1
00:00:00,080 --> 00:00:01,560
Speaker 1: Yes, we do have a very special guest. She is

2
00:00:01,560 --> 00:00:04,200
Speaker 1: at Diana Freebman. She is the chair and CEO of Nasdaq,

3
00:00:04,240 --> 00:00:06,360
Speaker 1: which announced it's earning today. So Jan, thank you very

4
00:00:06,440 --> 00:00:08,600
Speaker 1: much for having us down here to your headquarters.

5
00:00:08,640 --> 00:00:10,920
Speaker 2: So great to have you here, Thanks for coming. Congractuately.

6
00:00:10,960 --> 00:00:13,039
Speaker 1: Is nothing earnings. You beat expectations as far as I

7
00:00:13,039 --> 00:00:15,160
Speaker 1: can understand. At the sometimes I looked at it, it

8
00:00:15,200 --> 00:00:17,680
Speaker 1: looked like it's a tale of two companies. You've got

9
00:00:17,680 --> 00:00:21,159
Speaker 1: them more traditional trading facilities which are fine but not

10
00:00:21,239 --> 00:00:23,840
Speaker 1: growing really fast, and then you have the software part

11
00:00:23,880 --> 00:00:26,279
Speaker 1: of your business, which is really growing fairly robustly. What's

12
00:00:26,280 --> 00:00:28,240
Speaker 1: the connection between those two parts of your business?

13
00:00:28,320 --> 00:00:30,760
Speaker 3: Sure, well, just a quick round the horn on the results.

14
00:00:30,800 --> 00:00:33,320
Speaker 3: We had four percent top line growth and then six

15
00:00:33,400 --> 00:00:36,040
Speaker 3: percent growth with in our solutions businesses. And there are

16
00:00:36,040 --> 00:00:38,400
Speaker 3: two highlights for the quarter. One is our index business

17
00:00:38,400 --> 00:00:40,800
Speaker 3: that return to growth after a couple of tough quarters,

18
00:00:41,120 --> 00:00:43,160
Speaker 3: and then the other is our anti financial crime business,

19
00:00:43,159 --> 00:00:46,159
Speaker 3: which grew nineteen percent in the quarter and continues to

20
00:00:46,159 --> 00:00:48,519
Speaker 3: have a really nice growth trajectory for the business. And

21
00:00:48,600 --> 00:00:50,839
Speaker 3: as we think about how we've been able to bring

22
00:00:51,920 --> 00:00:54,160
Speaker 3: start with the foundation of the markets, and then bring

23
00:00:54,200 --> 00:00:56,360
Speaker 3: new services to our clients. We actually look at it

24
00:00:56,400 --> 00:00:58,680
Speaker 3: across three key themes. You know, what is the role

25
00:00:58,680 --> 00:01:03,400
Speaker 3: of an exchange our place to provide liquidity, transparency and integrity.

26
00:01:03,840 --> 00:01:06,280
Speaker 3: And so as we've been branching out and providing more

27
00:01:06,360 --> 00:01:09,840
Speaker 3: technology services to our corporate clients, investment managers, and to

28
00:01:09,920 --> 00:01:13,400
Speaker 3: banks and brokers, we've really keyed in on making sure

29
00:01:13,400 --> 00:01:15,560
Speaker 3: that our markets and the market tech we provide to

30
00:01:15,600 --> 00:01:17,360
Speaker 3: other markets provides.

31
00:01:17,040 --> 00:01:18,080
Speaker 2: And promotes liquidity.

32
00:01:18,520 --> 00:01:21,440
Speaker 3: And then we have transparency tools to support corporates and

33
00:01:21,480 --> 00:01:24,680
Speaker 3: investors as they're managing through the complexities of the capital markets.

34
00:01:25,080 --> 00:01:26,400
Speaker 2: And then on the integrity side.

35
00:01:26,200 --> 00:01:28,400
Speaker 3: We have our anti financial crime suite that really helps

36
00:01:28,400 --> 00:01:31,280
Speaker 3: banks and brokers really solve one of their biggest problems,

37
00:01:31,560 --> 00:01:33,520
Speaker 3: which is making sure that they can root out criminal

38
00:01:33,520 --> 00:01:35,080
Speaker 3: behavior across the financial system.

39
00:01:35,240 --> 00:01:38,200
Speaker 1: On the trading side, talk about cloud because that's sort

40
00:01:38,200 --> 00:01:40,160
Speaker 1: of a foundation as I understand it, that is really

41
00:01:40,200 --> 00:01:41,920
Speaker 1: allowing you to deliver some of the things you need

42
00:01:41,959 --> 00:01:42,600
Speaker 1: to deliver.

