Investment Operations

Volatile Markets Require Modernized and Digital Infrastructure Models

Nasdaq and Celent have released the results of the CIO Market Infrastructure Survey 2021, commissioned by Nasdaq. Based on interviews with 25 chief information officers and senior technology leaders of market infrastructure operators (MI) worldwide, the survey aims to understand their focus, priorities, and investments around the creation of their future technology platforms. With the COVID-19 pandemic acting as a stress test on capital markets infrastructure – exposing data flow, scaling, and operational challenges – the survey results, said Nasdaq, uncover increasing demand to move to more agile technology, microservices, and data models.

“For our survey, we wanted to examine how technology leaders of the world’s markets have navigated rapidly changing technological advancements in the face of modernization challenges,” said Lars Ottersgård, Executive Vice President and Head of Market Technology at Nasdaq. “The capital markets ecosystem experienced intense volatility and record high transaction volumes in 2020. In combination with a changing regulatory landscape, evolving market forces and emerging digital models, our research has shown technology leaders across the industry investing in cloud technology and data analytics specifically to future-proof infrastructure across both traditional and digital asset classes,” Ottersgård said.

Additional key findings from the 2021 survey:

  • MI CIOs plan to increase their investment in modern technology as they replatform core trading and post-trade systems. There will be a 45% increase in the number of MI providers with fully modernized technology stacks by 2025.
  • 65% of MI CIOs see cloud technology as a fundamental and expanding part of their software development. The increasing use of cloud technology and microservices is seen as a tool to add agility and to service partner and client demand. Researchers estimate a 27% increase in cloud-ready applications between 2021 and 2025.
  • MI CIOs are actively modernizing their infrastructure. Now more than ever, CIOs are open to partner with third parties in accessing and provisioning technology and services. 31% of the surveyed CIOs will move more components to third party providers in the future.
  • The majority of the surveyed MI CIOs see data distribution as an area to explore managed services. 96% of the surveyed CIOs report that they are either seriously considering investments in enhanced data analytics or already have projects underway in the area.

According to Brad Bailey, Research Director at Celent’s Capital Markets division, the changing face of the capital markets at a time of accelerated technology innovation have many CIOs thinking about their technology estate and the platforms required to future-proof it. “The burden of technical debt and inefficient data processes is critical to their internal and external clients,” Bailey said. “Furthermore, the survey shows considerable differences in where digital change can occur most readily within the various lines of businesses and functional areas that market infrastructures run,” he added.

To read the full report, click here.