Image Source: Nasdaq
Anna Irella and Noor Zaynab Hussein
(Reuters)-Exchange operator Nasdaq Inc announced Thursday that it will acquire anti-financial crime software company Verafin for $ 2.75 billion in cash, significantly expanding its reach in the regulated technology market.
Founded in 2003, Verafin provides more than 2,000 financial institutions in North America with a cloud-based platform to help detect, investigate and report money laundering and financial fraud.
Nasdaq aims to provide Bellafin technology to 250 banks, exchanges, broker-dealers, buy-side organizations and regulators that use trade surveillance systems, the company said.
With this agreement, the Exchange Group is pursuing a strategy to double its entry into the money laundering prevention software sector and relocate the company as a leading financial technology and data vendor.
NASDAQ is best known for operating exchanges in the United States and around the world, but it is also a company that provides market technology to banks and other financial institutions.
It has a strong foothold not only in the trade monitoring software market, but also in the trade technology systems sector. It made its first move in the money laundering prevention software market in September when retail and commercial banks announced artificial intelligence technologies to help automate research.
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“The money laundering and fraud detection issues have not yet been fully resolved,” Valerie Banartsarner, senior vice president of market technology and head of sell-side and buy-side solutions at Nasdaq, said in an interview. I am. “Our acquisition doubles our belief that this is a confusing area and can have a significant impact.”
NASDAQ’s impetus comes from banks and other financial companies seeking to automate many of the more expensive and complex back office processes in order to reduce costs and increase efficiency.
This includes compliance and monitoring capabilities, and costs have increased significantly following the strict regulatory crackdowns of the last decade.
Still, according to the United Nations, up to $ 2 trillion is laundered worldwide each year, which is up to 5% of global GDP.
The acquisition represents another milestone in NASDAQ’s commitment to diversify its revenue streams from low-fee transactions to areas such as technology and data.
Revenues from NASDAQ’s market technology and investment intelligence businesses have increased 54% since 2016, with non-trading revenues accounting for 73% of the Group’s overall revenues.
The deal is the largest deal for NASDAQ since it acquired the Nordic exchange OMX for $ 3.8 billion in 2008.
Nasdaq will fund the transaction and will combine $ 2.5 billion in debt with cash on hand to increase earnings per share from 2022.
Report by Noor Zaynab Hussein of Bangalore and Anna Irella of London. Edited by Sriraj Kalluvila and Mark Potter.