All right.
Hello, how are you?
Good, how are you?
Fine, thanks.
All right. Thanks so much for being here.
Sure.
All right. Welcome everyone to our next session. I'm Ben Budish, Barclays analyst, covering the US brokers, asset managers, and exchanges, and for this fireside chat, we're delighted to have Adena Friedman, CEO of Nasdaq. Adena, welcome. Thanks so much for being here.
It's great to be here.
Maybe just to kick it off, you know, over the last several years, Nasdaq's really been leaning into the technology part of the business, increasingly pivoting away from being a pure exchange. So can you talk a bit about this journey, which you've really spearheaded? You know, where do you see Nasdaq moving towards in the future as well?
Sure, yeah. Well, as everyone knows, I think our foundation is as an exchange operator. But over the last 15 years, actually, we've been getting more and more engaged in the technology space. And so when I rejoined Nasdaq 10 years ago as president, I started to work with the team that was focused on the technology side of our business. So we provide capital markets technology to exchanges and then surveillance technology, which is really, think about it as kind of part of the anti-financial crime suite to the broker-dealer community and to exchanges as well.
And as I was engaging with those clients and really understanding what their needs are, and talking to the largest broker-dealers about, you know, how, what are their areas of focus? How can we help them? It was clear that we had really good relationships. We had very good technology, but we're kind of a niche provider of technology to them, and they were looking for a bigger, broader platform where we could help them manage their largest problems.
Those big problems are managing criminals out of their network, managing their risk within the capital markets, and managing their regulators and all the reporting for the regulators. Those are the types of things I kept hearing. And so as we started to think about broadening Nasdaq and where we could be the best partner to our clients, we started to lean in more and more on what I'll call risk management side of the technology, reg tech type of technology. Started with anti-fin crime, with the acquisition of Verafin.
We had done a very complete study, and strategy work on that, and then moved into the risk management regulatory reporting with the acquisition of Adenza. So we are now a scaled provider of technology for the entire industry to really help them become more resilient, become stronger as organizations, and they do see us as a natural partner for that. I think that they understand that we are best in class on the exchange side. Our risk management capabilities are very strong ourselves. We're highly regulated.
We understand them, and they definitely are seeing us as a partner going forward. So that's been a really fun element of how we've been expanding the business. I think the other areas of expansion have been to serve corporates and investors with tools that help them connect better, and then, of course, growing our index business, in terms of in addition to our exchange business.
Great. Maybe let's talk about Adenza a little bit, and so I think the strategic fit, it's increasingly clear all the time as we kind of give... You know, go through earnings calls, learn more about the business, but there was initially a pretty strong reaction from the street, so maybe what do you think was initially most misunderstood?
Yeah.
that drove that reaction?
I think the first thing is that Adenza was a private company, and it was not a well-known brand because it had had brought together two businesses, Calypso and AxiomSL, and formed Adenza. So the first question is, what is Adenza? So you know, when we decided to make a, you know, a large acquisition into a space that the investors were not familiar with. And I think that that's the first thing. I think the second thing is that once they started to understand how strong these assets are, they started to kind of really, they really did a lot of diligence on the business and recognized that these are very strong assets.
They're best in class within the industry. They have strong growth drivers underpinning the business, as well as a large, large SAM and TAM, and so I think investors are starting to get more comfortable with it. It was a large acquisition for Nasdaq. It's the largest we'd ever done, and it was a what I'll call a risk off environment in terms of the environment that we were executing the deal in, but we had total conviction that this was the right next step for us. This is an area that we understand.
We've been gaining a lot of expertise in. We understand our clients extremely well. We had actually we know these assets quite well, in fact. I mean, Calypso has been in our space a long time, in the capital market space, and AxiomSL was a business that we evaluated, but we were in the middle of doing the Verafin acquisition, so we just weren't in the position at the time to buy it. But I totally understood how good it was. It's such a great business.
So I think we've had conviction. It took time to provide all the information that our shareholders needed to have them have conviction. But also, I think we need to execute, and I think we're executing quite well. So that, I think, is giving shareholders good confidence.
Great. Well, let's unpack that a little bit. So maybe thinking about the cross-sell opportunity between Nasdaq's legacy product set and Calypso and Axiom. You know, how are you going after this? Where are the most natural overlap areas of overlap for Nasdaq that perhaps didn't exist for Adenza on its own?
