Nasdaq aims to continue advancing its long term-cloud and artificial intelligence strategy across its franchise and the exchange operator believes it will develop new AI-based order types and offer more advanced capabilities to participants connected to its ecosystem.
Adena Friedman, chair and chief executive of Nasdaq, said on the results call on 25 January that Nasdaq continued its migration to the cloud in 2022 and there was also further customer adoption. Last year Nasdaq successfully moved the core trading system of Nasdaq MRX, one of its six U.S. options exchanges, to cloud platform Amazon Web Services (AWS), which improved latency performance by 10%.
She said: “As the first exchange to put a major market in the cloud, this marks a significant milestone in our journey to build a next generation technology infrastructure for the world’s capital markets.”
Nasdaq wants to continue advancing its long term-cloud and AI strategy across the franchise by optimizing its agile development and using machine intelligence to unlock more opportunities to deliver innovation to clients within Market Platforms according to Friedman.
“As we deploy our new data-centric system architecture, combined with scalability and our analytics engines, to cloud infrastructure we believe we will be able to develop new AI-based order types, and offer more advanced capabilities to participants connected into our ecosystem,” she added.
These capabilities will also become available to Nasdaq’s technology clients to enable them to deploy cloud-based market infrastructures in their home markets.
For example, in January 2023 Nasdaq signed an agreement with Bolsa Electrónica de Chile. BEC is upgrading its current on-premise Nasdaq trading technology to Nasdaq’s software as a service (SaaS-based) Marketplace Services platform, with the aim of migrating operations to the cloud by the end of 2024.
This year Nasdaq is also migrating clients to its cloud-based governance and trade surveillance platforms.
“As our anti-financial crime solutions demonstrate, having a cloud-based data lake unlocks enormous potential in applying advanced AI algorithms and self-reinforcing learning engines to our solutions,” Friedman added. “With new step function improvements in AI that are coming to market we are extremely excited to apply this technology to more of our solutions in 2023 and beyond.”
Financials
For full year 2022 net revenues of $3.58bn increased 5% from 2021, and 7% on an organic basis.
Nasdaq said it maintained its position as the leading US exchange for initial public offerings for the tenth consecutive year with 87 operating company IPOs. In Europe the Baltic, Nordic and First North exchanges had 63 new listings in 2022, including 38 IPOs. Nasdaq Stockholm was the most successful listing venue in Europe for the second consecutive year according to the exchange.
Cash equities trading revenues were lower year-over-year, primarily driven by lower European cash equities revenue which was partially offset by modest growth in the US cash equities business.
Friedman said: “We continued to deliver solid growth in 2022 even with an uncertain macroeconomic backdrop and following a very strong 2021.”
She highlighted that the current market environment remains uncertain, and so could impact the near-term growth outlook across listings and the index business.
“Despite the macro uncertainty, we believe 2023 will be marked by how well businesses continue to adapt to the digital transformation of the economy through investments in technology,” added Friedman. “We have confidence that our clients’ investments in technology and cloud-based SaaS solutions will continue to be a priority.”
The firm is also hoping to launch its new Digital Assets business in the first half of this year, subject to regulatory approval in applicable jurisdictions. Nasdaq Digital Assets will initially develop an advanced custody solution that will incorporate liquidity and execution services to address industry challenges around connectivity, availability, and efficiency
The group implemented its new corporate structure during the fourth quarter of 2022 to amplify strategy. Nasdaq’s new corporate structure took effect during the fourth quarter of 2022 with business units organized into three divisions: Market Platforms, Capital Access Platforms, and Anti-Financial Crime. The new structure aligns the company more closely with evolving client needs and the global financial system.
