TECH TUESDAY is a weekly content series covering all aspects of capital markets technology. TECH TUESDAY is produced in collaboration with Nasdaq.
A moment of truth is defined as an important time when a decision must be made quickly, and that decision will have significant impact on the future.
For Nasdaq, a moment of truth happened when the exchange group decided to move its market infrastructure technology to the cloud with Amazon Web Services (AWS).
“It was about recognizing we don’t just provide technology for our own markets, but we provide technology for 130 other markets around the world,” Nasdaq CEO Adena Friedman said in a recent Boston Consulting Group (BCG) CEO Moments of Truth interview. “To make the determination to rewrite the entire trade lifecycle technology to be cloud-native, and to move our markets into the cloud was a huge moment of truth for our organization.”
By way of background, Friedman shared that Nasdaq’s foundational business has been a market operator, and over time, a provider of infrastructure technology solutions to marketplaces globally. The aim of moving to cloud technology is to help trading and technology clients better navigate markets and bring more integrity, liquidity and transparency to the industry.
In moving to the cloud, Friedman said a key step was to get employees on board with the vision and believe in the future of the cloud. “They have to understand that technology is an unstoppable force, and cloud is the future of technology that will underpin everything,” she said. “If we don’t start moving, we will fall behind. You have to create that urgency.”
Educating people about the cloud and its capabilities was critical, as this enabled people to gain comfort with emerging technology and then discuss it confidently with clients. “It was super interesting to see how the mindset shifted once they saw what was possible,” Friedman said.
When asked about the critical moments in Nasdaq’s cloud journey, Friedman cited two moments.
“One was when I stood up in front of tens of thousands of people at AWS re:Invent [in November 2021] and announced that we were going to be moving our first market to cloud in 12 months,” she said. “That was a moment of truth. And I had the technology team that was going to be building that in the front, so they were there along with me as I was announcing this to the world.”
“The second moment of the truth was the day the market went live” in December 2022. “It was one of our options markets. We generate billions of messages per day in each of our options markets, and to see it operate flawlessly and with improved latency was a great moment of truth.”
Since then, the exchange group has moved three exchanges to AWS.
The BCG interview then looked ahead to another major emerging technology – generative artificial intelligence – which Nasdaq’s tech clients are learning is complementary to the cloud.
“As they realize that the future of technology is in unlocking their data, how do they make sure they are positioned to do that?” Friedman said. Gen AI “has completely accelerated our conversations on moving their markets to cloud infrastructure.”
For example, Nasdaq has integrated AI functionality, leveraging Amazon Bedrock, into its Market Surveillance and Nasdaq Verafin technology.
Friedman stressed that with any technological change, whether evolution or revolution, it’s critical to communicate, even over-communicate, with team members. “Once you get everyone on board, you run a lot faster,” she said.
Also, education is important, as is having an “outside-in” mindset to keep complacency at bay. “You need to always be on the forefront of what’s next,” Friedman said. “We were born as a disruptor, and we want to continue to take that culture and live it and breathe it every day.”
To learn more about Nasdaq’s journey to the cloud, visit https://www.nasdaq.com/cloud