Yeah. Well, first of all, when I mean, just talking to clients, and we have obviously relationships at the highest levels within broker-dealers all over the world. I think that when you reach the level talking to the Chief Risk Officer, the COO, the CFO, the CTO, and they know us, they understand the strengths that we bring. They understand also that they've got very large problems to solve. These aren't areas where they're going to differentiate themselves. These are areas where they wanna stay on the playing field.
So if they could find a great partner to help them solve more of their challenges, they're going to wanna lean in to that partner, and that has been very much part of the conversations we've been having with clients. So as not only between Nasdaq and the Adenza, but even between the Adenza products themselves, those businesses have only been brought together for eighteen months, so there was a lot of opportunity also to cross-sell there. But in terms of the areas that we've been initially focused on, because we have a very concerted effort to drive cross-sells across the business.
The first thing has been looking at collateral management capabilities within Calypso and tying those to the clearinghouses that we serve, in terms of managing the risk across the clearinghouses, in addition to managing risk within the broker-dealer. So that's been one area. The second has been looking at driving the use of Calypso into Verafin clients, because Calypso is actually, from a risk management perspective, an excellent tool for treasury risk management, capital risk management, as well as trading risk management.
And so, we have 2,500 banks that use our Verafin products across the United States, and so we have an opportunity to support them more holistically. And then, with all of the changes in the rules around Basel III Endgame, but also other rules that are coming across the world, making sure that we are bringing AxiomSL into those clients where we already serve them with surveillance, capital markets, technology, and we're finding that there's a real opportunity there as well. Okay.
Well, you mentioned Verafin, maybe we'll touch on that for a moment. So you know, you continue to sign new Tier I and II banks. Maybe talk a little bit about the challenges of going after this market segment, how Nasdaq is starting to overcome them, and maybe comment, if you could, on the current pipeline.
Yeah. So, you know, Verafin has been just an amazing business for us to be the owner of, so we're really proud of that. And that business, the company, the business itself has been just a juggernaut within the anti-financial crime space, in terms of starting with the smallest banks and building their way up now to the largest banks. And what they've done that's really unique is they've always maintained an extremely modern infrastructure and model that has underpinned their business.
Most notably, in terms of bringing data together, harmonizing that data, normalizing it, and then using AI to run very advanced algorithms to root out criminal behaviors across the network. Now we've grown to be 2,500 banks, and now with $7 trillion of assets under custody that we can look at, and all the transaction volume that occurs across those banks. It makes us unique in terms of our ability to find patterns of behavior, looking at the payer and payee, making sure. I mean, criminals don't bank in one bank, right?
So they tend to move around, and so we are able to look across the system and find patterns of behavior. Now, we also are able to reduce false positives, because a lot of times, you know, a bank might be receiving a new client.
They've done some work on that client, but as they're starting to do transactions, they're gonna be doing a lot of extra checks on that client because they're not familiar with that client, but if that client's already been banking somewhere else, we can basically eliminate that as a false positive very quickly, so when we've gone into the large banks now, we're able to show them that, by bringing their data into the consortia data lakes that we've created, we're able to bring down their false positives by anywhere from, like, 20%-40%, depending on the parameters that we're putting on the system, and increase the fraud found significantly.
So it's like an instant and very tangible ROI on the fraud side of things, so any sort of payment fraud. On the AML side, it's a more complicated problem, and it's harder to kind of show an instant ROI because there's so many SARs that have to be written. But what we can demonstrate now is an incredible improvement in the efficiency by which banks have to manage their AML programs. We are using GenAI. One of the new capabilities that we've introduced and we're rolling out across all of our clients today is a GenAI copilot that allows us to do all of the research and write the reports related to potential actors.
So if we get an alert in the system around AML, they have an army of people who go out and look around the internet and try to figure out whether this person or this entity is a criminal entity or not. We are able now to use the GenAI tooling to be able to draw all that and do all the research, draw all the data down, show them all the links to any sort of references to this entity, and then write the report based on the conclusions that the AI has come up with.
Then that means that the analyst just has to read that and review it, and then make sure and confirm everything, which takes down their time of doing the work by 90%. We're really, really excited to be rolling that out because that makes the AML program just so much more efficient, and that is an ROI for the client. Those are the types of things we're doing to make sure that we can serve the largest banks in the world, in addition to continuing to serve the smallest banks in the world with great technology.
