2022 Outlook: Market Technology Trends in Asia

As a technology partner to many of the leading market infrastructure operators and several digital asset marketplaces in Asia, Nasdaq experienced another eventful year in 2021. The Covid-19 pandemic continued to impact us all. We have observed intensified focus on digital assets with rising adoption among institutional investors, as well as continued exploration of emerging technologies that enable robust and agile business expansion as well as flexible scalability. 

Although we have seen many trends emerge in the past year, there are three trends that I would like to highlight that will continue to be crucial for Asia during 2022. 

Institutionalization of Digital Assets

We continue to see growing interest in digital assets, both in cryptocurrencies and in the creation of marketplaces for new asset classes such as carbon credits and real estate tokens. Several countries in the region, including Singapore, Thailand, Japan, and Korea, have been progressive in defining regulatory frameworks and licensing programs for cryptocurrencies and digital assets. 

With growing interest from institutional investors and record-breaking trading volumes in cryptocurrencies in 2021, with an all-time high in May of $2.23 trillion traded across the largest crypto exchanges’ spot markets, many digital asset marketplaces are focused on improving the scalability of their infrastructure and trading platforms to ensure robust operations through volatile trading conditions. In addition, they see the need to implement efficient controls and automated processes that ensure market integrity and fairness. This includes incorporating market surveillance tools to detect and prevent potentially manipulative behavior that risks damaging confidence in the market. Robust infrastructure and market integrity will be key to success in the battle for market participants in the digital asset space. 

Modernization of Core Infrastructure 

Market infrastructure operators in Asia continue to modernize their core market infrastructure as they take a proactive approach to business and technology resiliency. At the onset of the Covid-19 pandemic in March 2020, volatility and trading volumes reached new highs. At Nasdaq, we processed more than 60 billion messages per day in our U.S. options market alone. Similarly, other marketplaces around the world also experienced huge spikes. Some of our Market Technology clients have grown their trading volumes more than three-fold in the past years. Experience tells us how important it is to be able to quickly and flexibly scale capacity. At Nasdaq, for example, we make sure to plan for more than twice the capacity of the highest trading volumes across all our clients’ marketplaces.

Additionally, the shift to remote work and virtual collaboration at the beginning of the pandemic created a new work environment for us, our clients, and many others alike. Market operators had to identify and adopt new tools and processes to address the challenges associated with the shift to remote work while still ensuring robust operations. This shift has accelerated many market infrastructures’ digitalization journeys as they look for the best ways forward to modernize their core enterprise architecture. 

Further insights can be found in the report CIO Market Infrastructure Survey 2021 – The Digital Journey to 2025 conducted by Celent and Nasdaq. The interview-based report highlights the top three drivers behind the transformation of core infrastructure: enhanced resiliency, improved customer experience, and new lines of revenue. The study also shows that an increasingly important part of CIOs’ strategies involves cloud operations, which brings me to the third trend I want to highlight. 

Leveraging Cloud Computing and Managed Services to Support Business Development

We have seen market operators monitor the development of cloud-based managed services for a while, and the adoption of this will continue to evolve during 2022. Market infrastructure operators continue to focus on innovation, leveraging emerging technologies, and decreasing time-to-value for new technology and infrastructure initiatives. Our clients want to ensure they can focus resources on developing their core business and expanding into new opportunities. They can do that whilst having a trusted technology partner that manages the technology operations and day-to-day support. 

Singapore, as well as the rest of the Asia region, has long been at the forefront of technology innovation. Marketplaces and their regulators in the region inspire conversations in other parts of the world to drive standardization and breakthroughs across the industry. In the year ahead, we look forward to embracing new technologies to ensure resiliency and collaborating with our industry partners for the betterment of the ecosystem in Asia and beyond.  

Other Topics

Market Infrastructure FinTech Cryptocurrencies

Virginie Barbot

Nasdaq

As Head of South East Asia at Market Technology, Virginie Barbot is responsible for Nasdaq Market Technology’s business in the region, supporting market infrastructure operators and clients in other industries beyond capital markets in their technology journeys. 

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