Opportunities for innovation

By Puja Sharma

Markets have moved from physical trading floors to fully digital and now cloud-based infrastructure — what does this shift say about where global financial markets will go next? Valerie Bannert-Thurner PhD, EVP & Chief Revenue Officer, Financial Technology, Nasdaq, spoke with IBS Intelligence’s reporter Puja Sharma.

From physical to digital, where next for global financial markets?

“The evolution from trading floors to cloud infrastructure reflects a fundamental reimagining of what mission-critical means in financial services. We’re not just digitising existing processes — we’re enabling entirely new operating models that prioritise speed, resilience, and global connectivity.”

“What’s particularly exciting is how this transformation is democratising access to sophisticated market infrastructure. Through our partnership with AWS and solutions like Nasdaq Calypso, we’re seeing a range of institutions from regional exchange groups to small and mid-sized banks access the same powerful capabilities that serve some of the world’s largest institutions. This levels the playing field globally and opens up new opportunities for innovation around the world.”

“Looking ahead, I see markets evolving toward always-on, intelligent ecosystems where AI-driven decision-making, real-time risk management, and seamless cross-border connectivity become standard. The infrastructure that powers tomorrow’s financial system won’t just perform operational tasks — it will anticipate risks, optimise liquidity, and provide actionable intelligence that helps market participants make better decisions faster.”

Banks and market institutions are modernising on multiple fronts at once — regulation, market structure, digital assets and AI — where is complexity becoming most costly?

“As the external world has become more complex, institutions have addressed each new challenge with layer upon layer of fragmented systems, siloed data, and manual processes. This piecemeal approach, rather than taking a holistic view, has caused profound issues in system flexibility and data management.”

“Institutions often have the same data living in multiple systems, creating reconciliation nightmares and making it nearly impossible to establish consistent, real-time views of risk and operations. This represents a significant cost, but the real impact comes from an inability to realise the benefits of innovative new technologies and adapt to the market evolution we’re seeing.”

“Crucially, many institutions are not positioned to take advantage of the next wave of opportunity across the industry, whether that’s from integrating new asset classes like digital assets or automating workflows and decision-making. These developments hold enormous potential for business growth and productivity gains and there will be big winners and losers.”

What are the real operational and financial consequences of this growing complexity for banks trying to scale responsibly while staying compliant?

“The consequences are significant. Operationally, complexity creates an inability to react quickly to change — when systems are fragmented, a change in one area can have unexpected ripple effects across the organisation. We’ve seen banks where a simple regulatory change requires changes across dozens of systems, each introducing potential points of failure.”

“Financially, complexity becomes a hidden tax on growth. Every new product launch, market entry, or regulatory requirement becomes exponentially more expensive when you’re working with fragmented infrastructure. Instead of building once and scaling globally, institutions find themselves rebuilding similar capabilities multiple times.”

“Perhaps most critically, complexity limits agility in a rapidly changing market environment. When it takes months to implement changes that should take days, institutions lose competitive advantage and struggle to meet evolving client expectations. This can be a roadblock in areas like digital assets and AI, where speed to market can determine success.”

As institutions reassess their technology stacks, why are they increasingly looking for trusted, regulated partners rather than standalone vendors?

“Trust has become the ultimate differentiator, especially as institutions navigate mission-critical transformations. When you’re modernising core trading, risk, or compliance systems, you need partners who understand both the technology and the regulatory environment, and who have skin in the game.

“What’s changing is the recognition that financial infrastructure is too important to rely on partners who don’t operate in regulated environments themselves. Nasdaq processes billions of transactions daily under the scrutiny of global regulators and has consistently demonstrated how heavily regulated institutions can embrace innovative new technologies like cloud and AI. That experience, combined with a deep understanding of market structure and participant needs, provides a level of assurance that clients truly value.”

“There’s also the community aspect — they recognise the advantage of being part of an ecosystem where best practices, innovations, and insights are shared across the network. When one institution solves a complex challenge, the entire community can benefit. This collective intelligence is only going to be more powerful as we capitalise on the extraordinary potential of AI.”

How is Nasdaq applying its experience running mission-critical market infrastructure to help banks simplify architecture through SaaS and managed service models?

“Our approach starts with the understanding that financial institutions want to focus on their core competencies, serving clients and managing risk, rather than maintaining complex technology infrastructure. Whether it’s managing risk, margin, and collateral needs in Calypso, or regulatory reporting in AxiomSL, they are increasingly looking to us to take responsibility for the operational heavy lifting, so that they can focus resources on growing and expanding their core business.”

“The key insight from our own cloud journey is that modernisation isn’t just about technology, but a wider view on governance and operating models. We’ve learned how to ensure security and resilience at scale, and how to ensure the rigorous oversight that regulators expect.”

“From our client perspective, we help them break down silos, consolidate platforms, and create unified data architectures that make AI and advanced analytics possible. Most importantly, we want to help them maintain the highest standards of security and compliance, while allowing for innovation. That combination of operational excellence and forward-looking capability is what allows our clients to transform with confidence.”

Where do you see the most meaningful innovation opportunities emerging across banking technology — particularly across cloud, AI and the use of data?

“The convergence of cloud, AI, and high-quality data is creating unprecedented opportunities for intelligent automation and predictive capabilities. We have incredibly powerful capabilities across fraud detection, real-time risk management, automated compliance workflows, and even predictive market analytics.”

“But the real breakthrough comes when institutions can combine their own expertise with Nasdaq’s platforms and community-wide intelligence. This creates feedback loops where better data drives better AI-powered decisions, which can ultimately deliver both substantial growth potential and productivity gains to our clients.”

From Nasdaq’s own cloud and AI journey, what lessons stand out around governance, regulator engagement and explainability — and how are clients learning from each other?

“Governance is absolutely critical. We’ve established comprehensive AI governance frameworks that align with NIST standards and address the unique risks AI presents in financial services. This includes ensuring explainability, maintaining human oversight of key decisions, and continuously monitoring for bias or errors.”

“But the most important factor is that successful innovation requires an open and transparent dialogue with regulators. We’ve found that proactive engagement, demonstrating how new technologies can enhance market integrity and investor protection builds confidence and enables faster adoption.”

“Nasdaq has a unique ability to bring this combined experience to its client community, but also ensure insights, data and feedback from that community are continuously fed into our products and services, so the whole industry can draw on this collective expertise. “

“The most successful institutions will be those that can innovate responsibly, while delivering the speed and efficiency that modern markets demand.”