So on GenAI, you mentioned the client ROI. What about for Nasdaq? So I think you've recently indicated the rollout is expected to be done around the third quarter. So what are the implications for the company? Is this an upsell? Does it make the value prop more compelling? Is it stickier? You know, how does it impact-
Yeah.
The bottom line?
It's a great question. So we made the choice. We wanna prove value. I mean, GenAI is a very new capability, so it's hard to sit there and go: Okay, we've got this new capability that you've never used before. Can you pay for it? So what we've actually done is we have been rolling it out across our clients. We wanna prove value to them, and we can help them and know whether or not they're actually, number one, using it, and then are they really saving a lot of time on the research side?
Therefore, as we talk to them about renewals and upgrades and other things that they wanna do with us, I think that what our finding will be, that we're able to basically charge for the value of it as a, you know, a reflection of the return that they're getting on it, as we look at contract renewals and other upgrades.
As we also go into the Tier 1's with AML, because we've been going primarily into the Tier 1 banks with our fraud module, but as we wanna broaden out and continue to cross-sell our Tier 1 banks, this, I think, will be a very powerful tool for us to be able to win a business and also to keep those clients and show a differentiation. So we do see it also as a sales opportunity for us, and specifically in the Tier I.
Got it. And where else across the business might there be opportunities to deploy AI capabilities? To what extent are these cost saves, revenue drivers-
Mm-hmm.
As you indicated here, how should we be thinking about that, and what's sort of the timeframe?
Sure. Yeah, we actually talk about it internally as AI on the business and AI in the product, and we have an opportunity in both areas. So on the business it means: How do we make ourselves more efficient and effective? And we are focused on that across, I would say, three primary vectors right now. One is as a coding companion. How do we make it so that our development organizations, our engineering organizations, testing, all of those, that part of product, product engineering, product creation, is more efficient?
And we have actually rolled out a Gen AI platform within Nasdaq, where we can put all of our code into a repository. We can put all of our, our requirement documents, any sort of IP that we want into a repository that's an enclave and secure for us. We can then bring in multiple models. We basically will test out multiple models to understand what's most effective, and what are the tools that we think can be most effective in supporting our development organization. Then drive these skills, create skills that allow them to be more efficient in creating code, and testing that code.
Efficient, frankly, and better. I mean, it should make it so that the code is cleaner, we can test more, et cetera. So there's a huge opportunity there. The second is in client success, which I'm sure you're hearing a lot of people talk about. You know, how do you make it so clients have more self-service capabilities, but also are just getting better answers and more accurate and consistent answers to questions? How do you make our organization a lot more efficient in that regard? The third area is in content creation.
We do have groups of teams that write content, provide that out to our clients. You know, how do we make it so that they can serve more clients and be more efficient with their business? All of this is really to help us grow more efficiently and more effectively, so we're pretty excited about that. In the products, we actually are focused across lots of areas. There's Gen AI, which we just talked about with Verafin. We have Boardvantage is now gonna be doing... Has the ability to do meeting summaries, material summaries, things like that, which are actually, I mean, every director is excited about that one.
And we have about, I think, over two hundred thousand directors that are very excited to have that capability. So we're rolling that out. We've been in beta now with that for several months, and we'll be rolling that out later this year. And then, doing other, you know, just other tools within our org, within, in terms of writing, like, regulatory reports within Axiom or other things like that. And then algorithmic AI, we are deploying that in our markets.
We have our first AI-driven order type that is a premium order type, that has demonstrated improvement in fill rates, which we're very excited about, called Dynamic Midpoint Extended Life Order. And then we also have algorithmic AI across, like, our anti-financial crime surveillance, other areas of the business. So lots of opportunity there to bring that in. Some of it's a direct upsell, some of it's a new module that we're selling, some of it's embedding it into the platforms.
Great. Maybe moving over to your Capital Access Platforms business, I think everybody's always curious to hear your view on the IPO pipeline. You know, the markets are currently pricing in a number of Fed cuts over the next twelve months, which could ease financial conditions. So what can you tell us about the state of the IPO market today? How does the pipeline look? You know, to what extent could perhaps the election result in IPOs getting delayed to 2025 ? I guess we're coming quite close, so maybe you have a pretty near-term view there.
