Nasdaq announced new AI-powered capabilities within its Market Surveillance Technology solution that will significantly improve the quality, speed and efficiency of market fraud investigations conducted by clients. The solution leverages generative AI to streamline the triage and inspection process involved in investigating suspected market manipulation and insider trading, allowing regulators and market clients to more effectively monitor and detect potential market fraud. I will make it possible.
During proof-of-concept testing, monitoring analysts estimated a 33% reduction in investigation time and improved overall outcomes. This greatly improves investigation efficiency. Nasdaq plans to leverage generative AI-enabled capabilities in monitoring the U.S. stock market.
“Maintaining confidence in the capital markets is critical to sustaining long-term growth and prosperity,” said Ed Probst, senior vice president and head of regulatory technology at Nasdaq. “Market abuse is a significant global challenge, and increasingly sophisticated solutions are required to address it.As a leading regulatory technology provider to the global financial system, Nasdaq is committed to deep innovation. culture, we are uniquely positioned to leverage the power of technology to further enhance the tools and capabilities needed to maintain the integrity of global markets.
New AI monitoring capabilities
To ensure market integrity and credibility, international regulators require financial institutions to demonstrate the continued effectiveness of their monitoring systems and controls. Firms are expected to have scalable systems that can manage increased risk during periods of high volume and volatility, with comprehensive coverage across their portfolios and operations across a wide range of asset classes and jurisdictions.
Currently, when analysts receive automated alerts about suspicious activity, they must conduct an initial review and assess whether the activity merits further investigation. This typically requires manually collating all necessary evidence, such as relevant trading activity and corporate filings, and collating vast amounts of data from external sources before deciding whether to proceed with the review. . This process is very resource intensive, and even more so if the alert requires further investigation.
By leveraging Amazon Bedrock, an AWS service for building secure generative AI applications, Nasdaq's enhancements enable analysts to leverage generative AI capabilities to extract, analyze, and interpret relevant information faster. , which enhances your ability to create detailed initial assessments of alerts. For example, this technology provides a company's regulatory filings, company, industry, and peer news summaries and links, news sentiment analysis, and other mitigating factors that may impact a particular security or You can create an integrated table of aggravating factors.
“By leveraging the latest innovations in cloud technology and artificial intelligence, we will improve our response to emerging threats and effectively combat market abuse,” said Tony Sio, head of regulatory strategy and innovation at Nasdaq. “We can provide advanced tools to the global financial system.” This is a continuous cycle of investment and enhancement of our capabilities, leveraging our unique position as a world-class market operator and best-in-class surveillance technology provider worldwide. ”
Scott Mullins, general manager of AWS Worldwide Financial Services, said: “Nasdaq continually innovates on behalf of the world's capital markets by combining industry-leading expertise with cloud and AI technologies. We are proud to work with Nasdaq as we promote stability and security.”
Expanding AI across multiple business units at Nasdaq
As a global technology provider, Nasdaq has continually advanced AI capabilities that support capital markets and strengthen the integrity, fairness, liquidity, and efficiency of the financial ecosystem. This new generative AI capability is being introduced as part of Nasdaq's broader research and development efforts focused on implementing transparent, reliable, and accountable AI across the financial services industry.
A key aspect of Nasdaq's AI strategy was to accelerate market modernization efforts by improving the quality of data and surrounding systems while adopting cloud-enabled infrastructure. Nasdaq's long-term approach to technology and investing has enabled us to unlock the power of AI by expanding our capabilities, tools, and systems with the right governance, security, and oversight. To date, Nasdaq's AI efforts have spread across many business units, including North American Market Services, Financial Crime Management Technologies, and Enterprise Solutions.
Within North American Markets Services, Nasdaq is introducing Dynamic MELO, the first SEC-approved AI order type, and a dedicated MELO designed to align strike lists on Nasdaq's six options exchanges to market demand. We have started the program Strike Price Optimization. For several years, Nasdaq's Investor Relations Intelligence team has also focused on helping analysts discover new and unique data and insights more efficiently, and has implemented a variety of initiatives to better serve clients. We have adopted different types of AI. Additionally, IR Intelligence recently launched AI-enabled technologies that help customers make better decisions faster, improve productivity, and increase confidence in critical topics such as regulatory report preparation and competitive intelligence. Launched Nasdaq Sustainable Lens™, an ESG intelligence solution leveraged by Additionally, Verafin, Nasdaq's provider of financial crime management solutions, announced the availability of Entity Research Copilot. It uses generative AI to automate compliance tasks and daily workflows, helping financial institutions reduce operational costs and streamline their financial crime prevention programs.
Source: Nasdaq
