Nasdaq Study Shows Legacy Technology and Regulation Preventing Financial Institutions From Capturing Growth Opportunities
- Over a third of firms plan a major system overhaul in the next five years, presenting growth opportunities
- Spending on growth initiatives is limited due to maintaining legacy technology
Industry-wide need to upgrade legacy technology, whilst responding to wave of regulation, risks compromising resilience or missing out on growth opportunities
NEW YORK, Sept. 14, 2023 (GLOBE NEWSWIRE) -- Nasdaq (Nasdaq: NDAQ) today published the results of a major global survey across the post-trade ecosystem, including over 300 decision makers from exchange groups, custodians, brokers, and other service providers. The report was produced in partnership with the ValueExchange.
The landmark study reveals that
Roland Chai, Executive Vice President and Head of Marketplace Technology at Nasdaq, said: “Over decades technology debt has built up amongst infrastructure providers across financial markets. With more than a third of firms planning a major system overhaul over the next five years, alongside responding to an unprecedented wave of regulation, the need for refreshing core technology is a challenge that is core to most industry participants. As the backbone of the industry and global economy, operators must differentiate themselves and remain relevant for the next generation of investors.”
This spending constraint is leading to a substantial difference in investment allocations between FMIs and their participants. For example, for over ten years Robotic Process Automation (RPA) has been proving highly effective in facilitating the quick and tactical automation of core processes and yet today only
Ageing platforms require major system overhauls
A third of firms surveyed operate with legacy platforms more than ten years old, with
Regulatory change is the central concern for FMIs
The study finds the reach of mandatory regulatory change is the central concern for
In parallel, The UK Securities Financing Transactions Regulation has forced the securities finance firms to profoundly rationalize and accelerate their data reporting capabilities – as will the Securities Lending Transparency: Rule 10c-1 in the USA. Considered in the context of multiple local market regulations centered on client asset segregation, client monies and other areas, the regulatory agenda is increasingly requiring significant, enterprise-wide change across the entire trade cycle.
“Across our client base there is an increasing recognition of the need to undertake major change programs, having adopted a patchwork approach for decades,” said Magnus Haglind, Senior Vice President and Head of Products, Marketplace Technology at Nasdaq. “The need to respond to regulatory change is also seen as significant factor, which increasingly demands re-engineering entire platforms, rather than tactical initiatives. This underscores the importance of modernization initiatives across infrastructure operators, where growth should form a key part of legacy upgrades.”
To review the report in full, please use the following link: https://www.nasdaq.com/solutions/mt/nasdaq-post-trade-report
About Nasdaq
Nasdaq (Nasdaq: NDAQ) is a global technology company serving the capital markets and other industries. Our diverse offering of data, analytics, software, and services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions and career opportunities, visit us on LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.
Nasdaq Media Contact:
Andrew Hughes
+44 (0)7443 100896
Andrew.Hughes@nasdaq.com
-NDAQG-