Yeah.
What other macroeconomic factors should we be paying attention to here?
Yeah, well, we've been saying for quite some time that we would expect that the IPO environment would stay pretty light for the rest of this year, and that it is, I think, two things. I think everyone here can understand this, so you know, the predictability of the economy right now continues to be difficult because we are expecting a rate cut, but we haven't seen them yet. We're expecting a soft landing, but we haven't experienced it yet, and so that just makes it harder for investors to necessarily underwrite risk.
I think the second thing is that then you do have the election, and it's not that a lot of companies are necessarily going to be affected by the outcome of the election. In fact, a lot of the companies I'm meeting with that are looking to go public probably will have very little effect from the election, but it's just the noise of the election. Like, when they go out on the road, do they wanna be talking about the election, or do they wanna be talking about the next three years of their business?
So I think that a lot of them are just patient and want to make sure that there's that unknown is known, so they can go out and talk about it in a more known environment. So we're still seeing a lot of companies that may have been thinking about 2024, but not sure about it. I would say now making more of a conviction decision to wait until 2025. There are still gonna be.
We've actually had, you know, more IPOs this year, certainly, than last year, and we are seeing really, actually some great outcomes for companies that have gone public, so those who are willing to take the risk, I'd say, in many respects, are getting rewarded, but I just see it as continuing to be a relatively calm environment this year.
Next year, however, you know, the pipeline is very strong. The companies are large, exciting companies, both in the tech space, the biotech space, in other sectors, energy and other sectors, so I have to say, I think that there is a robust pipeline getting into 2025 , assuming that the economy stays healthy.
Got it. Some of your other businesses under that umbrella, maybe Workforce Solutions. So your IR and ESG Solutions business clearly been somewhat impacted by the current IPO cycle. What would your expectations be here with more, you know, healthy and open IPO markets in 2025?
Yeah. So that is true, and I think that we've seen. We had mentioned that we'd seen a slowing of the sales cycles last year, and we've seen kind of a better environment as we went into this year. You know, so we hadn't seen it get deteriorate further, and I would say that's still the case. You know, it's still relatively slow, but healthy, more healthy conversations. More, you know, companies are more willing to be a buyer than they were last year, 'cause it was a more uncertain environment last year.
And then but the challenge is that we now have a slower IPO environment, so we have fewer new companies to sell to, and there is a flywheel effect between the listings and the corporate solutions quite some time. So there is an opportunity when you have a new listing. They get certain services complimentary for several years, but we tend to upsell them. We also, you know, have certain services that are also not part of that package that we'd like to bring into the client. And so those opportunities are less as we've seen a lower IPO environment.
But at the same time, I would say that, you know, what we've been really focused on in those solutions is just continuing to build them so that they're really fit for purpose for the environment that the clients are working in. We've done. We have a sustainability lens that we've added into the IR platform as an increase, a new module that is an AI-driven module that helps them manage their ESG reporting and comparing themselves to other companies in terms of their ESG outcomes, in terms of index inclusion, other things.
We also have, you know, other tools that we've provided to them on the Boardvantage side. We've been migrating our clients to cloud and introducing the new summarization tool. As we have a better environment, and hopefully next year, we'll start to have that flywheel effect come back into play and hopefully drive better growth in those businesses.
What about on the analytics side? Can you talk about what you've been seeing there? You know, what does the current asset manager appetite look like for those kinds of products? And any other similar kind of impacts, or what's kind of your, you know, near medium-term outlook?
Yeah. So I mean, the analytics side, which is really the solutions that we offer to our asset management, asset owner clients, so it's eVestment and Solovis and Data Link. They're doing well, you know, and I would say eVestment in particular, we have some really great modules that have had really strong sales in terms of, like, Market Lens and new capabilities that we've offered. We've brought all of the Mercer data and all of their research into the eVestment tool, and that's creating.
That's been a very large integration, so now that we're through that integration, we have a real opportunity to sell our clients on that data and that information, that we have a new clientele to be able to go to make sure that we're servicing. We also have new and Data Link new data that we're rolling out, you know, that we're always rolling out to clients. And so those things are. I would say that we have a very healthy environment there in terms of the types of modules that we have available to our clients and the buying appetite from the clients. It's definitely improved from last year.
