2022 Outlook: The Key Technology Trends Impacting Market Infrastructure Operators Globally
Throughout 2021, we saw the second year of COVID-19 being a dominant force in the financial markets, the global economy, and all of our lives. Exchanges continued their focus on resiliency in their mission to ensure that their markets have the appropriate capacity to operate during times of record-breaking volumes and intense volatility – and overall, the global market infrastructure kept up well. At Nasdaq, during the pandemic, we’ve processed new record volumes of up to 120 billion messages in a 12-hour period in the data lake for our own markets.
One highlight for Nasdaq during 2021 was the announcement of the multi-year partnership we established with AWS to redesign the next generation of capital market infrastructure. This is the next step on the journey to the cloud that we embarked on over a decade ago, starting with foundational data storage, reporting, and billing workloads. Since then, we’ve systematically moved closer to the matching engine, and now we’re moving workloads with ultra-low latency requirements to the cloud. Starting in 2022, Nasdaq plans to migrate our North American markets to AWS in a phased approach, starting with Nasdaq MRX, a U.S. options market. Nasdaq will leverage AWS Outposts – which extend AWS infrastructure, services, APIs, and tools to virtually any data center, co-location space, or on-premises facility – within a new edge computing solution, co-designed by Nasdaq and AWS and specifically developed for market infrastructure.
Cloud at the Front and Center for Many CIOs
Through the partnership with AWS, Nasdaq seeks to power a truly cloud-based market infrastructure that is more resilient, scalable, and accessible for all market participants. We expect the cloud migration to enable the adoption of new services and products in a manner that unlocks value and provides our clients with added flexibility and scalability.
Nasdaq is certainly not alone in embracing cloud computing as the future for market infrastructure operations. A survey conducted by Nasdaq and Celent in 2021 showed that CIOs and CTOs want to take an innovative approach to improve their organization’s agility and time to value. Increasing the adoption of cloud technology and micro-services are viewed as key enablers to add agility and serve client demand. According to the survey, the number of cloud-ready applications across global market infrastructure will increase by nearly 30% over the next four years.
As a driver of capital markets technology evolution, we are focused on fueling collaboration and innovation to power and transform the next 50 years of our industry. We will leverage our own markets’ cloud journey and the collective technology portfolios of our partnership with AWS to create a migration blueprint to support our market technology community and clients in their journeys, using a combination of public cloud and edge compute options.
Consumerization of Service Interactions
While we’ve seen and continue to see substantial investments in the modernization of market infrastructure, it’s not just about the backend architecture. Now market infrastructure operators are planning for the next phase, which involves implementing digital interfaces for trading firms and other clients to make interactions more efficient. We’re seeing the consumerization of service interactions, driven by changing expectations among clients and the potential to operate much more efficiently. This means that we will see the introduction of more APIs and workflow tools.
In response to this evolution, we launched our digital service portal called Nasdaq Client Connect in 2021. The portal allows exchange and clearinghouse members to log in, or connect via a REST API, to access their data and configurations, and efficiently interact with service teams. Empowering clients with secure access to self-services and a real-time view of data and settings means that manual work spent on routine tasks can be massively reduced, as well as service response times, to name a few of the benefits.
An Exciting Year Ahead
As a technology provider and partner to 130 markets globally, we’re constantly investing in services that bring value to our clients and allow them to choose their path toward modernization and transformation. We’ve seen an uptick in the demand and use of SaaS services, and we’ll continue to bring critical market infrastructure as a service to our clients. We plan to leverage our investments in R&D and our partnership with AWS to transform the ecosystem and the global market infrastructure. Most of all, we’re looking forward to bringing more value and reducing barriers through innovative and transformative market infrastructure over the next decade.
Transform with Nasdaq Technology
Our technology solutions help over 500 organizations, from buy-and sell-side financial firms to public and private entities