Redkite’s nuanced approach has been to focus on the front-office behavior and let the technology follow suit. The challenge, of course, is that front-office behaviors are constantly changing; thus, you need to have some deep pockets to make sure your technology evolves appropriately. 

Nice’s acquisition is an indication that real-time market surveillance is gaining importance among institutional players and that Redkite’s approach may be the one that wins. As a group of former traders, Redkite looked at the challenge as an opportunity to delve into the murky world of real-time activity -- mapping out specific indicators of activity and creating a system to identify those activities and alert users when indicators were tripped.

It is fairly easy map out one or two behavior types and create a system that identifies aberrations from the base line. What is difficult is to do that for a whole host of dynamically changing behavior types. Not only does it require an in-depth understanding of what actually goes on in the mind of a trader; it requires deep pockets to fund that ability. Likewise, as with any dynamic system, activities are constantly changing -- methodologies evolve, and what was new yesterday is old today, and nobody knows what new types of activities will be enabled tomorrow.

By merging Redkite’s unique take on real-time market surveillance with the institutional strengths of NICE’s existing portfolio of services, Redkite will be green lighted to take its platform to the next level. NICE, meanwhile, will be able to extend its footprint into what promises to be an area of growing importance.

The real question will be whether the community will embrace this type of alliance. By acquiring Redkite, NICE has the opportunity to offer its client base a much needed service while offloading a significantly complex activity that nobody wants to manage. However, for NICE to fulfill that opportunity, it will need to follow up its investment in the Redkite product with sustained development and backing; otherwise, this interesting investment will rapidly become a footnote in Wall Street technology acquisitions.