source community.

Recent cloud product offerings, many of which support open source in addition to enterprise software, have been paramount in the advancement of time series database integration and the introduction of parallel streaming, which gives “companies a comprehensive view of activity like never before,” according to the report. Although there are concerns about regulatory compliance and data residency, some global players are moving toward a multi-cloud offering. The tendency among firms is to adopt the leading cloud provider in their region along with a second one. That said, many financial firms still operate in what is called a hybrid cloud mode, which focuses on the connection between one cloud provider and internal data centers.

The adoption and growth of cloud offerings support “platformification,” in which products are being bundled together and monitored to see how customers interact with them to deliver a differentiated customer experience.

“[Platformification] could generate new customers and revenue streams,” the report said. “Marketplaces of all sizes can launch solutions in the cloud with an extremely lean IT setup, minimal capital expenditures and optimal operational expenses.”

Read the full report here.

Source: Nasdaq