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Speaker 1: For our Bloomberg television and radio audiences worldwide. I'm David Weston,

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Speaker 1: and I'm delighted to say we have now with us

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Speaker 1: Adina Friedman. She's the Nasdaq chair and CEO. Thank you

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Speaker 1: so much for being back with us.

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Speaker 2: It's great to be here.

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Speaker 1: Earnings today, both the fourth quarter last year and the

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Speaker 1: whole year, and looking at those, first of all, you

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Speaker 1: exceeded expectations pretty much across the board.

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Speaker 3: It looked like congratulations on that.

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Speaker 1: At the same time, it's a bit different because you

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Speaker 1: were adding a substantial new component, and it looks like

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Speaker 1: there's almost two aspects of Nasdaq. One is what your

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Speaker 1: traditionally have done and the other is your solutions business.

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Speaker 3: Explain how that works is.

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Speaker 1: They seem to have very different growth patterns.

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Speaker 2: Yeah, well, thank you, and we are really proud of

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Speaker 2: the results we deliver for the shareholders. Just a quick

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Speaker 2: recap for the quarter, we had seven percent overall growth

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Speaker 2: and in the solutions businesses it was nine percent growth

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Speaker 2: and those are organic numbers, and of course the time

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Speaker 2: we also added a Denza into NASAQ in the fourth quarter.

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Speaker 2: The two key growth areas for us in the quarter

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Speaker 2: were our index business up twenty six percent, our anti

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Speaker 2: financial crime business up twenty five percent. But overall, the

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Speaker 2: overall business continues to really show the power that diversified

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Speaker 2: portfolio that we talked about. Now, as you said, we

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Speaker 2: have our markets business and we have our solutions businesses

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Speaker 2: and that includes like data analytics and software provide products.

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Speaker 2: Maybe take a second on that. So when we thought

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Speaker 2: about how do we grow our business, we are a

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Speaker 2: great market operator, really proud of that. And what do

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Speaker 2: markets do? They provide liquidity, transparency and integrity. And when

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Speaker 2: we think about how do we therefore partner more with

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Speaker 2: our clients to help drive liquidity in the financial system, Well,

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Speaker 2: it's not just our own markets, but we provide technology

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Speaker 2: to one hundred and thirty other markets. Now and now

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Speaker 2: with the acquisition of Adenza, we have our CLIPSOS system

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Speaker 2: which provides risk management technology to banks. It gives them

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Speaker 2: more ability to put more liquidity into the system and

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Speaker 2: then if they manage risk better, they can put more

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Speaker 2: liquidity into the markets. So that's the liquidity pillar for sure.

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Speaker 1: A Denza for a moment, because that is a big

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Speaker 1: deal for you. Yes, it's very substantial. A lot of people,

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Speaker 1: a lot of costs a lot of revenue coming in.

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Speaker 3: How is that integration going, Because.

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Speaker 1: As you know, most deals fail not because they're bad ideas,

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Speaker 1: because the integration doesn't get done well.

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Speaker 2: So, first of all, it's been a great start to

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Speaker 2: bringing a Denza into NASTAC. We close on the deal

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Speaker 2: in November. We brought the team in right away. We

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Speaker 2: created a new operating model where we have both a

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Speaker 2: Denza and NAZAC people leading the fintech division and the

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Speaker 2: financial technology division within NAZAC now is comprised of market technology,

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Speaker 2: the technology to provide other markets, our anti financial crime suite,

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Speaker 2: which is in that integrity pillar, and then also includes

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Speaker 2: the addenda products CLIPSO orse management and AXIMSL which is

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Speaker 2: regulatory reporting. So we now have a very complete suite

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Speaker 2: of solutions we can offer banks, brokers and exchanges around

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Speaker 2: the world to help manage risk, manage their exposure to

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Speaker 2: capital markets, and also root criminals out of the system.

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Speaker 2: I would say that it's going really well, David, because

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Speaker 2: when we assess acquisitions today, we really do do a

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Speaker 2: deep dive on the culture. We think cultural alignment values

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Speaker 2: alignment is actually a critical component of success. It says

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Speaker 2: we've been bringing new companies and capabilities into NASAC. We

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Speaker 2: make sure that we have cultural alignment and that actually

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Speaker 2: really speeds the integration along, and so we're off to

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Speaker 2: a very very strong start now with a Denzis part

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Speaker 2: of NASSAK.