43
00:01:42,880 --> 00:01:45,360
Speaker 3: Yeah, so we've been migrating our own markets to the cloud,

44
00:01:45,400 --> 00:01:47,800
Speaker 3: but we spent really when I became CEO, we really

45
00:01:47,800 --> 00:01:51,320
Speaker 3: decided to invest heavily in our next generation trading system.

46
00:01:51,560 --> 00:01:53,960
Speaker 3: So we have our entire trade life cycle technology as

47
00:01:54,000 --> 00:01:58,560
Speaker 3: a cloud ready, cloud first architecture, and we're now implementing

48
00:01:58,560 --> 00:02:01,200
Speaker 3: that across our clients, and then we're also implementing.

49
00:02:00,840 --> 00:02:01,800
Speaker 2: It in our own markets.

50
00:02:02,040 --> 00:02:04,360
Speaker 3: We've moved one of our options markets to the cloud,

51
00:02:04,520 --> 00:02:06,200
Speaker 3: we are moving on a second one at the end

52
00:02:06,240 --> 00:02:08,920
Speaker 3: of the year, and we continue to partner with AWS

53
00:02:08,919 --> 00:02:11,560
Speaker 3: to bring our markets into the cloud over the coming years.

54
00:02:11,800 --> 00:02:12,760
Speaker 2: And then we're now.

55
00:02:12,560 --> 00:02:15,600
Speaker 3: Able to deliver markets out in the world regulated markets

56
00:02:15,639 --> 00:02:17,760
Speaker 3: in a cloud format, which really is kind of the

57
00:02:17,800 --> 00:02:20,040
Speaker 3: next generation of how the markets are going to operate.

58
00:02:20,240 --> 00:02:21,680
Speaker 2: So that's been a great growth driver.

59
00:02:22,000 --> 00:02:24,680
Speaker 3: Then within our anti financial crime business, that's a cloud

60
00:02:24,680 --> 00:02:27,680
Speaker 3: platform that and what's great about that is we have

61
00:02:27,680 --> 00:02:30,440
Speaker 3: twenty five hundred clients. We're able to bring the data

62
00:02:30,480 --> 00:02:33,600
Speaker 3: together and look at patterns of behaviors across.

63
00:02:33,200 --> 00:02:34,680
Speaker 2: Banks, not just within a bank.

64
00:02:35,000 --> 00:02:37,000
Speaker 3: And that's where you have to realize that criminals just

65
00:02:37,080 --> 00:02:39,399
Speaker 3: don't bank in one bank. So we have twenty five

66
00:02:39,480 --> 00:02:41,960
Speaker 3: hundred banks where we can look at transaction data and

67
00:02:42,200 --> 00:02:46,320
Speaker 3: find criminal behaviors through modern AI algorithms and get smarter

68
00:02:46,400 --> 00:02:48,560
Speaker 3: and smarter and smarter and rooting out those criminals.

69
00:02:48,680 --> 00:02:50,840
Speaker 1: Talk about the criminals as it were in the financial

70
00:02:50,840 --> 00:02:54,080
Speaker 1: integrity side of your business here Verafin. You bought Verafin

71
00:02:54,200 --> 00:02:56,200
Speaker 1: that accounted for some of the growth that you saw

72
00:02:56,240 --> 00:02:58,760
Speaker 1: from this from these reports that you just had. How

73
00:02:58,800 --> 00:03:00,120
Speaker 1: big can Verafin get for you?

74
00:03:00,480 --> 00:03:03,040
Speaker 3: Yeah, well, so Verifin within the anti financial crime business,

75
00:03:03,080 --> 00:03:05,480
Speaker 3: we have two solutions. We have our surveillance solution and

76
00:03:05,520 --> 00:03:08,040
Speaker 3: we have the Verafin and what we call fraud and

77
00:03:08,120 --> 00:03:11,320
Speaker 3: email solution that grew about twenty three percent in the quarter.

78
00:03:11,800 --> 00:03:14,600
Speaker 3: And it is a business that has a giant total

79
00:03:14,639 --> 00:03:15,519
Speaker 3: market opportunity.

80
00:03:15,560 --> 00:03:16,840
Speaker 2: I mean, you're talking about.

81
00:03:16,639 --> 00:03:19,200
Speaker 3: A four trillion dollar problem out in the world and

82
00:03:19,280 --> 00:03:22,720
Speaker 3: about a seven to eight billion dollars serviceable addressable market,

83
00:03:22,720 --> 00:03:26,600
Speaker 3: which means direct addressable market that Veraffin can can can serve.

