Trade Surveillance Systems Market Analysis

Trade Surveillance Systems Market Overview

The trade surveillance systems market has seen significant growth due to the growing demand for monitoring trade activities in financial institutions and the increasing need for mandatory and regulatory compliance. As per MRFR, the trade surveillance systems market has been growing steadily from the past few years and is expected to reach USD 8.57 million by 2032 from USD 2.35 Billion in 2022 and is expected to grow at a 15.4% CAGR during the forecast period, 2023-2032.

The global market has been classified on the basis of component, deployment mode, organization size, and region.

Figure 1: Trade Surveillance Systems Market Size, 2024-2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Based on component, the global trade surveillance systems market has been divided into solutions and services. The solutions sub-segment is further divided into surveillance, risk & compliance, analytics & reporting, case management, and others. Moreover, the service segment is bifurcated into professional and managed.

By deployment mode, the global market has been segmented into on-premises and cloud.

By organization size, the global trade surveillance systems market has been segmented into large enterprise and small and medium enterprise (SME).

Based on region, the trade surveillance systems market is segmented into North America, Europe, Asia-Pacific, the Middle East & Africa, and South America. In 2020, North America dominated the market and is expected to reach USD 5.8 billion by 2030, registering a CAGR of 13.60%. The US is also expected to witness significant growth over the forecast period

Source: Industry Expert, Secondary Research, and MRFR Analysis

Industry News of Trade Surveillance Systems Market

• On Feb. 21, 2023, Trading Technologies International, Inc. (TT), a leading global provider of professional trading software, infrastructure, and data solutions, announced a commercial partnership with Eurex Frankfurt AG, a leading European derivatives exchange to offer EnLight directly from its platform. 


• The partnership will enable TT to offer direct access to the Eurex EnLight selective request-for-quote (RFQ) solution from within the TT platform. The agreement will give banks and large institutions on TT's global distribution network the opportunity to streamline their RFQ and larger-scale, complex trade execution activity on a single screen.


• On Jul. 21, 2022, Bloomberg announced a strategic investment in Insightful Technology, a London-based provider of the trade surveillance solution, Soteria Integrated Compliance. The partnership will integrate Soteria with the existing Bloomberg Compliance Solutions, including Bloomberg Vault, compliance system, and other real-time Bloomberg surveillance systems and preventative controls. This collaboration will advance Bloomberg's surveillance, trade reconstruction, and behavioral analytics capabilities across more than 120 channels.

COVID-19 Analysis

COVID-19 outbreak has caused an unprecedented global emergency, which has negatively impacted businesses across various industry verticals. Governments are making interventions in response to the spread of coronavirus. The impact has been felt by large enterprises as well as SMEs around the world. To keep the employees safe and adhere to the stringent guidelines laid by the governments, enterprises have adopted the work from home policy, which is creating a significant demand for the trade surveillance systems market during the pandemic. 

Trade surveillance systems have also witnesseda demand from SMEs as they provide all the related services under a single contract. It enhances the overall working experience of the employees so that the management can focus on developing strategies to boost sales and profitability. As organizations begin to prepare for the post-pandemic world, employees now expect to have the flexibility and capacity to work remotely regardless of whatever the future of work includes, given that employees are not returning to pre-COVID-19 conditions.

The COVID-19 outbreak may quickly lead to the biggest emerging market crisis of the modern era. Trade surveillance systems have witnessed a fall in domestic and external demand, unprecedented capital outflows, higher external borrowing rates, commodity bust, and currency depreciation. At the same time, emerging market governments are increasing domestic borrowing by conservative strategies to assemble fiscal resources to fight the pandemic.

Market Dynamics

The global market for trade surveillance systems is expected to grow steadily during the forecast period. The growth can be primarily attributed to the growing demand for monitoring trade activities in financial institutions and the increasing need for mandatory and regulatory compliances. Moreover, the integration of AI and ML in surveillance systems is expected to create opportunities for market players during the forecast period. However, a lack of awareness is likely to restrain the growth of the global market during the forecast period.

