Hello, everyone, and welcome to Plus500's Capital Markets Day for 2022. Thank you for joining us today. I'm Rob Gerner, Head of Investor Relations at Plus500, and I've been with the group for 2.5 years, having worked in IR across a range of different industries and sectors over the last 17 years. Today's event has been designed to help you understand more about our business, our technology, and our growth potential. It also gives you the chance to hear our management team discussing their specialist areas in detail. Here is the agenda for the day. We start with an introductory interview with our chair, Professor Jacob Frenkel. After that, there'll be presentations on our investment case, growth opportunities, and financial dynamics of the business from our CEO, David Zruia, and our CFO and VP of Business Development, Elad Even-Chen.
We will then hear from our Chief Product and Risk Officer, Dani Magner, after which there'll be a 10 minute break. Following that, there'll be sessions from Nir Zatz, our Chief Marketing Officer, Al Yaros, our Chief Technology Officer, and Alon Cohen Naznin, our Chief Operating Officer. We'll then hold a Q&A session with the management team. During the session, please feel free to submit your questions on the webcast platform, and I'll put them to the team during the Q&A session. I would urge you to post your questions before we get to that session to ensure we have time to adequately respond to them. With that, let's start the main business of the day with the first session, an interview with our chair, Professor Jacob Frenkel. Professor Frenkel, thank you very much for joining us today.
My pleasure.
Let's start with a bit about your background. There are people that are watching this today that you've met, some that you haven't met. For those that you haven't met, could you give us a bit of an overview of your career?
Well, thank you for the opportunity. I've been involved in the financial industry and in economics in general for over 40 years. I started my career as a professor with the University of Chicago, where I dealt primarily in financial markets, in foreign exchange markets, in macroeconomics. I became the chief economist and the head of research of the International Monetary Fund, where I spent about five years dealing with global policy matters. Subsequently, I became governor of the Bank of Israel, which is the Central Bank of Israel, where I spent for more than a decade as governor, dealing with the inflation problem in Israel, opening foreign exchange market, and integrating the Israeli economy into the world financial system. When I left that public sector service, I joined the private sector.
I started as chairman of Merrill Lynch International based in London. I did it for about five years. Then vice chairman of AIG based in New York, and I did it for another five years. Then most recently, for more than a decade, as chairman of JPMorgan Chase International. Throughout that period, I've been involved with the Group of Thirty, which is the G30, a group of financial leaders, central bank governors, ministers of finance. I've served there as chairman and CEO for about a decade, and then chairman of the board of trustees for over a decade. That's in a nutshell.
Very good.
... preparing me just for the culmination of my career, I would say. Chairman of Plus500.
Brilliant. Thank you. How did that role come about? Why did you join Plus500, and how have you found the first 18 months? What are your initial thoughts?
Well, that's a fascinating question because it marked a fundamental shift in my orientation as well as changes of location. I moved from the U.S. back to Israel during the beginning of COVID in 2020, and I had the opportunity to meet a fascinating group of people that happened to be the leadership, the management of Plus500. Young people, energetic, shining eyes, intellectual, entrepreneurial. Israel being the hub of new technologies, so-called startup nation, it was very natural that this match will come, and orientation is how to make that company, which is a global company, even more global, and that's where I saw a good challenge.
Fantastic. Can you talk a little bit about the structure of the board and the functioning of the board, dynamics of the board since you've become chair last year?
Well, we have an extremely well-diversified collegial board, people who come from three continents. We have an extremely balanced gender distribution, professional distribution, professional background, and collegial. That's the most important part. Everyone sees his or her role as how to help the company and its management to achieve its goals. I think that during the past 18 months, we have made a difference. We are very impressed with the way that management operates, and we are standing ready to help the mission.
Given your background in the U.S., can you talk a little bit about the opportunity for Plus500 in that market?