84
00:03:27,080 --> 00:03:29,959
Speaker 3: So it has a huge growth trajectory. And what's important though,

85
00:03:30,000 --> 00:03:33,000
Speaker 3: is the banks need more and more sophisticated technology. The

86
00:03:33,000 --> 00:03:36,000
Speaker 3: cloud capabilities and the consortium data is what really makes

87
00:03:36,080 --> 00:03:38,600
Speaker 3: Verafin unique. And you know, I was just up in

88
00:03:38,640 --> 00:03:41,200
Speaker 3: Canada visiting with a team and one of the people

89
00:03:41,240 --> 00:03:43,360
Speaker 3: that we have worked with us is actually a former

90
00:03:43,480 --> 00:03:46,760
Speaker 3: victim of human trafficking. She now runs an organization that

91
00:03:46,840 --> 00:03:49,720
Speaker 3: helps other victims and then really works with law enforcement

92
00:03:49,800 --> 00:03:50,680
Speaker 3: to say, how.

93
00:03:50,640 --> 00:03:51,720
Speaker 2: Are the criminals behaving?

94
00:03:52,040 --> 00:03:53,600
Speaker 3: You know, so if you're really going to solve this

95
00:03:53,640 --> 00:03:55,920
Speaker 3: criminal problem, you have to get into the mind of

96
00:03:55,920 --> 00:03:58,360
Speaker 3: the criminal. And so what she does is she helps

97
00:03:58,400 --> 00:04:01,440
Speaker 3: us actually think about how the mom are operating, how

98
00:04:01,560 --> 00:04:04,680
Speaker 3: the transaction, how do criminals use the banks to perpetrate

99
00:04:04,720 --> 00:04:07,520
Speaker 3: their crimes, what kind of behaviors do they exhibit, so

100
00:04:07,560 --> 00:04:10,400
Speaker 3: we can tune our models, make them smarter, and continue

101
00:04:10,400 --> 00:04:12,560
Speaker 3: to make it so that the banks have a better

102
00:04:12,600 --> 00:04:16,039
Speaker 3: ability to fight the human trafficking, which is obviously one

103
00:04:16,040 --> 00:04:17,600
Speaker 3: of the biggest problems of this society.

104
00:04:17,600 --> 00:04:18,000
Speaker 2: Phasis.

105
00:04:18,040 --> 00:04:20,479
Speaker 1: So you're seeing real growth in things like Verafinn. So

106
00:04:20,920 --> 00:04:23,680
Speaker 1: the integrity aspects your business. You also announced that you

107
00:04:23,720 --> 00:04:27,320
Speaker 1: are buying a Denza fairly substantial transaction. Here. Explain how

108
00:04:27,360 --> 00:04:29,400
Speaker 1: that fits into your strategy of a role and what

109
00:04:29,440 --> 00:04:30,920
Speaker 1: that can do for Nasdaq.

110
00:04:31,240 --> 00:04:33,719
Speaker 3: Yeah, well that fits squarely into this kind of theme

111
00:04:33,760 --> 00:04:37,280
Speaker 3: of liquidity and integrity. So, and Denza is a risk

112
00:04:37,360 --> 00:04:40,760
Speaker 3: management and regulatory reporting platform that serves banks and brokers

113
00:04:40,800 --> 00:04:42,880
Speaker 3: all over the world. And so when we think about

114
00:04:42,920 --> 00:04:45,920
Speaker 3: how do you manage risk, liquidity risk, your capital market's risk,

115
00:04:46,000 --> 00:04:50,360
Speaker 3: trading risk. Adenza has a platform called clipso that squarely

116
00:04:50,400 --> 00:04:52,560
Speaker 3: meets the needs of banks and helping them manage their

117
00:04:52,640 --> 00:04:55,600
Speaker 3: risk as they're managing their transactions across the capital markets.

118
00:04:56,000 --> 00:04:58,080
Speaker 3: And then they also have a platform called Axiom that

119
00:04:58,160 --> 00:05:02,120
Speaker 3: helps banks manage all their reporting regulatory reporting obligations. That

120
00:05:02,160 --> 00:05:05,080
Speaker 3: actually fits very nicely with our surveillance and antifin crime

121
00:05:05,160 --> 00:05:08,800
Speaker 3: business because it really is a regulatory obligation compliance and

122
00:05:08,800 --> 00:05:12,400
Speaker 3: what they call RegTech. It's a growing space again, giant

123
00:05:12,440 --> 00:05:15,760
Speaker 3: total market opportunity of about sixteen billion dollars, you know,

124
00:05:15,800 --> 00:05:18,599
Speaker 3: eight billion in and of itself from a serviceable addressable market,

125
00:05:18,680 --> 00:05:22,000
Speaker 3: growing really quickly, and it really does allow us to

126
00:05:22,279 --> 00:05:25,000
Speaker 3: partner very holistically the banks and helping them solve their

127
00:05:25,000 --> 00:05:25,800
Speaker 3: biggest problems.

