How Nasdaq is using data and machine learning to raise the bar on financial services
Demand for instant access to financial data from investors and traders around the world has shaken up the financial services industry, and Nasdaq, a pioneer in digitizing the trading process, continues to innovate for customers seeking mobile-first, real-time, mission-critical analytics. Its approach involves embracing the cloud, data and analytics, and an API-first mindset.
The global exchange operator, which encourages greater market participation and innovation as vital to the health of the global economy, was one of the early innovators in providing its clients with a wide variety of financial data and analytics. In 2008, Nasdaq partnered with AWS to provide different Nasdaq programs and data access via the cloud, first with Nasdaq Market Replay, followed by Data-on-Demand. Over the years, the company has delivered additional data services through the cloud, including last year’s NextGen Solutions package and Nasdaq Cloud Data Service, further extending its reach as a provider of technology and analytics services.
Its latest offering, Nasdaq Data Link, consolidates the company’s data products into a centralized location with APIs and data sets to provide a consistent experience for clients. The company’s NextGen Solutions continue to leverage AWS services to take advantage of the layers of security to protect the client and customer data, along with the AWS cloud’s scalability, high availability, and multi- and single-tenant capabilities.
Nasdaq’s transformation mirrors a broader paradigm shift of companies embracing a cloud-first mentality for their IT architecture. “Back in 2008, you probably had to have a good reason why you were deploying in the cloud,” says Michael O’Rourke, senior vice president and head of AI/Technology, Investment Intelligence, at Nasdaq. “Today, you need to have a pretty good reason why you wouldn’t deploy to the cloud.”
The need for real-time, mission-critical data has been a top demand from Nasdaq’s customers for the past few years. The rise of global investors that want easy access to data from their mobile devices, along with the growth of retail investors spurred by the COVID-19 pandemic, have put pressure on financial services companies to provide fast and easy delivery of data. In addition, as consumers become more comfortable managing their money and investments online, they expect better user experiences and faster access to a wide range of financial information.
“Being able to get financial updates in real time is becoming table stakes,” says O’Rourke. “For trading applications, being able to visualize the analytics and assess the risk requires that you have real-time data in many cases.”
The demand for real-time access to data has driven Nasdaq’s own digital transformation. Over the past decade, the exchange provided data through an on-premises solution, but gradually began adding cloud access — first with non-critical batch processing, then mission-critical batch processing, then non-critical real-time, and now mission-critical, real-time data access.
“With each one of these product launches, it helped prove out that the cloud was actually the right place for those types of workloads,” says O’Rourke. “Those products allowed us to get those early wins, and we continued to build out our footprint in the cloud.”
As the company offered data access in the cloud, it also continued to offer older products via on-premises but discovered that many new clients want to consume data services, but don’t have the infrastructure required. “For instance, if you wanted the Nasdaq equity data, you could get that on-premises as well,” says O’Rourke. “However, those are low-latency services and what makes them really fast also makes them very hard.”
The flurry of startups looking to capitalize on the broader retail participation, such as Unusual Whales and Unhedged, were requesting to access Nasdaq data directly through the cloud instead of having to build their own on-premises infrastructure.