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  Drivers

  
  

Growing Demand for Monitoring Trade Activities in Financial Institutions

Trade surveillance is actively monitoring proprietary or client trades to detect and analyze suspicious trading patterns. In the financial services industry, trade surveillance is described as the process of monitoring and analyzing an organization's trading behavior that directly or indirectly includes market abuse or market manipulation techniques that might result in legal action, criminal charges, or even corporate closure. Financial institutions recognize immediate needs, identify teams, and specify requirements, with a focus on the "at risk" sectors and enhanced preventative capabilities. This phase typically begins with a current state evaluation of surveillance capabilities, followed by a budget and execution plan based on the assessment's findings and recommendations.Moreover, the technology will continue to assist financial institutions in dealing with the increasing business difficulties when customers want flexibility, regulatory compliance is developing, and other such relevant roles in the industry

Thus, the growing demand for monitoring trade activities in financial institutions is expected to drive the growth of the global trade surveillance market during the forecast period

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  Opportunities

  
  

Integration of AI and ML in Surveillance Systems

Across the globe, governments have invested heavily to build a surveillance infrastructure. There are millions of cameras, but no one to monitor them 24/7.  On the other hand, artificial intelligence (AI) can analyze every frame and provide real-time analysis, potentially saving millions of lives. Numerous nations are deploying advanced AI surveillance technologies to map, monitor, and manage individuals to achieve various policy goals, some of which are legal, some of which violate human rights, and some fall into a grey area.

 Moreover, the ability of AI to self-learn is one of the reasons it is having such a significant effect on the market. Nowadays, it recognizes things in the actual world, compares the findings to the proper annotations (supplied by humans), and attempts to improve further. AI-powered video monitoring software reduces the time spent on surveillance, allowing security officers to be more productive and successful in their duties. 

By removing the need to continually watch video displays and automating the "detection" function of surveillance: confirming and responding to critical occurrences, AI technology allows operators to focus on what they do best. In this manner, it is continually learning and improving. With each repetition, the chances of errors are reduced and approaches closer to or even better than human error. Thus, the integration of AI and ML in surveillance systems is expected to present lucrative growth opportunities for the players operating in the global trade surveillance market.

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  Restraints

  
  

Lack of Awareness

The trade surveillance systems market is evolving at a rapid pace. Trade surveillance is actively monitoring personal or client trades to detect and analyze suspicious trading patterns. Trading in the securities markets has progressed technologically and geographically, in which traders use complex algorithms to place orders automatically.As trading in the capital/security markets progressed, traders discovered new techniques to manipulate prices, eventually losing investor trust and creating a negative impact on the market. However, the lack of awareness about its operational capabilities and lack of hands-on experience of the employees limits the growth of the trade surveillance systems market. Moreover, the dependence of third-party vendors regarding functionality also increases the risk of data breaches significantly. Thus, the lack of technical expertise and rising security concerns are likely to hinder the growth of the global trade surveillance systems market during the forecast period.

Market Segmentation

The trade surveillance systems market has been classified on the basis of component, deployment mode, organization size, and region.

Based on component, the trade surveillance systems market has been segmented into solutions and services. The solutions sub-segment is divided into surveillance, risk & compliance, analytics & reporting, case management, and others. Moreover, the service segment is bifurcated into professional and managed. The solutions segment is expected to account for the larger market share during the forecast period.

Based on deployment mode, the trade surveillance systems market has been segmented into on-premises and cloud. The cloud segment is expected to register the higher CAGR during the forecast period.

Based on organization size, the global market has been classified into large enterprise and small and medium enterprise (SME). The large enterprise segment accounted for the larger market share during the forecast period.

Regional Insights

By region, the trade surveillance systems market has been segmented into North America, Europe, Asia-Pacific, the Middle East & Africa, and South America. North America accounted for the largest market share of 36.66% in 2018, with a market value of USD 226.8 million, and is expected to register a CAGR of 11.9% during the forecast period. Europe was the second-largest market in 2018, valued at USD 212.6 million; it is projected to register a CAGR of 13.6%. However, Asia-Pacific is expected to register the fastest CAGR of 14.2% during the forecast period.

