In the future, Theodor Weimer wants to focus on organic growth with small to medium-sized acquisitions at Deutsche Börse. "We want to grow by 10 percent per year," said Weimer. In doing so, he sets himself the goal of steadily developing the company's business model. Focusing only on trade is not enough. Information technology is at the center of this strategy, said the CEO of Deutsche Börse AG at a SAFE Policy Lecture on 12 July. In his speech, Weimer talked about the strategies of stock exchanges worldwide, the orientation of Deutsche Börse and the role of regulation.
Looking at the competition, Weimer said that growth was necessary: "Those who do not grow will mercilessly be sorted out." He referred to the position of Deutsche Börse as the largest player in Europe and the most important derivatives trader. With a market capitalization of 22 billion euros, Deutsche Börse is also one of the highest valued companies per employee, said Weimer. Above all, the young employees in the IT sector are crucial for the future success of Deutsche Börse.
"Stock exchanges are not just exchanges, but capital market infrastructure providers," said Weimer. There would be stock exchanges that adhered to the traditional understanding of roles, others would strengthen their supraregional importance through acquisitions and others would withdraw from the traditional stock market business.
The strategy of Deutsche Börse, however, aims according to Weimer with the help of medium and small acquisitions on dominance in the technology sector, on the post-trade and data trading. Above all, a functioning and high-performance IT is important, especially against the background of already around 100 million transactions and several hundred million orders per day. "We want to invest heavily in this area," said Weimer.
The post-trading business is not be operated in this form by any other European stock exchange and should also be expanded, according to Weimer. Responsible for the safekeeping, management and accounting of assets after the purchase is the subsidiary Clearstream, which holds about 14,000 billion euros in securities. "We believe in this business," said Weimer. However, it limits Deutsche Börse's "firepower" for acquisitions in order to maintain the important "AA rating" for Clearstream and not to fall behind the competition.
Regulation beneficial for Deutsche Börse
According to Weimer, the data trade is another future-oriented business: "Data are resources," he clarified, referring to the "Regulatory Reporting Hub". In this business, Deutsche Börse accesses the raw data of financial players such as credit institutions, processes them and forwards the reporting to the supervisory authorities. According to Weimer, Deutsche Börse is already generating double-digit million in sales. Around 2,200 banks are currently using this service.
This example shows that the regulation has a double-edged meaning for Deutsche Börse: "We suffer from regulation like the banks, but we also benefit from it," said Weimer. Supervision, for example, entails complex regulations that could create new business areas for the stock exchanges, such as reporting. Likewise, as regulation progresses, the number of trades on the stock exchange will increase, and the rules will enhance the transparency and integrity of the exchanges, said Weimer.
Weimer is optimistic about the future of the stock markets: According to Weimer, growth is not only dependent on market volatility and interest rate developments, but also on management decisions and process changes.