Artificial intelligence is gaining prominence with leading market infrastructures developing advanced analytics, according to a joint report by Nasdaq and Celent.
Data and analytics are becoming major revenue drivers, and all market infrastructures surveyed for the report said they are transforming data management practices with plans to offer new data solutions and delivery options such as data-as-a-service, the report added.
The next goal is to develop advanced analytical tools with artificial intelligence (AI) and machine learning (ML) to create new solutions for investment decision support, risk management and compliance.
Still, data management and model governance issues can be challenging for some MIs in adopting AI, and many are using AI-enabled solutions from vendors. In the study, 35% of all institutions mentioned they are already using AI, and an equal share working on pilots.
On the other hand, robotic process automation (RPA), which is a simpler and more cost-effective technology to automate manual processes, is widely used and its adoption is growing: 70% of discussion participants mentioned they are already using RPA.
Technology can be a double-edged sword, however: “It can also create new competition and disrupt incumbent models and players,” the report noted.
Leading market infrastructures are “thinking like big tech companies” and are aggressive in “pushing the horizons of the business”, the report added: “The market infrastructure providers that will remain relevant in the digital age must be agile, flexible, and unafraid of change.”