GLOBAL: TRADE SURVEILLANCE SYSTEMS MARKET, BY REGION, 2020 (% SHARE)

Source: Industry Expert, Secondary Research, and MRFR Analysis

North America is expected to be the largest market as the region has a higher demand for trade surveillance systems. Financial organizations in the region are currently replacing their legacy technologies and seeking advanced trade surveillance and market compliance solutions to implement proactive surveillance strategies and improve compliance infrastructure. Asia-Pacific is projected to account for a share of 22.2% in 2018 in the trade surveillance systems market. Although most companies in the region are using a reactive strategy to trade monitoring in recent years, with the introduction of post-transaction controls, proactive technologies are gaining popularity in the regional market.

Competitive Landscape

The global market for trade surveillance systems has witnessed significant growth over the forecast period due to the rise in the adoption of mobile applications to monitor expenses. There are several domestic, regional, and global players operating in the trade surveillance systems market who continuously strive to gain a significant share of the overall market.

Key Players

• Nasdaq, Inc. (Israel)


• FIS (Fidelity National Information Services, Inc.) (US)


• NICE Ltd (Israel)


• OneMarketData (US)


• ACA Compliance Group (US)

The prominent players of the global trade surveillance systems market include NICE Ltd., FIS, Software AG, Nasdaq, Inc., Aquis Exchange, Trading Technologies International, Inc., Trillium Management, LLC, SIA S.P.A., IPC Systems, Inc., B-Next, ACA Group, Scila AB, OneMarketData, LLC, Crisil Limited, and Trapets AB.

Recent Developments

• In June 2020, NICE Actimize, a leader in autonomous financial crime management, agreed to buy Guardian Analytics, a leading AI cloud-based financial crime risk management service provider. Financial services firms of all sizes use Guardian Analytics' powerful real-time behavioral analytics and machine learning solutions. Guardian Analytics, which is cloud-based, simplifies deployments and continuous operations while increasing operational resource efficiency. In addition, firms of all sizes will benefit from the unique combination of NICE Actimize and Guardian Analytics' fraud and anti-money laundering capabilities, which will enable them to adopt the industry's most innovative solutions faster and better protect their assets and consumers


• In July 2019, FIS strengthened its global technology leadership serving merchants, banks, and capital market presence by acquiring Worldpay, one of the world's largest global eCommerce and payment technology firms. The combined firm will have a pro forma revenue of approximately USD 12 billion and over 55,000 workers. As a result, FIS is well-positioned to drive its growth and advance the way the world pays, banks, and invests with a best-in-class portfolio of solutions for payments, banking, and capital markets


• In September 2018, Software AG acquired Built.io to expand its leadership in hybrid and cloud integration. Built.io's usage of contemporary node.js technology allows a new and rapidly increasing community of developers to complete integration projects more quickly and for less money. Built.io flow makes the integration platform as a service (iPaaS) more accessible to new developer communities’ line-of-business users. Built.io flow, when combined with Software AG's superior iPaaS, IoT, API management, and B2B capabilities, creates a comprehensive integration offering that is unrivaled in the market.


• In July 2020, Aquis Technologies started working alongside the University of Derby to investigate the use of machine learning for market surveillance and monitor trading activity. Both collaborated on the research & development of machine learning (ML) technologies


• In June 2021, Trading Technologies International, Inc. launched support for Cboe U.S. Options and planned Day-One Connectivity to Cboe Europe Derivatives via the TT Platform. Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, supports the trading of U.S. equity, index, and ETF options on the Cboe Options Exchange (C1) through the TT platform.

Report Overview

This study estimates revenue growth at global, regional, and country levels and offers an overview of the latest developments in each of the sub-sectors from 2018 to 2027. For this analysis, MRFR segmented the global trade surveillance systems market has been segmented based on component, deployment mode, organization size, and region.

BY COMPONENT

• Solution
  
  
  
  • Surveillance
  
  
  • Risk & Compliance
  
  
  • Analytics & Reporting
  
  
  • Case Management
  
  
  • Others
  
  
  
  


• Services
  
  
  
  • Professional
  
  
  • Managed
  
  
  
  

BY DEPLOYMENT MODE

• On-Premises


• Cloud

BY ORGANIZATION SIZE

• Large Enterprise


• Small & Medium Enterprise