Web Summit: Nasdaq acquisition of Verafin to drive AML provision

By Sunniva Kolostyak

Nasdaq is planning to become a full-service anti-fraud and anti-money laundering (AML) provider with its recent acquisition of Verafin, its president and CEO said at Web Summit.

According to Adena Friedman, the President and CEO of Nasdaq, the stock exchange and capital markets technology provider, the company has been identifying industry trends where it hopes to play a leading role in the coming decades.

These trends include anti-fraud, including AML, and environmental, social and governance (ESG) issues, Friedman said at the online tech conference.

“With the acquisition of Verafin, which we announced last week, we will be able to be a more full-service provider, really focusing in with the banks on anti-fraud, anti-money laundering and other more complex elements of the financial crime area,” she said.

Financial crime is growing by about 17 per cent every year, and banks and brokers are spending about $42 million a year – $12 million just on technology – in order to manage anti-financial crime practices.

Nasdaq is today providing technology for market surveillance, providing banks and brokers with tools to route out market manipulation and insider trading, but with the Verafin acquisition, it hopes to also maximise opportunities and minimise risk.

It is also aiming to lean in on ESG by partnering with corporate clients for governance and investor relations solutions, as they are standing in front of ever-increasing demand.

Friedman said: “We have an advisory team and a technology tool now to help them kind of organise their ESG practices internally.”

She also noted that on the analytics side, investment management clients are seeing trends within passive and alternative asset management, which Nasdaq is hoping to address.

During the pandemic, Nasdaq has had to manage both engineering challenges and volatility, seeing highs of 52 billion daily messages in its US equities and options markets.