Yesterday, as a surprise to many the Hong Kong stock exchange placed a hostile bid to acquire the London Stock Exchange. That offer comes at a very interesting time, when the LSE itself has placed a bid to acquire Refinitiv, the market data vendor. The current situation comes to show us that facing though competition from fintech players such as crypto exchanges and peer to peer networks as well as cheap debt finance, two of the largest stick exchanges are doing what they can to diversify their revenue streams. I love numbers so let’s look at them – last year LSE´s revenue was just above £2 bln. Its cost of revenue is about £223 mln and the operating expenses were about £ 1,123 mln. The net income for LSE in 2018 was about £500 mln. The company had 4405 employees at the end of the same year. To compare the net profit of Binance, a fintech and a crypto exchange for the same period was 446 mln USD. They had about 500 employees listed on LinkedIn when I checked. In other words a couple of years old fintech company specialising in crypto transactions, ten times smaller produces very similar amount of revenue, to a 300 years old giant. To me both the numbers and the recent news suggest that fintech is winning big not only financially but also productivity wise. The future of traditional exchanges lies in mergers, innovation and culture shifts to address the needs of changing environment. Let’s watch this fintech space space together. Loads of change coming for sure. What is your take on that?
Boris Grozev is a seasoned fintech executive. Entrepreneur by heart Boris has helped number of businesses to create and implement business development and product enhancement strategies. His advisory work in Emerging and Frontier markets has promoted culture and technology change, fostered innovation and lead to tangible results. He invests in variety of asset classes and shares his experiences from the journey to financial independence. Boris is a fast learner, whose leadership abilities, ambition, stamina, passion to succeed and attitude naturally spread to others helping to achieve common goals.