IG Group average revenue per customer unchanged from 2023 as interest income props up total revenues.
Tastytrade expansion vital to recovering lost share of wallet in key markets.
IG Group’s recognition that it needs to do more to get closer to its customers is reflected in a set of financial results for 2024. Those were massively boosted by interest income, which rose by more than three quarters from the previous year and without which the near 4% fall in overall revenue would have more than doubled. Across the UK, APAC and emerging markets, the only jurisdiction to record higher revenue last year was Singapore - where increased trading activity by larger clients produced a 6% increase in income. US revenue was also up from £140.9 million to £143.2 million.
In its financial results, IG pointed out that Singapore "delivered stronger trading revenue reflecting higher volumes from some of our largest traders."
A Tough Year for IG
IG delivers online trading platforms for retail and institutional clients. Headquartered in London, it provides clients with access to approximately 19,000 financial markets.
Net trading revenue of £844.9 million for FY24 was down from £941.8 million in 2023, but higher interest rates saw net interest income rise from £80.8 million to £142.4 million.
Something was bound to give after a period of several years where costs grew faster than revenues, so in October 2023 IG implemented an operational improvement programme which – in common with CMC – included sizeable layoffs.
Headcount at the end of the financial year (31 May) was 8% lower than when the measures were announced at the end of October 2023 - at a cost of just over £19 million – and the company is committed to further headcount reductions in the current financial year.
Total revenue of £987.3 million from 346,200 active clients equated to average revenue per customer of £2851 – approximately $3625 as of 31 May 2024 exchange rates. This figure was unchanged from 2023 and maintains the firm’s position towards the upper end of the scale of major brokers.
One of the Largest OTC Derivatives Providers
Within specific market segments, OTC revenue was down 9% and the number of clients actively trading OTC products fell by 6%. IG might be the largest provider of OTC derivatives by revenue globally but its share of primary accounts has fallen significantly in keys markets such as the UK and Singapore in recent years.
In an analyst briefing following the publication of the financial results, Breon Corcoran (who took over as CEO in January 2024) admitted that the company’s offering had become complex. “We have a very mature product that is well designed to target experienced users but in addressing the needs of these users we have obfuscated or complicated the product,” he said.
In the exchange-traded derivatives space, Spectrum (the group’s European multilateral trading facility) suffered a 12% drop in trading revenue.
In this context, one of the most significant recent developments is the expansion of Tastytrade into the UK in a bid to tap into demand for derivatives trading from retail investors.
Corcoran confirmed that the company was applying for regulatory licences to launch the platform in a number of other markets without referring to any specific jurisdiction.
It is easy to see why IG is so keen to expand the platform given that it was the stand-out performer during FY24 with a 23% increase in revenue from £170.3 million to £200.6 million. Even then, most of that increase came from interest income which was 53% higher than in 2023.
Almost a third of new accounts are from outside the US, which suggests that international demand for US options and futures remains strong and is something the company can build on.
Eyes on Cash Equities
IG has been working on an upgrade to its cash equity product since the start of this year that it intended to roll out across all markets. However, Corcoran observed that momentum has stalled on that project and it was now taking a slightly different approach.
“We were working with a third party but we probably will do more of the work internally,” he said. “Some 20% of our CFD customers in the UK also trade cash equities so it is important that we continue to improve our cash offer, but the way that we positioned that back in January is probably not the way it is going to play out over the coming months.”
Despite filling 99% of OTC orders at clients’ desired price or better in the last financial year, IG acknowledges that there is a requirement for greater focus on customers, accelerated product velocity and increased efficiency. Steps already taken include decentralising product, engineering and marketing functions.
“Our priorities are to invest in product and user experience, deliver it quickly and improve customer acquisition and retention to accelerate revenue growth,” said Corcoran. “At the same time, we are seeking opportunities to deliver higher operating leverage through lowering our cost of serve.”
He also acknowledged that the focus on efficiency and consistency has led to IG underperforming in local markets where it has been late with payment options or slow in introducing best practise in terms of local conversion or KYC processes.
These improvements will not be achieved overnight. The initial focus has to be on building better product and getting closer to customers so the company can better understand what they want and adapt its offerings as their needs change.
