1. Retail Trading

The evolving landscape of national stock exchanges now places significant emphasis on retail participation. Brokers observe a clear trend as individuals, even if not directly trading on the exchange, prefer well-known platforms over niche alternatives. This paradigm shift prompts questions about how exchanges like Eurex can adjust their marketing to attract retail traders.

Furthermore, the growing influence of retail traders, driven by a mix of professionals and enthusiasts seeking excitement, is reshaping market dynamics, underscoring the need for exchanges to adapt to this changing landscape.

2. Digital Assets

The recent approval by the SEC for spot Bitcoin ETFs marks a pivotal moment for digital assets as an influx of institutional and retail investments into the asset class is expected, thus enhancing the legitimacy of digital assets at the same time. Tokenisation is poised to dominate pilots for digital assets at regulated firms, particularly for bonds. Further, the UK’s upcoming tokenisation regulatory sandbox could eventually mean secondary markets for tokenised financial instruments.

In the world of central bank digital currencies (CBDCs), it seems jurisdictions are finally turning their digital currency plans into reality. Spain is testing a wholesale CBDC, and Kazakhstan has now launched the digital tenge. The advent of CBDCs holds the promise of catalysing innovation in financial services, not least in shortening settlement cycles and thus reducing investment costs and risks, promoting economic growth and resilience on a country-by-country basis.

3. Artificial Intelligence (AI)

Some prominent exchanges are examining ways to employ AI to enhance anti-crime measures, leveraging predictive capabilities for swift identification of criminal behaviour. Collaborating with banks and exchanges, the software aids in reducing and managing threats across the sector.

The Financial Stability Oversight Council, composed of leading financial regulators, acknowledges that AI could drive innovation and efficiencies in financial institutions. However, the fast-paced evolution of technology demands ongoing vigilance from both companies and their regulatory overseers.

4. Race to the cloud

Big cloud providers have made their inroads into financial market infrastructure: Nasdaq partnered with Amazon, and Google invested $1 billion in CME Group for advanced cloud infrastructure. Microsoft invested £1.5 billion in London Stock Exchange Group (LSEG) for analytics and cloud.

Subsequently this past autumn, Aquis Stock Exchange became the first recognised investment exchange (RIE) to run a cloud-based matching engine, and the LSEG streamlined their operations by running Oracle Fusion Cloud and Oracle Financial Services Applications on a singular, unified platform. Expect to see an increasing number of exchanges transitioning to cloud in 2024.