Well, I believe the U.S. is a very large market that has not yet been fully cultivated for Plus500, and I believe there is a great opportunity. The reason is that, Plus500 is known to be a frontier technological company that comes from the startup nation, the frontier place for developing technologies, and the U.S. market is aware of it. What we can do, I believe that the U.S. market, we can be their, what we call, a disruptor, something which is very positive, shaking the tree. In fact, we have already made two acquisitions. Recently, we bought two companies that are integrated into our world. We are looking into other activities. We have, after all, the know-how, we have the management, we have the awareness of the needs, and I therefore believe that, looking forward, the U.S. will become an important center for our activity.
Great. Thank you. Finally, what does the future hold in your view for Plus500?
Well, as you may guess, I'm very optimistic about Plus500 as far as the future is concerned. We are on the right track. We have extraordinary good technology. It's well-recognized all over the world. We have unique management team. We have a strong board that supports the management team. When I look at it all together, I must be optimistic, and we have the capabilities to carry out our aspirations. We have accumulated significant amount of cash ready to be deployed. As one realizes it, we are very prudent, and that's why we have so much cash. We will not use it carelessly. When the opportunity arises, we will use it for both acquisitions as well as organic growth. Our eyes are global. We are, of course, focusing now on expanding our operations in the US, but we will definitely deepen our operations all over the world.
We are a true global company. With the great team that we have and with the great technology and with the great commitment, I'm optimistic about the future, and I must say, I'm very pleased to be where I am.
On that positive note, Professor Frenkel, thank you very much. Let's hear from David Zruia, our CEO, the next session. Thank you.
Thank you.
Thank you, Jacob and Rob, for that very interesting session. Hello to everyone who has joined us today. We are so excited to be hosting our first ever Capital Markets Day, and we are very pleased that you have taken the time to join us. The aim of today's event is to go through key elements of our investment case, business model, and major growth opportunities for Plus500. We also wanted to give you the opportunity to see firsthand the quality and breadth of our senior management team as each of them discusses their area of responsibility and how we are working together to deliver sustainable success to our business and our shareholders. My session today will focus on the key areas of our investment case, our strategic priorities, and our major growth opportunities. Before we get started, I will introduce myself.
I've been CEO of Plus500 since April 2020, having been with the business for around 12 years, including as Chief Operating Officer for seven of those years. In that role, I innovated the operational team, developing and streamlining activities such as customer onboarding, KYC and AML processes, payments, and customer service. As CEO, over the last two in a half years, during which time we've initiated a new strategic roadmap, I have led the repositioning of our business as a global diversified group. Over that period, we have delivered consistent financial and operational results, executed the first ever acquisitions in our history in the exciting new and sizable growth markets of the U.S. and Japan. You will hear a lot today about how we are building our strategic position and our plans to further develop it in the future to drive growth going forward.
I wanted to start today with a quick snapshot of our business. Listed as a FTSE 250 company on the London Stock Exchange, Plus500 is a global multi-asset fintech group operating proprietary technology-based trading platforms, offering our customers a range of trading products, including OTC, share dealing, as well as futures and options on futures. To our OTC product portfolio, we offer over 2,500 different underlying global financial instruments in more than 50 countries and in 30 languages. Our trading platform operates on a 24/7 basis so that our customers have a consistent and seamless service. Since our IPO in 2013, we have built a base of over 23 million registered customers, growing revenue by around 23% CAGR and delivering average EBITDA margins of approximately 57%.
At the heart of our business is our fully owned and operated proprietary technology, which powers our trading platforms, our marketing activities, and our operations. This is our major differentiator and has helped us to deliver significant operational and financial performance, has driven our superb record of cash generation with cash balances at the end of H1 2022 standing at around $1 billion. This has enabled us to reward our shareholders with substantial returns. This financial strength has also provided us with a strong foundation from which to invest in growth, both organically and through targeted acquisitions, to ensure that Plus500 continues to add to its already strong and consistent track record. This track record has been driven by a proprietary technology, which is Plus500's key enabler and competitive differentiator. It powers our operations and trading platforms and is supported by an industry-leading full-cycle R&D team.
