Nasdaq at Sibos 2022: The State of Play Around ESG, Blockchain, Crypto & Cloud Innovation

This month, thousands of executives, decision makers and thought leaders from across the global financial industry descended on Amsterdam for Sibos 2022 to debate and collaborate on the areas of payments, securities, cash management and trade.

Nasdaq was represented by members of our Marketplace Technology business. As a world-leading technology partner and market infrastructure operator, we are focused on successfully navigating digital transformation, be it migrating markets to the cloud or determining the best path to integrate digital assets into existing business models.

We caught up with Gerard Smith, VP and Head of Business Development, Digital Assets at Nasdaq, to get a snapshot of the big themes from this year’s conference.

1. Environmental Social and Governance (ESG) and how ESG data is leveraged, was one of the key themes for the conference influencing the agenda at SIBOS. Can you share some of your key takeaways?

There was a great debate on ESG data and, more specifically, on the requirements surrounding data quantities and transparency. Common questions included:

• “Do we have too little ESG data or too much?”
• “Does the request for more data provide a smokescreen for inaction?”
• “How do we normalize the data to make it useful when we can’t even agree on which standards to use?”

Regardless of these ongoing conversations, for regulators and governing bodies around the world, their responsibility is to keep up with rapid change and to evolve their frameworks so that they continue to meet investor needs without compromising investor protection.

For corporates, their challenge is to ensure that claims made to investors are supported by accurate data, so as not to make disclosures misleading. The most effective way to get there is with disclosures that incorporate the highest quality, reliable and verifiable data in a standardized and investor-friendly format.

Beyond data standards, Sibos audiences also participated in a conversation on ESG scoring. There was a general agreement that ESG scoring needs to be taken with the context of personal values. For example, does a multinational Big Tech giant really deserve a higher ESG score than a tobacco brand? Overall, there were a lot of fascinating debates and tangible progress in the evolving ESG space.

2. Another big topic was blockchain adoption. What were some of the pain points and opportunities discussed?

At this point, blockchain has been in the industry lexicon for years, yet recurring topics of interest continue to persist. As a recent Bloomberg survey points out, these areas are broad, including: improving data collaboration, speed of processes, transparency in the supply chain, security and privacy, fraud-resistant infrastructure, digital transformation and decentralization of processes. Perhaps this is why the technology is so fascinating. It’s clear that adoption of blockchain is advancing within the industry, but will there ever be a tipping point for mass adoption? In the light of markets shortening their settlement cycles, is there a role for blockchain to advance this agenda or can this be achieved within the current infrastructure, perhaps with an increased emphasis on solutions around exception management? Can we learn from markets where there is already T+0 settlement, such as China? The debate—and journey—continues.

3. Even with the crypto winter persisting, crypto had a large presence both on the agenda and throughout the exhibitor halls. Where are we at with institutional adoption of crypto?

Institutional adoption of crypto is gaining pace, with major announcements recently from Nasdaq and BNY Mellon. Its adoption within the TradFi space has outpaced adoption of other permission-based digital asset use cases. With such big names moving into this space, it can’t be ignored that crypto is here to stay; the question is, how do firms ensure space for crypto within their franchise and what solutions best fit their needs.

4. While cloud remains a consistent focus for evolving financial infrastructure, it wasn't as front and center on the SIBOS agenda as in past years. Where are you seeing the industry's focus on cloud in 2022 and beyond? 

There’s a general acceptance and adoption of cloud within the industry, but also a degree of inertia. This can certainly be understood since there are still regulatory boundaries to be worked within and potential challenges with latency when it comes to trading.  Nevertheless, these issues are diminishing over time; and it’s well understood that cloud solutions offer significant benefits. On our end, Nasdaq continues its journey to enable all parts of its technology portfolio in cloud and offer innovative cloud-native solutions and Software as a Service (SaaS) offerings to its clients.

As we continue through our last quarter of the year, having this opportunity to huddle as a global community makes our industry stronger, better connected and primed for the opportunities and challenges that will shape the capital markets of tomorrow.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Blockchain Cryptocurrencies Innovation Technology

Gerard Smith

Nasdaq

Gerard Smith, Vice President, Head of Post Trade Product Strategy, Financial Technology

Read Gerard's Bio