Nasdaq CEO Adena Friedman On Next-Gen Investing
Technology is undoubtedly changing how we invest. From the novice investor to the established portfolio manager, tech’s influence in our daily financial services routines cannot be underestimated or overlooked. Alongside this, the role of US exchanges and trading platforms is evolving as well. As markets mature and embrace new technologies, established players are looking to the future with an eye on what continues to drive the shift.
So what’s ahead? For an executive-level view, we followed Nasdaq’s CEO to Brooklyn this month to find out.
Adena Friedman, Nasdaq’s president and chief executive officer, shared a stage with Vlad Tenev, cofounder of Robinhood, the NYC-based company that provides commission-free investing and trading services, at Bloomberg’s first “Sooner Than You Think” event held in New York City. Industry executives, entrepreneurs and investors convened in Brooklyn to talk everything finance and technology, from crypto currencies to impact investing.
While Friedman and Tenev oversee starkly different businesses, they both agree that the future of trading and investing is evolving, mainly due to advances in financial technology.
Friedman spoke on the importance of the public markets and making such markets more attractive, accessible and appealing to private companies. “How do you encourage long-term thinking?” she asked, when discussing potential ways of encouraging IPOs and coming-to-market strategies.
Among one of many areas she and her team at Nasdaq are examining is the current regulatory landscape. Working through regulations, taking the fear factor out of accessing the capital markets, and working with companies through their growth cycles are some of the keys to achieving this.
Access To Capital
There are benefits to . Despite there being a historic amount of venture capital funding available today, there are multiple important reasons for wanting to take a company public—access to growth, corporate strategy, wealth generation and job creation, to name a few. “Our objective,” Friedman said of Nasdaq, “is to make the public market appealing. Companies should be looking at IPO’s as the next phase in their life cycles.”
Working with Washington is one way to ease the hurdles private companies may be concerned about. It’s hard to change mindsets, but there are also ways to make it “less onerous” for companies.
Robinhood has previously announced their intention of one day going public, Tenev told the crowd. But there are tradeoffs, he said, when asked about how much longer the company will remain private. Capital is widely available and private companies are taking advantage of this. But these needs tend to evolve. Having access to permanent capital is one major advantage to going public, but they would vary from company to company.
Markets Everywhere
With a customer base that spans the globe, Nasdaq’s technology is positioned to be leveraged in multiple ways and across multiple industries. Venturing into new areas such as crypto or token trading presents an opportunity for Nasdaq’s technology to enter the field. To date, the company’s expertise and technology is being utilized by at least six new platforms. Working with newer players, Friedman notes, allows Nasdaq to be a market leader in guiding new companies, while positioning itself among upstarts as a trusted partner.
Markets today and investing activity are undoubtedly more and more electronic, opening up opportunities nearly everywhere. And to that end, “there is a balance,” Friedman explained.
US equity trading, for example, which seeks the most reliable and affordable ways in executing transactions, remains high on the Nasdaq market. An investor with proper access can execute a trade if the right tools are present. At the same time, technology has enabled the upstarts to remain a viable option. Without the legacy infrastructure, new platforms are able to move quicker and be more agile in their offerings.
This is largely in part to the electronification of markets. Not only has it opened up access to millions of investors and increased participation in the capital markets, but now established market leaders like Nasdaq can reach more people in more locales.
A Global Business
Nasdaq today remains a growing global business that continues to expand on its market position, legacy and tech saviness. Serving the capital markets both in the US and the Nordic countries, for example, Nasdaq remains keen on attracting new business while providing its core technology to clients around the world.
The advantage? Opening up more markets to more consumers. From cloud-based solutions to cutting-edge blockchain offerings, various industries are turning to Nasdaq’s technology to grow and enhance their businesses worldwide.
For example, one area of opportunity is price discovery. Opening access via discovery across industries is just one way Nasdaq’s offering has grown into a “next generation” business.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.