This week, NICE Systems announced its plans to acquire the start-up trade surveillance firm Redkite Financial Markets. Being familiar with both firms, I was simultaneously pleased and surprised by the action -- pleased because Redkite’s value proposition fits well into the overall portfolio of services and technologies that NICE offers the markets; surprised because real-time surveillance, while critical at this time, historically has not been at the tip of the spear when it comes to market interest.
This acquisition, which according to NICE Systems will “be immaterial to its fourth quarter and full-year 2012 Non-GAAP revenues,”could signal a bell weather moment for real-time market surveillance. What this acquisition tells me is that real-time market surveillance is here to stay -- and that the technical challenges facing both vendors and market participants cannot be ignored.
What makes this acquisition so interesting is that Redkite’s approach to the issue has been different than many of the other players within the space. Other vendors that are tackling the issue have looked at the challenges from a technological perspective -- namely, how do you solve the surveillance paradox that requires surveillance systems to both a) cover a lot of territory at a fairly high level so you can identify problems; and b) ensure that your matrix is detailed enough so that you can in fact spot trouble before it happens?