Nasdaq Inc. is throwing its weight behind technology that protects against financial crime as the demand to stop sophisticated, bad actors rises, according to Chief Executive Officer Adena Friedman.
“We are investing in the technology in a very significant way,” Friedman said at the Consumer Technology Association conference in Las Vegas on Wednesday. The anti-financial crime business is also Nasdaq’s fastest growing business, up roughly 20% year-over-year, she said.
Nasdaq is enhancing its anti-crime offerings using artificial intelligence, which can predict and speed up the process of identifying criminal behavior, and routing out bad actors in the industry, she said. The firm is working with banks, other exchanges, and brokerage firms that can use the software to eliminate threats.
“This is just the next leg of our growth,” Friedman said.
In her tenure as CEO since 2017, Friedman has helped evolve Nasdaq beyond its roots as an exchange. Over time, it’s shifted its resources into offerings with more predictable revenue streams as opposed to relying solely on income from trading and market volatility. Last year it closed its largest acquisition ever, buying software provider Adenza to help transform the trading and markets firm into a fully-fledged financial-services company.
In a wide-ranging interview, Friedman also commented on the Securities and Exchange Commission’s recent approval of spot Bitcoin ETF’s that came earlier on Wednesday. Nasdaq is among a number of exchanges that filed to list the new product on their venue. The ETF offering is regulated and liquid, which provides more access to Bitcoin without directly owning it, she said.
“It opens the door for more accessibility for that particular asset class,” Friedman said.
More broadly across capital markets, Friedman expects to see a “more vibrant” backdrop for initial public offerings in 2024. “We’re cautiously optimistic,” she said. Last year Nasdaq beat out its rival the New York Stock Exchange for the most number of listings, in an overall muted year for dealmaking.
Friedman said activity could pick up, even as the cost of capital remains high. “There are some great companies looking to get out,” including in the biotechnology sector, she said. Artificial intelligence may also come into play, with some companies demonstrating how they are leveraging the technology, using it as a way to differentiate their business. – Bloomberg
