Business intelligence is expected to attract huge investment from established players in the financial markets industry to aid strategic planning in coming years.
Financial firms are leaving no stone unturned when it comes to embracing the technological advancements; they are planning to either partner or acquire technology firms catering big data and analytics that can help them to stay ahead of their competitors.
With the help of analytics, the internet of things (IoT), and artificial intelligence (AI), most of the challenges being faced by financial firms such as cyber security, trading commissions, structural reforms, and data management, can be mitigated.
Meanwhile, cloud computing is increasingly becoming the mode of delivery and deployment among financial market institutions.
Exchanges operate large mission-critical networks with huge volume of sensitive information stored in multiple data centres that puts them in the cross-hairs of cyber-attacks.
Financial firms are therefore looking to adopt technologies that can tackle these challenges.
For instance, Nasdaq has acquired a London-based technology firm Sybenetix, which uses algorithms to catch errant traders.
Nasdaq is also investing in technologies, talent, and capabilities that can solve complex challenges that customers face.
Behavioural science, cognitive computing, and machine intelligence are essential to gain holistic surveillance and are critical to efficient and effective organisational compliance.
Sybenetix’s algorithms learn about individual or group behaviour at an organisation, and can detect any unusual trading behaviour and report to the compliance team.
Although Nasdaq has some of its own risk and surveillance software, the latest acquisition will add to its offerings that analyse data beyond trading records to better spot conduct risk.
In a similar vein, Moody’s is acquiring Bureau van Dijk, a global provider of business intelligence and company information, for $3.3bn.
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It had also acquired the structured finance data and analytics business of Society for Clinical Data Management (SCDM), a Frankfurt-based provider of analytical tools earlier this year.
AnaCap Financial Partners, a private equity firm in France, has acquired Ellisphere, a French business intelligence company.
Advances in big data storage, cloud computing, analytics, and visualisation are lending the technology push for financial firms.
Mounting demands from regulators are compelling financial companies to adopt these new technologies.
Since the global financial crisis, regulators have become more watchful and have looked at ways to avoid failures of the past.
The use of chat bots, robot advisers, and investment in quantum computing demonstrate the kind of investments financial giants are looking towards to stay ahead of their competitors.