The exchange of tomorrow

To be the partner of choice to our clients around the world, and to be top-ranked in all of our business segments: this remains our long-term ambition.

Our “Accelerate” growth strategy is based around a clear focus on growth, whether organically or through acquisitions – to explore new asset classes, for example. Our vision of “Exchange 4.0” will elevate our business to the next level. We deliberately and consciously take the lead with respect to relevant developments – be it in terms of technology or in dealing with regulatory requirements – thus creating new products and services which help our clients face future challenges with ease. As a strong and innovative partner, Deutsche Börse will join forces with policymakers and regulators to create new perspectives for Frankfurt as a financial centre, and indeed for Europe.

We are going to turn Deutsche Börse Group from a client-oriented enterprise into a client-centric enterprise. In order to achieve this, we constantly review what we are doing, and establish new structures where necessary. For instance, we have centralised product development, sales and marketing for the entire Group – which means that we now offer a one-stop service. Our clients are already noticing the difference, and we anticipate connecting a growing number of new clients. Moreover, we are actively targeting fast and innovative enterprises. Many of our potential clients were not even on the market five or ten years ago.

A second key aspect of our “Accelerate” growth strategy is the scalability of our business. This means generating strong revenue growth with only moderate growth in costs. In this way, we are growing the business in a sustainable manner, and will gradually reduce our dependence upon economic cycles. This remains our overall strategic objective.

At the leading edge of developments: Exchange 4.0

The pace of change in the financial industry is getting faster and faster. Big data, cloud computing and artificial intelligence are but a few of the factors driving this change. Disruptive technologies such as blockchain will redefine parts of the financial markets in just a few years’ time. Deutsche Börse Group actively invests in digital innovation – taking a pioneering role in shaping this change.

With our FinTech Hub in Frankfurt and Deutsche Börse Venture Network®, we are promoting a culture of innovation and investment, bringing together innovative companies and international investors. In March 2017, we launched a new exchange segment for successful small and medium-sized enterprises: “Scale” offers benefits to innovative companies which have already built a track record in the market. All of these are key components of an ecosystem for growth.

Likewise, we invest in disruptive technology within the company: jointly with Deutsche Bundesbank, we showcased a prototype for securities settlements based on blockchain technology in November 2016. Our investment in Digital Asset Holdings LLC, a blockchain pioneer, will also help us to realise the potential for innovation in this area. Development projects in our Content Lab include solutions based on artificial intelligence, whilst the Product Development Lab, launched in March 2017, conducts research into the potential of cloud-based technology for the financial markets.

Building bridges within Europe

Yet, Deutsche Börse is not just pursuing its own growth story, which started under “Accelerate”. We also live up to our responsibility for a strong European market infrastructure: this is about strengthening the Capital Markets Union planned by the European Commission, and ensuring the straightforward and efficient movement of capital across Europe. This is in the interests of individual countries, of pension and retirement funds, and of savers looking to invest their assets over the long term. Hence, the Capital Markets Union is also in the best interests of people across Europe, whose everyday lives benefit from modern and sustainable infrastructure. These are just a few examples for our motivation to remain actively committed to an integrated European economy going forward.

Keeping a global balance: stable financial markets

Governments and central banks increased their focus on financial markets regulation in the aftermath of the financial crisis of 2008. In the view of Deutsche Börse Group, regulation within the framework of the objectives set by the G20 has been successful overall. Financial markets have become safer. The EU drew up a regulation (EMIR) designed to regulate over-the-counter (OTC) derivatives trading. Even ahead of the start of EMIR implementation in June 2016, Eurex Clearing developed a central counterparty for the clearing of OTC derivatives products. Transactions formerly executed on a bilateral and uncollateralised basis are now increasingly settled through a central clearing house.

Clearstream was connected to TARGET2-Securities (T2S), the European Central Bank’s settlement platform, in February 2017. This allows clients to use Clearstream as a central access point for domestic and international securities settlements, in commercial bank or central bank money. It is in cross-border and cross-market initiatives such as these that Deutsche Börse Group sees an opportunity to contribute to the stability of financial markets in Europe. T2S has in turn facilitated the development of numerous products which will gradually be introduced.

Growth in many areas

Bucking the general market trend, the foreign-exchange trading platform 360T® continued its marked growth during the year under review. New products will be launched to generate further growth in 2017. Likewise, European Energy Exchange successfully boosted its market share to 30 per cent – in a market characterised by off-exchange trading. Amongst other factors, this is due to demand for safe and structured solutions for the trading and clearing of energy and commodity products. We expect the need for protection in energy trading will continue to support our business.

Lots of things are changing – at many points throughout the company. Our way ahead will lead via sustainable growth in various areas, safeguarding our technological leadership under the heading of “Exchange 4.0”. For 2017, we expect consolidated net profit for the period to increase between 10 and 15 per cent. Our approach in this regard encompasses sustainability criteria – such as the United Nations’ Sustainable Development Goals – to be integrated into our business model and our reporting.