Nasdaq to enhance integrity of market surveillance with GenAI

photo of a figure standing in front of blue, green and white-colored screen | market surveillance gen AI solution by Nasdaq and AWS

Nasdaq has announced a new AI-powered feature within its market surveillance technology solution to improve the quality, speed and efficiency of market abuse investigations performed by customers in the American stock exchange company.

The solution leverages GenAI to streamline the triage and examination process when investigating suspected market manipulation and insider dealing.

According to Nasdaq, the solution will help empower regulators and marketplace clients to monitor and detect potential market abuse more effectively. As an example, during proof-of-concept testing, surveillance analysts estimated a 33 percent reduction in investigation time, with improved overall outcomes.

“Maintaining trust in capital markets is critical to preserving long-term growth and prosperity,” said Ed Probst, senior vice president and head of regulatory technology at Nasdaq. “Market abuse is a substantial global challenge and one that demands increasingly sophisticated solutions to address it”.

“As a major regulatory technology provider to the world’s financial system, with a deep culture of innovation, Nasdaq is uniquely placed to leverage the power of technology to further enhance the tools and capabilities necessary to uphold the integrity of marketplaces globally,” Probst added.

Additionally, by leveraging Amazon Bedrock, an AWS service for building secure GenAI applications, Nasdaq’s enhanced functionality will aim to empower analysts with generative AI capabilities to distill, analyze and interpret relevant information more quickly, enhancing their ability to form detailed initial assessments of alerts.

For example, the technology can produce a consolidated table of the company’s regulatory filings, summaries and links to company, sector and peer company news, news sentiment analysis and other mitigating or aggravating factors that may impact any given security.

In the future, Nasdaq plans to leverage the GenAI-enabled functionality for its US equity market surveillance.

Scott Mullins, general manager of worldwide financial services at AWS, commented: “Nasdaq is continuously innovating on behalf of the global capital markets by combining its industry-leading expertise with cloud and AI technology.

“We are honored to work with Nasdaq as it harnesses the power of generative AI to advance the stability and security of the global financial system.”