Great. So maybe separately on the index side, so you're clearly benefiting from the popularity of the Triple Qs, the underlying performance of many of its constituents. But I think earlier this year, you mentioned 30% of your index AUM comes from indices other than the Nasdaq-100 franchise. So talk a little bit about what else the company's doing here, and how do you see your overall index franchise evolving over, say, the next five years?
Yeah. So the index business has been a really exciting business for us for—actually, ever since I got back. So it's been an area that we've been chosen to make some significant investments in to make sure that we are professionalized. We've completely professionalized the operations, the people, process, systems, right? So our people and our process, we've really matured that. And now we're actually in the process of moving our index business onto our NextGen platform.
So very, very exciting because it allows us to even be faster and more efficient in driving new products and new product creation to our clients. Well, we have kind of three legs to the journey with index. One is to continue to launch new products, and we've launched something in the range of, I think, you know, 80 new products over the last 12 months. It's not. It doesn't mean. Some of it could be different products based on Nasdaq-100, but it's also based on other indexes, new index products that we've launched with our clients.
We always partner with index providers, asset managers that are wanting to launch products against our indexes. We do it globally, so it's exciting. So we have new products, and then we have global expansion. We've been really focused on Asia. That's been a really exciting area for us to drive new products and find, you know, draw AUM into our products. And then also bringing it into the institutional community. That's still an area that we've been underinvested in. I would say since the launch of our index business, we've really been retail-driven in our index products.
But the fact of the matter is, a lot of our indexes have really matured to the state where they really should be part of the institutional ecosystem. We've been really focused, first and foremost, on the insurance side, the annuity side, bringing the Nasdaq-100 into that, into that ecosystem. But we're just starting on that journey, so that's a huge opportunity for us. A lot of TAM is available there.
Maybe, you know, I want to pivot into sort of your Market Services and Exchange business, but kind of tying the two in, you know, we've seen a real rise in the trading of cash-settled index options. You know, what are you seeing on your end? How are you thinking about kind of developing growth in, you know, the NDX contracts? What are your kind of ambitions there?
Yeah, so that's been a great partnership between the Index business and the Trading business. So, those two groups have really been working together to launch the NDX options onto all of our options markets, and also make sure that we're developing that ecosystem. So we have to make sure that the data's available and all the strategies that our clients want to execute are available through that options business. So there's been, we actually have worked with a third party to really bring a lot of data out into the ecosystem and drive and also the institutional adoptions.
The more we bring institutional adoption of the Nasdaq-100 , that will obviously drive in interest in the index franchise, the index options as well. So, it's been... You know, we have a great partnership with CME on the futures. The options now complement the futures. I think that actually will drive and become a really nice virtuous cycle as well, and we've seen good growth there. It's very early.
You know, it's again an area that we underinvested in for a long time. So, the fact that we now are really putting a lot of people power behind developing our index options business, we're seeing really nice growth and it's, you know, it's just the beginning, I have to say, so we're really excited about that.
... Great. So moving to the exchange businesses more specifically. So maybe a question, high level, you know, how do you think about competition in the exchange businesses, particularly in the U.S.? How do you think about the trade-offs between market share, fee rates? What are your thoughts?
Yeah. So I mean, it's a constant balance. As you know, the US equities and options markets are highly competitive. They have been for a very long time. I think Nasdaq does an excellent job of competing in that highly competitive space. You have to kind of look at it again in multiple dimensions. The first is: do you have a great trading system? Do you have the right tooling and capabilities to serve your clients? And that's something in what we are constantly investing in. As most of you know, we're rolling out our NextG en trading platform now across our options markets.
And so that's exciting because we're seeing even lower latency and higher performance and more determinism within that platform. So it's a very exciting time for us there. Our clients are really happy with it. But we also look at it, you know, holistically in terms of all of the tools that we offer our clients around risk management, around revenue management, and things like that. So that's one dimension. The second dimension, as you said, is pricing. It's a very dynamic space, and so we're always tuning our pricing to meet the needs of our clients.
We don't chase share. That's something that we are very, very conscious of. We wanna build durable share. And so when we do our pricing, we're looking at it in a very strategic way as to how to drive you know certain clients and certain capabilities into our markets to drive durable share and higher quality markets, like tighter markets. How do we make it so that there's a better experience when the investors come in? And so we will pay. We will, you know, kind of do different pricing programs to make it so we have that durable share and that higher market quality, but we don't chase share that we think is fleeting.
