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The trade surveillance systems market is influenced by various market factors that shape its growth, adoption, and evolution. One critical factor is the continually evolving regulatory landscape in the financial industry. As financial authorities worldwide tighten regulations to maintain market integrity and protect investors, there is a growing need for advanced trade surveillance systems to ensure compliance. The dynamic and ever-changing nature of regulations necessitates continuous updates and enhancements to surveillance systems, reflecting the industry's commitment to adapting to regulatory requirements and mitigating compliance risks.
Technological advancements and the integration of artificial intelligence (AI) and machine learning (ML) are pivotal market factors driving the adoption of trade surveillance systems. The sophistication of trading strategies and the sheer volume of market data make it imperative for surveillance systems to leverage advanced technologies. AI and ML empower these systems to analyze vast datasets, detect complex patterns, and adapt to evolving market conditions. This factor underscores the industry's recognition of the transformative capabilities of these technologies in enhancing surveillance accuracy and efficiency.
The proliferation of electronic trading platforms and alternative trading venues is a significant market factor influencing the trade surveillance systems landscape. As trading activities become more dispersed across various platforms, including dark pools and electronic communication networks (ECNs), surveillance systems need to provide comprehensive coverage. This market factor reflects the industry's response to the increasing complexity of the trading environment, emphasizing the need for surveillance systems that can monitor and analyze diverse trading activities across multiple venues.
Operational efficiency and risk management considerations are crucial market factors in the adoption of trade surveillance systems. Financial institutions seek to optimize their operations, manage risks effectively, and safeguard market integrity. Surveillance systems play a pivotal role in achieving these objectives by providing real-time monitoring, alerting, and reporting capabilities. This market factor aligns with the industry's focus on enhancing operational resilience and ensuring robust risk management practices in the dynamic financial landscape.
The global nature of financial markets and the interconnectedness of trading activities across borders are significant market factors shaping the adoption of trade surveillance systems. As trading becomes increasingly globalized, surveillance systems must be capable of monitoring and analyzing activities in different jurisdictions. This factor highlights the industry's acknowledgment of the need for surveillance solutions with international capabilities to address cross-border trading complexities and comply with diverse regulatory requirements.
Market abuse and fraud prevention constitute critical market factors influencing the adoption of trade surveillance systems. The sophistication of market abuses, such as insider trading, market manipulation, and fraudulent activities, necessitates vigilant monitoring and detection mechanisms. Surveillance systems are designed to identify irregularities and potential abuses, contributing to the industry's efforts to maintain market integrity and protect investors from fraudulent activities.
The demand for real-time analytics and actionable insights is a driving market factor in the adoption of trade surveillance systems. As market participants seek timely information to make informed decisions, surveillance systems play a crucial role in providing real-time data analysis and actionable insights. This market factor reflects the industry's emphasis on agility and responsiveness in the face of rapidly changing market conditions, enabling timely interventions and risk mitigation.
Cost considerations and scalability are important market factors influencing the adoption of trade surveillance systems. Financial institutions weigh the costs of implementing and maintaining surveillance systems against the potential benefits, considering factors such as scalability and flexibility. The ability of surveillance systems to scale with the growing volumes of trading data and adapt to changing business requirements is crucial. This market factor aligns with the industry's focus on optimizing resource allocation and achieving cost-effective surveillance solutions.
Report Attribute/Metric | Details |
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Growth Rate | Â Â 15.4% |
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
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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