Modernizing FMI Data Management: Unlocking Operational Benefits and Revenue Opportunities

The evolution of markets and market technology is accelerating and financial market infrastructures (FMIs) are at the heart of it. While opportunities emerge from AI and new asset classes, FMI legacy platforms are being tested by volumes and volatility driven by changes in global macroeconomics, regulation, investor patterns and innovation.

Increasingly, a fine-tuned operating model is needed to optimize workflows, strengthen resiliency and meet demands for a modern market experience. This means a rethinking of core workload deployments and technology architecture. 

To modernize, however, FMIs need to start at the foundation: data management. From process and reporting automation to billing records and AI, market intelligence and real-time analytics, everything flows from data. 

Modernizing data ecosystems will require adopting new technologies that can streamline operations and eliminate inefficiencies inherent in legacy systems. And by leveraging cloud infrastructure, FMIs can achieve greater operational flexibility and resourcing, which are essential for data transformation and adapting to the fast-paced nature of financial markets. This enhanced agility allows FMIs to navigate market demands and regulatory changes, ensuring they remain resilient, competitive, compliant and positioned for the future.
 

Some exchanges, central counterparty clearing houses (CCPs) and central securities depositories (CSDs) have already begun their modernization journey, perhaps adopting cloud infrastructure for surrounding systems. The pace of change, however, demands a more comprehensive approach as the first mission-critical cloud instances come online. 

Modernizing the data ecosystem is a crucial step for FMIs to initiate or accelerate strategic technology changes. While being data-driven is common in client-facing and internal operations, the emphasis is often on product insights rather than the data management processes that enable them. 

“By using cloud-enabled data management for broader modernizations, FMIs can optimize operations, foster innovation, reduce total costs, and establish a foundation for future-proofing. This also supports scalability, resource allocation, flexibility, and efficiency for data analytics, access and reporting automation.”
 

Modernizing infrastructure requires substantial effort and change management. Market operators need to plan for the necessary investment and considerations, such as addressing cultural aspects, technology expertise and a cloud-first mentality. FMIs must decide whether to focus on resilience and core competencies or manage large-scale data transformation. Finding the right technology partner can place them on an on-ramp to modernization with deployment optionality (e.g., managed services), best practices and standards.
 

Beyond operational optimization and resilience, cloud-enabled data management gives FMIs the agility, scale and resources needed to integrate emerging technologies, namely AI. With clean and centralized data, market operators can also add business capacity to innovate and launch new products and services, including raw data for powerful analytics and reporting that meets market needs for on-demand insights or automated billing.

Cloud-enabled data management platforms provide FMIs with the tools necessary to integrate and analyze vast amounts of data efficiently. Moreover, the scalability of cloud solutions ensures that FMIs can handle increasing data volumes without compromising performance.

This modern market experience is coming into focus and financial market infrastructures will need the infrastructure to:

• Accelerate the deployment of emerging technologies, including AI and generative AI-powered solutions. Modernized data management is the single-most important prerequisite to effective AI.
• Advance a data-driven culture and leverage data as a key differentiator in operations and market participant services.
• Cloud-enablement makes it easier for FMIs to mine data for new intelligence and cultivate ways to differentiate their offerings and operations.
   

Data modernization not only helps FMIs refine their operating model but also open new doors to revenue. Cloud-enabled organizations are in the best position to monetize due to their ability to access advanced data management and analytics, including AI-powered tools, more readily in the cloud.

This revenue can be high-margin and sticky for FMIs.

• Clients are shifting their focus to value-added data, like alternative data insights or AI applications for analytics.
• Legacy systems can limit or altogether prevent FMIs from capitalizing on this white space by restricting innovation or time to market

“Data owners and aggregators that shifted their focus to providing value-added data, such as index creation and analytics, can grow their revenues.”
 

The modernization of data ecosystems opens up new revenue streams by enabling FMIs to offer innovative data products and services. These can include sophisticated analytics, predictive tools and customized reporting solutions that cater to the specific needs of market participants. Personalization is also becoming a market participant demand, something entirely powered by data quality and integrity. By moving beyond basic data provision to value-added services, FMIs can attract a broader client base and secure higher margins.
 

Looking past the obvious market demand for innovation, there are also indirect revenue opportunities for FMIs to consider. Imagine the customer success possibilities of being more proactive in managing client relationships when their data and activity is at your fingertips.

“Reducing traditional friction points can smooth many essential client processes and functions.”
 

As optimization ensues from cloud-enablement, FMIs can more accurately identify client opportunities for services, cross/up-selling and long-term success, while being in a ready position to pounce on those opportunities.

Indirect revenue opportunities arise from the improved client engagement and service that cloud-enabled data management facilitates. With enhanced data access, FMIs can offer more personalized and responsive services, increasing client satisfaction and loyalty. Proactive management of client relationships enables FMIs to identify and act on cross-selling and up-selling opportunities, further driving revenue growth. Additionally, the ability to streamline client processes and reduce friction points enhances overall client experience, making FMIs more attractive to potential clients.
 

Discover How Nasdaq Financial Technology Empowers Over 3,800 Leading Finance Organizations

We are committed to helping market operators and participants overcome infrastructure, operational and regulatory challenges. Our solutions empower you to focus on your core competencies, driving market growth and progress.

Learn More

Cloud-enabled modernization is a strategic priority but not always in the wheelhouse of exchanges, CCPs and CSDs tasked with supporting fair, functioning and resilient markets. Outsourcing infrastructure and technology to a trusted partner can help them optimize, reduce costs and prepare for the future.

The Nasdaq Eqlipse Intelligence platform addresses these core challenges faced by FMIs by providing a cloud-first solution that minimizes operational disruption while modernizing critical data infrastructure. By delivering automated data ingestion, advanced analytics, and self-service capabilities through a SaaS model, the platform enables FMIs to focus on their core market operations while unlocking new revenue streams and improving client service.

By leveraging Nasdaq's expertise as both a technology provider and exchange operator, FMIs can reduce implementation risks and accelerate their journey to modernization. The platform’s automated data ingestion and advanced analytics capabilities ensure FMIs can efficiently manage their data while focusing on core market operations, ultimately unlocking new revenue streams and enhancing client service.