This slide shows how we have continuously driven technological innovation for the benefit of our customer over more than a decade. In this period, every year, we have launched a new product or introduced new features or tools. All of this is to ensure our customers have a best-in-class experience. Every element of our technology is seamlessly interconnected across our operations, product, and marketing capabilities, supported by a robust system architecture. Our technology delivers a broad range of specialist services within each of these areas, supporting the continued development of our product portfolio. These specialist services include search and data analytics capabilities in marketing, payments processing, and customer onboarding. In addition, the ability to rapidly add new tools, features, and financial instruments to our product offering to speedily address evolving customer and market requirements.
Those specialist services enable our business to remain agile and scalable as we continue to grow our business around the world. This slide shows how we plan that the structure of Plus500 will look in the medium term with a diverse and growing business. This will be the result of our delivery against our strategic roadmap as we continue to launch additional new products in the currently existing and new markets, as well as driving monetization and retention technologies to further improve the lifetime value of our customer base over time. Turning now to our key priority areas in ESG. The group's approach to ESG is aligned to its purpose of enabling trusted and intuitive access to financial opportunities, supported by ongoing engagement with our customers, shareholders, employees, and other key stakeholders.
Firstly, we continue to ensure that we deliver best-in-class customer care and education services and capabilities with measures such as negative balance protection and maintenance margin protection on our OTC platform, which have always been offered to all the group's OTC customers in all markets across all underlying assets. To help inform customers of the potential risks involved in trading, we have introduced a number of educational and training tools and features on our platforms in recent years. You will hear about the latest developments in this area in our upcoming product session. We also aim to ensure that Plus500 is an exciting and enjoyable place to work, and that we attract and retain the most highly skilled people in the industry.
As Jacob mentioned earlier, we aim to ensure that the composition of our board remains very well diversified, with board members continuing to add significant quality and value in helping to oversee the business. At the heart of our business is our people, from our board to our management team, to our employees. Our board, with inspirational leadership from Jacob, provides clear guidance for our management team. The board is of a high caliber, has a valuable mix of experience and deep knowledge of the technology and financial sectors across a range of strategic markets that are relevant for our business. In addition, our board is highly diversified from a gender perspective, and 50% of the members are women.
Our management team, as you will see today, is highly skilled and all are expert specialists in their fields of responsibility, supported with strong backgrounds in technology, finance, operations, marketing, and strategy. They provide clear and visible leadership to our people, and as a team, have helped to create a high-performance organizational culture. This culture empowers ongoing improvements in employee development, attraction, and retention through training, learning, community engagement, welfare, and career progression. Our headquarters and R&D centers are in Israel, a major global hub for technology and innovation, where there is a skilled and educated workforce, which is highly trained in technological development. In addition, we have a long-standing productive relationship with the Technion – Israel Institute of Technology in Haifa, where our headquarters are based.
Israel is ranked third globally as a technology ecosystem, and there are over 6,000 tech startups now operating in this country, with over 300 R&D hubs of global tech firms now established. With a headcount which has grown significantly over the last 12 years, emphasizing Plus500's ongoing growth journey, we have maintained a clear and compelling organizational culture. This culture reflects Israel's cutting-edge technology-based environment. I hope this short video of some of our people gives you a sense of our organizational culture.
I really enjoy the challenges that we are facing on a daily basis to get the support from the management and other teams in the department, in the company. That's actually what I get here.
Me, I'm here for 11 years, and yet I'm still learning and having new experiences and new things that I'm dealing with that I have never done before.
Here, we work on a really complex software. The software eventually serves millions of people. We need to pay attention to a lot of details, and makes all the team that runs the software very professional.
I think that working in Plus500 helps me to trust my creativity and to think outside the box.
For me, Plus500 is all about people. I love getting up and getting here every morning. The culture is very family-oriented. Everyone's comfortable.