128
00:05:26,240 --> 00:05:27,800
Speaker 1: It's hard to have a discussing about the markets these days.

129
00:05:27,800 --> 00:05:29,760
Speaker 1: We are talking about crypto in some way, shape or form,

130
00:05:30,000 --> 00:05:32,120
Speaker 1: and you made an announcement today about pulling back in

131
00:05:32,120 --> 00:05:33,760
Speaker 1: part of crypto. At the same time you're going forward,

132
00:05:33,800 --> 00:05:37,200
Speaker 1: for example, with Blackrock applying for ANTF. What does NAZEC

133
00:05:37,360 --> 00:05:39,080
Speaker 1: want to do with crypto and what do you not

134
00:05:39,200 --> 00:05:40,159
Speaker 1: want to do with crypto.

135
00:05:40,320 --> 00:05:42,599
Speaker 3: Yeah, so we do want to help really advance the

136
00:05:42,600 --> 00:05:46,719
Speaker 3: ecosystem with our technology. We provide trading technology, surveillance technology,

137
00:05:47,040 --> 00:05:49,480
Speaker 3: and then we also of course we'll work with Blackrock,

138
00:05:49,600 --> 00:05:53,280
Speaker 3: Valcrie and others to bring tradable products onto our exchange,

139
00:05:53,520 --> 00:05:56,080
Speaker 3: so that the potential for there to be a Bitcoin

140
00:05:56,120 --> 00:05:58,920
Speaker 3: ETF that allows for retail investors to kind of invest

141
00:05:59,000 --> 00:06:03,080
Speaker 3: in the asset class through a very resilient marketplace. I

142
00:06:03,120 --> 00:06:05,680
Speaker 3: think though that as we thought about being an operator

143
00:06:06,120 --> 00:06:09,719
Speaker 3: of a custodian solution, you know, being a custodian in

144
00:06:09,760 --> 00:06:12,360
Speaker 3: the US market, we also do like to be able

145
00:06:12,400 --> 00:06:16,120
Speaker 3: to operate in a pretty well regulated environment and a

146
00:06:16,120 --> 00:06:19,320
Speaker 3: well understood regulatary framework, and right now that regulatory framework

147
00:06:19,400 --> 00:06:22,480
Speaker 3: is changing, so we decided to halt those efforts right

148
00:06:22,480 --> 00:06:25,279
Speaker 3: now and really just focus in on the tech business.

149
00:06:24,880 --> 00:06:25,839
Speaker 2: And on the listenings business.

150
00:06:25,880 --> 00:06:28,240
Speaker 1: So that's a fascinating point because I have to ask

151
00:06:28,520 --> 00:06:32,039
Speaker 1: if and when the regulations get clarified federal level, state level,

152
00:06:32,240 --> 00:06:34,159
Speaker 1: does that mean at some point down the road you

153
00:06:34,240 --> 00:06:36,600
Speaker 1: might reconsider and go into it more aggressively.

154
00:06:36,839 --> 00:06:39,599
Speaker 3: Well, we've actually built all the products we're now productizing

155
00:06:39,600 --> 00:06:41,720
Speaker 3: them to be able to sell to other market operators.

156
00:06:42,040 --> 00:06:44,240
Speaker 3: The question is, would we at some point, you know,

157
00:06:44,360 --> 00:06:46,520
Speaker 3: become a market operator. I think it really depends on

158
00:06:46,520 --> 00:06:49,040
Speaker 3: what the regulatory framework looks like, and we'll have to

159
00:06:49,080 --> 00:06:50,599
Speaker 3: see how that goes. I think that'll take a while

160
00:06:50,640 --> 00:06:51,479
Speaker 3: to shake out.

161
00:06:51,720 --> 00:06:54,159
Speaker 1: Okay, Dane, it's really great to have you to be

162
00:06:54,279 --> 00:06:56,400
Speaker 1: with you actually in your home. That's a Diana Freedman.

163
00:06:56,600 --> 00:06:59,200
Speaker 1: She is the CEO and chair of Nasdaq