Stock exchange IT providers slow to adopt blockchain

Only 5% of market infrastructure providers have deployed distributed ledger technology

Stock exchange IT providers slow to adopt blockchain

Technology companies that provide IT infrastructure for stock markets and exchanges have been slow to adopt blockchain, The Wall Street Journal reported yesterday, citing a new study.

The study, commissioned by Nasdaq Inc and conducted by technology research firm Clement, found that only 5% of market-infrastructure providers had deployed some form of distributed ledger technology. This compares with 40% that are already using cloud computing, 70% using robotic process automation and 35% providing artificial intelligence solutions.

One of the study’s more encouraging findings was that 70% of IT providers said they were working on pilot projects involving distributed ledger technology. However, 20% of respondents said they had no plans to work on the technology, while another 5% stated that they lacked the expertise to do so.

The study was conducted among chief information officers, chief technology officers and other senior technology leaders at 20 leading market infrastructure firms worldwide, the WSJ notes.

The findings appear to be in contrast with the ongoing trend of growing investment in blockchain and DLT solutions. According to International Data Corp, global corporate spending on blockchain software would reach $2.1 billion this year, up from $945 million in 2017. This wave of new investment is led by distribution, retail and manufacturing firms.

According to Arin Ray, a senior analyst at Celent, perhaps the biggest reason why market infrastructure providers have been behind the curve is the need to ensure security and stability, while navigating strict regulations.

“[E]nsuring resiliency, safety and stability of systems is very important because market infrastructure players are highly regulated and play a critical role in the functioning of markets,” Ray said, as quoted by the WSJ. He added that these companies need to ensure that any new technology can support the scale and speed to run today’s markets, while being compliant with latest regulations and standards.

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