Outlook to 2022: Technology Market Trends in Asia

TOAs a technology partner to many of the major market infrastructure operators and various digital asset markets in Asia, Nasdaq experienced another eventful year in 2021. The Covid-19 pandemic continued to affect us all. We have seen an intensified focus on digital assets with growing adoption among institutional investors, as well as continued exploration of emerging technologies that enable robust and agile business expansion as well as flexible scalability.

Although we have seen many trends emerge in the last year, there are three trends that I would like to highlight that will continue to be crucial for Asia in 2022.

Institutionalization of Digital Assets

We continue to see growing interest in digital assets, both in cryptocurrencies and in creating markets for new asset classes such as carbon credits and real estate tokens. Several countries in the region, including Singapore, Thailand, Japan, and Korea, have been progressive in defining regulatory frameworks and licensing programs for cryptocurrencies and digital assets.

With growing interest from institutional investors and record trading volumes in cryptocurrencies in 2021, with an all-time high in May $2.23 trillion traded on the spot markets of the largest crypto exchangesMany digital asset markets are focused on improving the scalability of their infrastructure and trading platforms to ensure robust trading through volatile trading conditions. In addition, they see the need to implement efficient controls and automated processes that ensure the integrity and fairness of the market. This includes incorporating market surveillance tools to detect and prevent potentially manipulative behavior that risks damaging market confidence. Robust infrastructure and market integrity will be key to success in the battle for market participants in the digital asset space.

Modernization of basic infrastructure

Market infrastructure operators in Asia continue to modernize their core market infrastructure as they take a proactive approach to business and technology resilience. At the start of the Covid-19 pandemic in March 2020, volatility and trading volumes reached new highs. At Nasdaq, we process more than 60 billion messages a day in our US options market alone. Similarly, other markets around the world also experienced large spikes. Some of our Market Technology clients have more than tripled their trading volumes in recent years. Experience tells us how important it is to be able to scale capacity quickly and flexibly. At Nasdaq, for example, we make sure to plan for more than double the capacity of the highest trading volumes in all of our clients’ markets.

Additionally, the shift to remote work and virtual collaboration at the start of the pandemic created a new work environment for us, our clients, and many others alike. Market operators had to identify and adopt new tools and processes to address the challenges associated with the shift to remote work while ensuring robust operations. This change has accelerated the digitization journeys of many market infrastructures as they seek the best ways to modernize their core business architecture.

You can find more information in the report CIO Market Infrastructure Survey 2021: The Digital Journey To 2025 made by Celent and Nasdaq. The interview-based report highlights the three main drivers behind core infrastructure transformation: improved resiliency, improved customer experience, and new revenue streams. The study also shows that an increasingly important part of CIO strategies involves cloud operations, which brings me to the third trend I want to highlight.

Leverage cloud computing and managed services to support business development

We have seen market players monitor the development of cloud-based managed services for a while, and the adoption of this will continue to evolve through 2022. Market infrastructure players continue to focus on innovation, taking advantage of emerging technologies and reducing time to value. for new technology and infrastructure initiatives. Our clients want to ensure that they can focus resources on developing their core business and expanding into new opportunities. They can do this while having a trusted technology partner managing technology operations and day-to-day support.

Singapore, like the rest of the Asian region, has long been at the forefront of technological innovation. Markets and their regulators in the region inspire conversations in other parts of the world to drive standardization and advancements across the industry. In the coming year, we look forward to adopting new technologies to ensure resiliency and collaborating with our industry partners to improve the ecosystem in Asia and beyond.

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