And that can then drive, you know. And then there's, of course, a different dimension, which is: what is the nature of the volume? You know, sometimes certain volume is gonna accrue to our benefit, and other volumes are gonna accrue to the benefit of other exchanges. And, and that creates some dynamic element of market share. But again, we don't try to. We don't become concerned. Like, we really look at this over the long term, creating durable value.
And we try to make sure that we're focused also on what we can control. You know, there's been a fair amount of volume that's gone into the OTC world. So when we look at our relative share, we say, "Well, we might be able to get some of that back. Let's make sure we go after it." But we also wanna look at our relative share in the context of exchange traded volume, and that's something we focus a lot on in terms of how we maintain and manage our share in that environment.
Got it. Can you talk a little bit about your Nordics exchanges? I feel like once a year, you must get asked like: "Hey, why not, why not divest these businesses?" Which is a hard no from you guys.
It is.
Maybe talk about, you know, the value of owning that business where you have more meaningful share, what it kind of brings.
Yeah. I mean, the Nordic business is a fantastic business, and you know, you're right that sometimes it's not as appreciated, I would say, as people you know from our investor community, just because we have it as embedded in, into the larger business units. But it is a fantastic business. First of all, the Nordic markets are, in my opinion, I think you'd argue, and the opinion of most investors, the best markets in Europe. In terms of the quality of the issuers, the quality of the markets, the tightness of the spreads, the liquidity that's available.
There is an incredible embedded ecosystem, financial ecosystem in the Nordic countries, where you've got really strong broker-dealers, you've got a lot of pensions, and at the highest level, a retail ownership of equities in Europe. There's something like, we think, across the Nordics, 47% of retail investors own equities. That's, you know, as compared to about 57% in the United States, so it's but it's compared to about 19% in the rest of Europe. So it's a really great embedded ecosystem. And I think that we do a great job for our clients.
You know, we really do focus again on market share. I, sorry, on market quality and making sure that we have the deepest pools that we serve our clients really well across all of that entire ecosystem. And as a result, you know, the business is doing well, and it brings in, you know, a lot of benefit to us from our market tech business. You know, we have. We do the full stack.
You know, we do trading, clearing, and settlement in certain countries there, we're in the equities and derivatives, and fixed income, so we have an ability to take the expertise there and then leverage that for our market tech business in terms of selling technology to other exchanges, so you know, it's a great part of our business.
Great. Maybe moving now to capital allocation. So you're currently ahead of your, what was your original target for deleveraging post-Adenza? Any updated thoughts on, you know, getting below your leverage targets? How does this, you know, give you some more room to do buybacks? What is sort of the thoughts around the trade-offs in, you know, the near term, while you're in the process of deleveraging? How should we all be kinda thinking about this?
Yeah. We are ahead of what we originally had committed to shareholders in terms of delivering. We ended Q2 at three point nine times, and we expect to continue to deliver. And what we've said is that we, you know, our expectation now is we'll be about six months ahead in terms of being able to deliver down to the three point three times, is what we've committed to by the end of thirty-six months, and now I think that it'll be faster than that. A little faster than that. We feel good about what we've been able to do to deliver.
I think we will continue to be opportunistic in making it so that because we do have certain debt instruments that will have expiration dates, and we'll look at doing some specific, you know, pay downs there. But in the meantime, we have the opportunity to be opportunistic in the market to look at whether we do debt pay downs or, you know, buy back debt or whether we buy back shares. And we look at it actually on an accretion basis, on a return basis, on a de-risking basis... and in general, we feel pretty good about the decisions we've made right now to really focus on delivering.
But, you know, every month we do a new evaluation of that to understand, you know, what the market is telling us in terms of the best use of capital? And we'll continue to be, you know, very active in that space, to really kind of balance out the deleveraging as well as the buybacks.
So with maybe a little bit of room on the deleveraging side, it's clearly a priority, but what are your thoughts, like, on further M&A? You know, maybe kind of tie this into sort of your broader vision for Nasdaq. So maybe not immediate M&A opportunities, but, you know, maybe longer term as well, what other kind of capabilities are, you know, of interest to the company?