Plus500 is a great mix between being a leading company with a lot of benefits, with mentality of the startup. We can make fast decisions, talk to everybody without any bureaucracy. It's very productive and also very. It's a lot of fun during the job. I like it a lot.
It's a family.
Professional.
Enjoyable.
Empowering.
Rewarding. That I have never done before.
Here, we work on a really complex software. The software eventually serves millions of people. We need to pay attention to a lot of details, and makes all the team that run the software very professional.
I think that working in Plus500 helps me to trust my creativity and to think outside the box.
For me, Plus500 is all about people. I love getting up and getting here every morning. The culture is very family-oriented. Everyone's comfortable.
Plus500 is a great mix between being a leading company with a lot of benefits, with mentality of the startup. We can make fast decisions, talk to everybody without any bureaucracy. It's very productive and also very. It's a lot of fun during the job. I like it a lot.
It's a family.
Professional.
Enjoyable.
Empowering.
Rewarding.
You can see the strength of our business based on the power of our technology. As a result of which we are extremely well-positioned to capture the major market opportunities available to us. The scale of the numbers on this slide hopefully give you a sense of the overall market opportunity available to us globally, and particularly in the U.S., we are seeing an emerging generation of traders who are seeking technology-based trading platforms to support their daily needs in speedy and seamless manner. This is the case across a range of trading sectors, including OTC, share dealing, and futures. With digital channels driving increased trading accessibility for these sophisticated customers, and with ongoing regulatory focus across the industry, Plus500 is extremely well-placed to access this market's opportunity as a compliant technology-based operator with a diversified and highly accessible product portfolio for customers.
In this context, there are four elements to our strategic roadmap, which as we execute against them, will deliver growth and value for the business and shareholders. We'll continue to enter new markets, launch new products, expand our OTC offering in new and existing markets, and deepen our engagement with customers. We will further invest in the strategic growth roadmap through ongoing organic investments and by actively targeting additional acquisitions. To cover the first two areas of our strategic roadmap, new products and new markets, I will specifically outline the significant opportunity for Plus500 in the U.S. futures market. Firstly, on the U.S. retail opportunity. Thanks to the efforts of the major futures exchange, the futures industry in the U.S. has become much more accessible to the retail audience. This has been particularly driven by introduction of Micro E-mini contracts and other retail-focused products.
Volume of these products has grown around 25% in recent years, according to the CME. This is a clear sign that the retail segment in futures is becoming much more accessible, which is the result of the significant effort by the various exchange groups to deliver and develop tailored products for the retail trading audience. In this significant retail futures trading space, we are launching an intuitive new trading platform, specifically designed and tailored for retail traders. This will enable us to benefit from a continuous increase in accessibility to the futures market for the retail trading audience. In this retail space, we aim to establish a new technology-based presence utilizing our technological expertise and solutions as we have done with our OTC product offering. That will help us to offer innovative, easy-to-use trading platform to enable the retail audience to trade on futures and options on futures.
As a full clearing firm member of the CME Group, we also see ourselves as a technology-based disruptor in the institutional market, where we have built a new strategic position as a market infrastructure provider. We will be supporting institutional clients with our brokerage execution and clearing services. In this area, there are a number of major futures commission merchants and introducing brokers, with whom we have the potential to support going forward. Accordingly, we have established the required resources to support us in targeting these firms with our services in the future. This is an extremely exciting and potentially sizable opportunity for Plus500, and is very different from our historical B2C-focused offering. It will be driven by our healthy balance sheet and our highly differentiated technological capabilities. Looking in more detail at the next element of our strategic roadmap, expanding our OTC offering in both existing and new markets.