IG Group’s recognition that it needs to do more to get closer to its customers is reflected in a set of financial results for 2024. Those were massively boosted by interest income, which rose by more than three quarters from the previous year and without which the near 4% fall in overall revenue would have more than doubled. Across the UK, APAC and emerging markets, the only jurisdiction to record higher revenue last year was Singapore - where increased trading activity by larger clients produced a 6% increase in income. US revenue was also up from £140.9 million to £143.2 million.
In its financial results, IG pointed out that Singapore "delivered stronger trading revenue reflecting higher volumes from some of our largest traders."
A Tough Year for IG
IG delivers online trading platforms for retail and institutional clients. Headquartered in London, it provides clients with access to approximately 19,000 financial markets.
Net trading revenue of £844.9 million for FY24 was down from £941.8 million in 2023, but higher interest rates saw net interest income rise from £80.8 million to £142.4 million.
Something was bound to give after a period of several years where costs grew faster than revenues, so in October 2023 IG implemented an operational improvement programme which – in common with CMC – included sizeable layoffs.
Headcount at the end of the financial year (31 May) was 8% lower than when the measures were announced at the end of October 2023 - at a cost of just over £19 million – and the company is committed to further headcount reductions in the current financial year.
Total revenue of £987.3 million from 346,200 active clients equated to average revenue per customer of £2851 – approximately $3625 as of 31 May 2024 exchange rates. This figure was unchanged from 2023 and maintains the firm’s position towards the upper end of the scale of major brokers.
One of the Largest OTC Derivatives Providers
Within specific market segments, OTC revenue was down 9% and the number of clients actively trading OTC products fell by 6%. IG might be the largest provider of OTC derivatives by revenue globally but its share of primary accounts has fallen significantly in keys markets such as the UK and Singapore in recent years.
In an analyst briefing following the publication of the financial results, Breon Corcoran (who took over as CEO in January 2024) admitted that the company’s offering had become complex. “We have a very mature product that is well designed to target experienced users but in addressing the needs of these users we have obfuscated or complicated the product,” he said.
In the exchange-traded derivatives space, Spectrum (the group’s European multilateral trading facility) suffered a 12% drop in trading revenue.
In this context, one of the most significant recent developments is the expansion of Tastytrade into the UK in a bid to tap into demand for derivatives trading from retail investors.
Corcoran confirmed that the company was applying for regulatory licences to launch the platform in a number of other markets without referring to any specific jurisdiction.
It is easy to see why IG is so keen to expand the platform given that it was the stand-out performer during FY24 with a 23% increase in revenue from £170.3 million to £200.6 million. Even then, most of that increase came from interest income which was 53% higher than in 2023.
Almost a third of new accounts are from outside the US, which suggests that international demand for US options and futures remains strong and is something the company can build on.
Eyes on Cash Equities
IG has been working on an upgrade to its cash equity product since the start of this year that it intended to roll out across all markets. However, Corcoran observed that momentum has stalled on that project and it was now taking a slightly different approach.
“We were working with a third party but we probably will do more of the work internally,” he said. “Some 20% of our CFD customers in the UK also trade cash equities so it is important that we continue to improve our cash offer, but the way that we positioned that back in January is probably not the way it is going to play out over the coming months.”
Despite filling 99% of OTC orders at clients’ desired price or better in the last financial year, IG acknowledges that there is a requirement for greater focus on customers, accelerated product velocity and increased efficiency. Steps already taken include decentralising product, engineering and marketing functions.
“Our priorities are to invest in product and user experience, deliver it quickly and improve customer acquisition and retention to accelerate revenue growth,” said Corcoran. “At the same time, we are seeking opportunities to deliver higher operating leverage through lowering our cost of serve.”
He also acknowledged that the focus on efficiency and consistency has led to IG underperforming in local markets where it has been late with payment options or slow in introducing best practise in terms of local conversion or KYC processes.
These improvements will not be achieved overnight. The initial focus has to be on building better product and getting closer to customers so the company can better understand what they want and adapt its offerings as their needs change.
Labuan Regulator Limits FX and CFDs Brokers' Offerings Only to Currency Instruments
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
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For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
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