Well, I think we actually have a very complete suite of capabilities. You know, we have the best. Well, we think, of course, we are the best markets in the world. We think that we have an incredible index franchise that has huge growth opportunities. We have embedded software solutions across our entire ecosystem that serves the needs of our clients, where we are the right owner. You know, we are the right provider of those solutions. You know, on the investor and corporate side, we can help them manage their challenges in navigating the public markets.
On the bank side, we now have a complete suite of capabilities to help them manage risk and their regulatory obligations, and so we feel very good about our organic path forward. We are very clear with shareholders that we have, you know, we have a job to do to integrate the business, to optimize the business, to show the benefits of these businesses together as part of Nasdaq, as one Nasdaq.
We have a good road ahead of us to make sure that we can execute on that well organically, and that is literally the entire focus of the organization. You know, what we said at the time of the acquisition remains true, that if we do any M&A at all, it'll be very small, very small bolt-on deals that are just very, you know, nichey, but we are really, frankly, entirely focused on organic growth.
Got it. Maybe kind of coming back to the exchange business, I meant to ask you about this. Can you talk a bit about where you are in your cloud journey? You know, you've moved a couple of exchanges into the cloud. Well, you know, we talked about this in the context of AI earlier, top line versus, you know, cost save opportunities. So how do you think about that piece as well? Where's the company in the journey, and similarly, like, how do you expect that to unfold over the next five years?
Yeah. So I mean, we definitely view cloud infrastructure as the future infrastructure of the entire financial system. So, and we're quite convicted on that. We have spent the last twelve years moving more and more of our workloads to cloud. So it's. If I just kind of go around the business, all of our solutions in CAP now are available through cloud, with the exception of our index business, where we're moving it to a cloud infrastructure. But we've moved our governance solutions, all of our IR solutions, all of our analytic solutions, and now, and our data.
You know, we can deliver data through the cloud, and now we have the opportunity with our index business to kind of, as I said, with next gen, platform, to have that be a cloud-based platform. If we look at our Fintech business, we're moving all of our surveillance clients into a cloud version of our surveillance platform. It's gone extremely well. Obviously, investment is a cloud first, cloud-based, cloud-native platform, and our market tech business. With our next gen trading platform, we can deliver full end-to-end trade life cycle technology in full cloud.
And so that has been an area where we've been engaging with our clients more and more on looking at moving portions of their market infrastructure into public cloud or into a hybrid cloud environment, like we've done with our own markets. And then with our markets, we had already moved everything other than the matching engine to cloud. Like, all of our market ops systems, our revenue management systems, all of the things that support the trade have been moved into cloud. What we really now have been focused on is how do we therefore move the matching engine into a cloud environment?
But I would call it a hybrid cloud. So, AWS has partnered with us. We are moving our markets into a cloud infrastructure that's in our data center. We wanna create a private local zone within our data center to support the industry, and we wanna show a path that we can then demonstrate to other markets that this is a possibility and this is the future of the business. So it's been a great partnership with AWS, and we expect to do a lot with them over the coming years to continue to migrate infrastructure into cloud.
Maybe I'll ask you one last question, kind of on the exchange business as well. Maybe I'll tie two into one. So, in terms of the IPO pipeline, a potentially more active 2025 , you know, how should we think about that translating into things like on exchange activity, trading activity, not just the listings business?
Mm-hmm.
Then longer term, I think a lot of investors view, like, cash equities versus options a bit differently, options being, like, relatively less mature with a longer runway. You know, would you agree? You know, how do you think, you know, options growth looks longer term versus cash equities? What are your thoughts there?
Yeah, I mean, I certainly over the last several years, we've seen a significant growth in options volumes. I think in 2019, it was maybe 20 million contracts traded a day. Today, it's like 47 million. So it's a very, very different environment today than it was just a few years ago, and we definitely see that as being a continued growth opportunity for us, just in terms of the overall interest and expertise that's been coming into the options business and new products being created, new strategies being leveraged within the options markets.
Whereas the equities markets, I would say, have been, you know, are more mature marketplace, but there are ebbs and flows in volumes. And certainly, what we do to make sure we create an optimal experience, we can charge a premium for those things where we provide premium value, in the equities market. So continues to be a really interesting journey there, too, just a different one.
Great.
Yeah.
Well, with that, we're just about out of time. Adena, thank you so much for being here. What a pleasure to have you.
Yeah, thank you. Thanks very much.