Opening Keynote (Part 4): Fireside Chat With Brad Peterson, EVP/CTO/CIO, Nasdaq

CEO & Co-Founder Augusto Marietti sits down with Nasdaq EVP/CTO/CIO Brad Peterson to chat about being an API-first financial company and the huge role APIs have played in transforming the digital business at Nasdaq.

Transcription

D1 Opening Keynote (Part 4): Fireside Chat With Brad Peterson, EVP/CTO/CIO, Nasdaq_Fireside Chat_FINAL.mp4
Speaker1: So let’s kick it off, really with, you know, we talk today about service connectivity like smart grid, making sure that all our APIs and our services are reliable, are secure, they are observable. So what’s the vision of Nasdaq for the next decade? How are you thinking about it?

Speaker2: Yeah. So I really enjoyed, by the way, all the product announcements and your customer visions as well. So if you think about it, we’re very similar in that we provide technology for ourselves, the markets that we own and operate, both in the U.S., the popular Nasdaq one, as well as ones in Europe. But we’re also, what people don’t know is, we’re the leading provider of technology to other exchanges and financial institutions. So as we think about that, we originally delivered all that with on prem enterprise software solutions and there were many products and services through the whole lifecycle of a trade that we would integrate together. So we’re on the same journey that you heard a lot of your customers, like the fellow from American Airlines, where we’re thinking about offering those not as enterprise software, but as software as a service. We’ve also gone down the path of making them cloud available services. And so this is a natural extension of that to really say, how do you make them integrate far more organized and elegantly with with an API solution?

Speaker1: I think Nasdaq has millions of older system that comes through the platform every seconds, if not billions, right? In terms of trading volume and throughput per second is one of the highest intense throughput platform in the world. That means, massive scale, massive performance. It can never go down. You lose a few seconds, you probably lose billions of dollars of transactions that’s going through. And so today you have about 20, I think you have 20 API products or services that get exposed. You acquired a company, called Verafin right? You have Nasdaq data link. So tell us about how more about all these things are getting together on the engineering side, but also on the business side?

Speaker2: Yeah, so you mentioned when we put together a full package of products and services we will have, that’s the 20, so we’ll have up to 20 that we’ll internally need to integrate with. And it used to be a bi directional integration. So, now we see this as as a more modern and easier way for for our own developers to do that integration. And then with Verafin, that is really broadening our vision for anti financial crime. So we’re in the business of of extending what we did with trade surveillance where we spot insider trading and all the things to keep the market safe in financial services. We’ve extended our vision with looking after any type of check fraud, any type of transaction fraud and anti-money laundering. So there the strategy is not necessarily to come with a full solution. We offer a full service, but to also allow companies that have some solutions to integrate it with an API strategy. So it makes it a, rather than lift and shift and replace a competitor’s product, we can actually augment and add value much, much quicker, as you know, and you’ve seen with your customers just making the API available to be integrated by the the customers developers.

Speaker1: So basically, it’s creating those kind of financial crime detection as a service through an API and exposure. So everyone in the ecosystem, every digital applications that get built, they can tap into the technology to be to build more safe apps, right? And we have like application like Robinhood, for example, they use Nasdaq data. And so the possibilities are unlimited. So let’s talk about the kind of like when we chat for you a few months ago about the cloud company for financial data, what this is kind of the vision of of Nasdaq rebuilding the the cloud platform for financial data. And yeah, let’s curious to learn more about how you’re thinking there.

Speaker2: Yeah. Well, you mentioned Robinhood, and they were instrumental in kind of understanding that there was a shift in how companies were interested in consuming your services. So years ago, they knocked on the door and said, so show us your APIs and which cloud are you in? And originally we required companies to integrate with a very high performing protocol and to get a direct connection into our data center. And we said that doesn’t work for everyone and especially for developers that are looking for modern APIs. So we have recently announced Nasdaq data link, which exposes a lot of our own market data services, so someone like RobinHood can can go to their cloud provider of choice. And I believe it happens to be Amazon for Robinhood. And they and they can integrate with services from us. And then we also have alternative data providers through this company, Quandl, that we acquired years ago. So you can you can get information about, for instance, aviation flights if you wanted, if you had a service that wanted to integrate data from, you know, planes flying around, there’s another way to get that versus buying that data set independently. So we see a, you know, the new way of consuming data. And of course, data is important for things like AI and ML. So, those tools need to show up in the cloud because that’s where everyone’s looking for them. And that’s where our developers and our customers developers are, are looking to consume them.

Speaker1: And how Kong, you know, thank you to be, you know, partner with us, customers of Kong. How Kong is helping you abstract all this complexity and secure all those APIs, make them manageable and observable so you can build more and more of this cloud company for financial data with today there is 20 API services as a SaaS that companies like Robinhood use. Tomorrow there might be hundreds or thousands of services, so you’re building this hyperconnected financial data enterprise platform and then Kong helps you in getting there.

Speaker2: So I think once you start to have this proliferation of of APIs, you realize that you have to do the same thing over and over again. So that pattern, you know, persists. And I think that what you have astutely seen is there’s a business opportunity to do that well, to have it, you know, well described, catalogued. And of course, the security and metering of that is if it’s a popular and successful product, those are all things that come after the fact. So by having the ability to have that built into a gateway and a product like you have, I think is really forward thinking and you guys continue to add things that someone like us would need. We’re an event based architecture, distributed event based architecture. So having things like Kafka, so it’s not just a traditional web API, but thinking about all the technologies that are going to be important to our industry and the industries of your other customers. That’s a broad vision that we look back in five years and Kong will be very different, I think, than it is today.

Speaker1: Yes. Well, yeah, you said, like if we’re events Kafka, for APIs Kong, it’s I think it’s a perfect combo that we see in a lot of architecture for a lot of our customers. And you use multi cloud. So you’re running multi-cloud, which is our vision of an API connected world. And also some of those APIs are monetized right, directly or indirectly. They can bring new revenue streams to Nasdaq. Right?

Speaker2: Yeah. So we offer a lot of our products that are service based, will offer them on a subscription. But we also see in the future more, you know, pay as you go. And I think that just gives you the opportunity and your product managers the opportunity to think about what’s the best business model for growth. But having something built in where you can take that metering capability, turn that into, is it an annual service? Is it a daily service or is it a buy the transaction?

Speaker1: So that allows you to bring more revenue, stream more digital revenue, stream to Nasdaq over time.

Speaker2: And match what your customers business model looks like.

Speaker1: What is in store for the future of Nasdaq? Everything you can share publicly ahead?

Speaker2: Well, yeah, I definitely will only share things that are public. But I would say, what you knew of Nasdaq was originally a domestic exchange, and we are truly now a global technology company. So, I’m in my role, it makes it really exciting, all the things that are happening around the world and the exciting companies like Kong that we can work with.

Speaker1: Nice. Nice. Well, thanks. Thanks for being with us today and looking forward to this journey on building service connectivity together and make Nasdaq the cloud platform for financial data that you want to build. Thank you.