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Speaker 1: When you announced the deal, you emphasize the future growth

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Speaker 1: opportunities and what this could mean for NASAK. You didn't

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Speaker 1: talk much about cost energies, which is unusual. Mainly acquires

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Speaker 1: talk about how much moneyre going to save. Now you're

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Speaker 1: doing the integration, are you looking at substantial savings as

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Speaker 1: well as the growth?

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Speaker 2: So we are looking at both. When we announced the deal,

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Speaker 2: we announced eighty million dollars of net expense synergies and

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Speaker 2: then over a medium to long term fifty to one

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Speaker 2: hundred million dollars of revenue synergies from cross selling and

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Speaker 2: expanding the business. So we do feel like we're on

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Speaker 2: track on both fronts. I would say that with the

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Speaker 2: expense synergies, we have a very clear plan, a very

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Speaker 2: clear path execution, and we expect to achieve that over

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Speaker 2: the next two years. And then we have an upcoming

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Speaker 2: investor day and will provide more details to our investors

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Speaker 2: around that. But it is us off to exactly the

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Speaker 2: start we wanted it to be, and we have a

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Speaker 2: very clear understanding of where we're going with that.

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Speaker 1: You mentioned financial crimes, and you have a report out

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Speaker 1: for twenty twenty three that certainly got most people's attentions.

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Speaker 1: Three point one trillion dollars globally in financial crime and

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Speaker 1: you divvy it up among drugs in human trafficking.

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Speaker 3: Was stugning to me how large.

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Speaker 2: It is in a number.

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Speaker 1: But how is that business doing for you? And how

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Speaker 1: much progress are you making with Verifin and the things

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Speaker 1: you're doing at financial crime.

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Speaker 2: Yeah, so our overall anti financial crime business, which includes

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Speaker 2: our surveillance business for brokers and the Verifin business, which

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Speaker 2: is true like fraud and email detection, that whole that

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Speaker 2: group grew seventeen percent, Verafinn being the one that grew

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Speaker 2: twenty five percent. And as you said, this anti financial

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Speaker 2: crime report really does expose how big is the problem.

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Speaker 2: And the problem is three point one trillion dollars in

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Speaker 2: money laundering and another half a trillion dollars in fraud

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Speaker 2: that's lost in the system and banks. I can't solve

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Speaker 2: this problem alone. So a large part of the report

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Speaker 2: is what is the collective action that has to happen

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Speaker 2: between banks and among banks, not just one bank trying

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Speaker 2: to solve it on their own, but how can you

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Speaker 2: use technology and data consortia to root the problem out

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Speaker 2: more effectively, and then also partnering with a public sector

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Speaker 2: law enforcement, how do we make sure that the wheels

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Speaker 2: are working as effectively as possible between the banks and

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Speaker 2: the public sector. So the report is a big broad report.

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Speaker 2: Verafinn does very specific work to help banks and complete

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Speaker 2: workflows across AML and across fraud, and they said it's

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Speaker 2: a big grower for us because the problem is so big.

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Speaker 1: I think I have a sense of what Nasdaq is

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Speaker 1: providing in terms of financial crime. I think I understand

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Speaker 1: thinking what you're doing in terms of compliance. What about

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Speaker 1: cyber attacks because we had another one just last week

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Speaker 1: with Echo l end. Is that something that you could

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Speaker 1: help the banks with as well, because they're struggling so well.

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Speaker 2: I would say that's a big broad challenge that every industry,

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Speaker 2: every company has, and it's something that you have to

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Speaker 2: say extra vigilant on. We do a lot with in

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Speaker 2: our own business, of course, to protect our systems to

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Speaker 2: have you know, we do and we always say that

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Speaker 2: this is not a problem for our IT security team

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Speaker 2: to solve. This is a problem for every employee to solve.

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Speaker 2: It has to be culture, people, process systems across the

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Speaker 2: whole company, protecting the NASDAC, protecting our markets, protecting our systems.

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Speaker 2: I think that in general we do focus on that

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Speaker 2: where we help with actually within anti financial crime, because

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Speaker 2: some portion of fraud is through cyber attacks, and so

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Speaker 2: we do help them try to you know, they'll the

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Speaker 2: criminals will get in by hacking into an account, business

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Speaker 2: email compromise and other things. We help the banks try

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Speaker 2: to find that and make sure that the that the

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Speaker 2: victim is protected over time. But that's our role in

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Speaker 2: that in that area.

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Speaker 1: Adina, thank you so very much for being with us.

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Speaker 1: That's Adena Friedman, she's chair and CEO, and this is

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Speaker 1: of Nasdaq, and this is Bloomberg