Each year, Chartis conducts its independent RiskTech100 study of the major players in risk and compliance technology. It ranks the top 100 risk technology providers and identifies the top players in specific risk and compliance categories. Nasdaq is proud to have won the 2024 RiskTech100 awards for its Market, Anti-Financial Crime, and Capital Access Platforms. Overall, Nasdaq’s solutions ranked #18 for the second year in a row. Moreover, our solutions scored 15% higher than in 2023 based on their raw scoring, illustrating how our solutions have evolved in the competitive landscape.
Market Platforms
Regulators require exchanges, marketplaces, banks, and brokers to monitor an array of risks because the default of one or a group of participants could rapidly result in contagion across the financial markets. Recent examples, such as the turmoil in the nickel market in 2022, highlight the importance of knowing your clients’ liquidity position, always keeping clients’ cash balances visible, and performing rigorous, complex stress tests intraday.
Both Nasdaq Risk Platform and Nasdaq Pre-Trade Risk Management were recognized in the RiskTech100 awards for their comprehensive feature set and robust approach to risk management.
Nasdaq Risk Platform is delivered as a cloud-based SaaS solution, which reduces operational complexity and allows clients to be onboarded quickly. With Nasdaq Risk Platform, clients can monitor their trading activity in real-time and comply with multiple regulations – from net capital and customer protection to market access and more. The solution consumes trading activity in real-time and dynamically updates positions, liquid equity, P&L, and net exposure. Risk managers can set limits and receive alerts before reaching a material threshold.
Having pre-trade risk controls in place is critical for market operators to safeguard quality and trust in their markets. Exchanges use Nasdaq’s Pre-Trade Risk technology to define, monitor, and enforce risk limits on market participants’ trading activity to protect them from errant orders, miscalculated algorithms, and limit breaches. In addition, market operators can provide the same risk management capabilities for their members to oversee their trading desks and sponsored access clients’ activity as a value-added service that also helps drive liquidity to the market.
Pricing and intermediating risk is a core function for insurance companies, but this has become far more challenging given the unprecedented risks associated with climate change. At the same time, regulators are requiring insurers to quantify and disclose them.
We are honored that Nasdaq Risk Modeling for Catastrophes was among our award-winning solutions. Leveraging the Oasis Loss Modeling Framework, an open standard for capturing exposure data, and open-source software to run the financial engine for calculating the losses from events, firms can access multiple catastrophe models from many vendors. They can upload exposures, including information about their buildings, geographic locations, rebuild costs, as well as details of their insurance policies, to a cloud-based SaaS platform and then run catastrophe models based on their exposures. For example, if a firm has exposure in a part of the world that experiences hurricanes, it can tap into a model that covers wind and flood risk in that region. The solution’s global flood model includes climate change events and can capture backward-facing and future climate data – the first of its kind in the insurance industry.
Anti-Financial Crime
Market abuse, fraud, and money laundering is an enormous problem across the globe that costs trillions of dollars and contributes to systemic risks to the global economy. To this end, regulations require financial institutions to have sophisticated solutions to monitor the massive transaction volumes processed daily and detect criminal behavior.
For the second time, Nasdaq won two category awards in Trade Surveillance and Managed Services: Financial Crime. Now in their 30th year, Nasdaq Trade Surveillance and Nasdaq Market Surveillance are among the most comprehensive and robust surveillance solutions on the market.
These solutions consume structured market data, as well as unstructured data, including social media, and they cover more than 200 markets and 300 behaviors, spanning multiple asset classes and markets, including crypto. More than 170 banks, brokers, and over 50 exchanges and regulators rely on them to detect market abuse across multiple regions and asset types.
Acquired by Nasdaq in 2020, Verafin, whose clients include tier-1 and tier-2 banks as well as regulators and consortia, was recognized for its cloud-based anti-money laundering and fraud solutions. Verafin helps around 3,500 banks and credit unions across North America to detect and prevent serious crimes, including human trafficking, elder abuse, and identity theft. In addition, clients can collaborate through Verafin’s Information Sharing platform to fight crime.
Capital Access Platforms
Nowadays, many investors demand more transparency with regard to environmental, social, and governance (ESG) factors, and companies are responding with more disclosures and information sharing. In several jurisdictions, firms are required or being asked voluntarily to describe their approach to ESG in both qualitative and quantitative terms in a sustainability report or annual report. Significantly, ESG reporting is now being incorporated into formal accounting standards. On the environmental side, it is important to recognize that these disclosures help countries meet their targets under the 2015 Paris Agreement, which was forged to mitigate the effects of climate change.
We are pleased that Nasdaq Governance Solutions, Nasdaq Metrio, and ESG Advisory ranked highly in this year’s RiskTech100.
The role of the board is to ensure the long-term viability and financial health of the business to drive stakeholder value. The board sets strategy, approves major financial decisions, oversees risk, monitors financial performance, and approves the disclosure of annual financial statements. Meanwhile, it is management’s responsibility to establish a structure for managing these functions and a process for staying informed about risks. Organizations need to establish connections, information flows and oversight mechanisms to report information to the board and disseminate information through management structures.
Organizations need reliable solutions that help boards and management teams facilitate major decisions, advance strategic vision, and drive stakeholder value. Nasdaq Governance Solutions provides a suite of technologies, ranging from board portal software to compliance solutions and board advisory services. Our board portal, Nasdaq Boardvantage, helps optimize meeting workflows, collaborate knowing that data is protected, better align on decision-making, and save time and costs. Our board evaluations, facilitated by the Nasdaq Board Advisory team, help to identify opportunities for continuous improvement, promote board and management alignment, and turn director feedback into action. Further, our directors’ & officers’ (D&O) questionnaire platform helps to transform questionnaires into a dynamic process, improving responses, streamlining reviews, saving time and costs, and ensuring accuracy in disclosures.
Nasdaq Metrio is a single, SaaS-based, end-to-end data management and sustainability reporting platform. Clients can collect, measure, disclose, and communicate investor-grade ESG data across stakeholders, standards, regulatory bodies, as well as research and ranking organizations. They can create smart workflows to reduce survey fatigue and provide one source of truth for ESG data. Further, they can calculate greenhouse gas emissions, track and report on KPIs, manage responses across one or many frameworks, disclose to regulators and communicate their process through an interactive sustainability website.
Finally, Nasdaq ESG Advisory provides strategic ESG consulting guidance so companies understand stakeholders’ expectations and priorities. Our dedicated team helps companies identify topics and metrics that are material to the business and integrate the ESG narrative and metrics into existing company filings or standalone ESG reports. With respect to climate strategy, we help companies understand any potential impacts on the business, develop a risk management plan, measure the carbon footprint, and create a decarbonization plan and roadmap.
Committed to Innovation in Technology
Many asset classes are traded in marketplaces across the globe at lightning speeds and sometimes in volatile conditions. The ability to monitor, measure, mitigate, and manage risk in this complex environment and comply with myriad regulations is critical because it promotes market integrity and inspires investor confidence.
Technology is the key enabler for an effective risk program, and exchanges, marketplaces, banks, brokers, regulators, and corporations have many solutions to choose from. We appreciate the recognition of our work in the Chartis RiskTech100. Nasdaq is committed to innovating, adapting, and investing in these and other technology solutions to help our clients manage risk across their organizations.