TECH TUESDAY is a weekly content series covering all aspects of capital markets technology. TECH TUESDAY is produced in collaboration with Nasdaq.
While united by similar cultures, there are significant differences in the how Latin American markets have historically operated and how local market conventions work. This is also true for differences in regulatory requirements and standards from one country to the next. However, some of that is changing as we see more traction toward a convergence of norms, practices and even cross-border collaboration in certain sub-regions.
With that said, there is an undeniable energy and confidence within Latin America’s financial ecosystem. It’s brimming with activity, investment and new participants as the region’s capital markets evolve and mature. This is especially true for the regional banks and brokers landscape, which is being shaped by a variety of forces both global and regional as it grows and becomes more diverse. At a high level, technology continues to pace innovation and advancements in markets, changing how firms approach day-to-day operations as they seek automation and AI. Further downstream, more local factors like consolidation and regulation are top-of-mind strategic considerations and business drivers.
As I hear from Nasdaq Financial Technology clients across the region, it’s clear they’re focused on modernization, risk management, automation, innovation and operational optimization—and how technology can help them achieve their goals.
An ecosystem in flux
Recent years for LatAm markets have been marked by growth and diversification, particularly in digital assets and financial technology. It’s all fostered a growing landscape whose players stretch from regional banks and broker-dealers to digital banks, megabanks, and investment and asset management firms.
These different, yet intrinsically connected, institutions all have their unique considerations. They are also driven in the same direction of modernization not only for their own needs but for their clients’ needs. For example, a cloud-first mentality has really taken root, not only for a firm’s own strategic sake but also that of its clients. Businesses that were behind are catching up and realizing the benefits of agility, self-service and scale that cloud-enabled systems can provide. This is a critical point to stress, as cloud is foundational to actioning data and deploying emerging technologies like AI, which everyone was interested in. Extending the model to additional services, such as rebase programs or level 2 managed services, can help manage risk and disruptive programs so that institutions can focus on their core revenue-generating business.
Despite this, reliance on legacy systems can be restrictive and a blocker for business diversification and growth. Aging, disparate systems are a barrier to modernization and a drain on resources that could otherwise help firms modernize, particularly in the post-trade space (a recent Nasdaq survey found the LatAm region had an especially high exposure to aging market systems). This impacts not only operations but also product agility and competitiveness, which come at a premium in the rapidly evolving LatAm market. As institutions look to innovate and roll out new products, the quick time to market is essential and only made possible by the latest, proven technology to enable and facilitate the strategic vision of the business.
Bridging the local and the global
As much as banks and brokers are looking for technology to alleviate their challenges, they’re looking for the right partner that can combine a proven, global track record with local knowledge.
It’s critical that any technology provider can pair local teams attuned to local conventions, standards and reporting with a global track record and commitment to innovation. Uniting the newly integrated Nasdaq Calypso and Nasdaq AxiomSL with the existing Market Surveillance and Market Technology product portfolios has unlocked new perspectives, efficiencies and capabilities for our clients, from front to back, helping them to optimize operations and capitalize on opportunities with cloud-enabled AI to predict settlement failures or machine learning to generate large risk calculations.
More importantly, we’re helping our clients bring new value to their own clients, who are able to plug into modernization technologies to accelerate business and help firms evolve with markets. It’s all part of our comprehensive plan to bring the entirety of Nasdaq’s offering in full breadth to the benefit of the entire LatAm capital markets ecosystem, from banks and brokers, to asset managers and pensions funds, to financial market infrastructures including exchanges and central counterparty clearing houses. Our priority is to foster capital markets that work better for all and lead to economic growth for all.
Brad Wilmot is VP, Strategy & Solutions, Capital Markets at Nasdaq Financial Technology.
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