Our OTC product offering remains attractive for customers around the world, as well as providing them with the ability to trade on leverage and to access market liquidity. Our product offering is aligned with regulatory requirements, ensuring customer welfare and education through elements like our free unlimited demo account and negative balance protection for the OTC product offering. With our offering, customers have the comfort that they are trading on attractive commercial terms, and they can access everything they need through one multi-channel solution. With a long track record in creating a market with our OTC product offering and our innovative trading platform in this area, we offer customers a wide range of over 2,500 financial instruments in a range of asset classes on a global basis.
We have continued to add more financial instruments, features, and analysis tools to our OTC product offering, as well as launching new technologies to enhance our offering. This has helped us to grow our market-leading position in our existing strategic markets. In addition, we aim to further expand our geographic reach and footprint by entering new markets as we have done this year in Japan and Estonia. On to the fourth area of our strategic roadmap, deepening engagement with our customers. Since becoming CEO, I have ensured we are even more focused on this area with additional investment and resources going into them over the last two years. From an activation perspective, we have over 23 million customers who have registered with us but may not have traded with us or have only traded with us in the past.
This means that they know us and have taken the time to register with us, so much of the work of our marketing machine is already done. It's less about attracting them, but more about reminding them and reactivating them. We do this through targeted intent-based marketing focused on these registered customers with further investment in platform development and performance marketing in this area to drive customer conversion from registration to trading. In addition, to retain customers for a longer period of time, particularly our high-value customers, we have introduced new initiatives and features and enhanced our product offering. Our new premium service is a good example of such an initiative. Nir, our CMO, will discuss our customer engagement retention initiative in more details later on. I'm pleased to say that we are seeing success in our efforts to drive deeper in customer engagement.
Customer longevity, defined by the percentage of OTC revenue driven by OTC customers who have traded with us for more than one year, has increased over the years, standing at 82% in H1 2022. This strong level of customer loyalty shows that our customers are trading with our platform on a sustainable long-term basis. This is the consequence of the continuous investment in our product offering, our consistently innovative mindset, and our ongoing customer-focused approach. Finally, I'd like to sum up the Plus500 investment case. Our consistently strong performance over the last decade is due to the strength and capability of our proprietary technology, which drives operational excellence, our market-leading product offering, and our cutting-edge marketing approach. In addition, we have developed a robust and comprehensive approach to risk management supported by our technology, which supports our business as it grows and diversifies.
Our flexible and scalable business model ensures we have adapted to changes in the market environment and in customer behavior. Our agility as a business and as a management team, supported by ongoing investment, is also highlighted by our continued progress in diversifying our revenue base, geographic profile, and product profile.
Thanks, David, and nice to meet you all. I'm Elad Even-Chen, the group CFO and VP Business Development, and have been with Plus500 for the last 12 years. I lead our financial divisions in our investment and expansion plans into new and current territories, including our strategy and approach on acquisitions. As the group CFO, I also oversee the group's financial performance, including treasury, consolidated financial statements, tax, and oversee our investor relations activities and legal matters. I will talk today about the financial dynamics of our business, covering our focus on investment in growth, and I will outline our medium-term revenue objectives. I will start today with a reminder of our strong track record of profitable growth and cash generation. As context here, Plus500 has been on incredible journey since our inception in 2008.
Initially, as a private company, which went public and listed on the UK market through AIM in 2013, with a market cap of just $200 million. In 2018, we moved to the main market and became a FTSE 250 company and listed in the premium segment, and now have a market cap of around $2 billion. Today, we're proud to have been in the public markets for a 10th year and generated a return for our shareholders of 15x on the share price, and a significant contribution of $1.6 billion as shareholder returns. Throughout our history, we have maintained an extremely strong balance sheet, remaining totally debt-free since then.
Furthermore, the business has a superb record of very high operating cash conversion, ranging between 88% and 113% since our IPO in the year of 2013. With a low-cost operating model supported by a lean, efficient, and flexible cost base, our average annual EBITDA margin since our IPO is approximately 57%. Over that timeframe, we have delivered a revenue CAGR of 23%, which has been driven by the continued growth of our customer base. four million customers have registered up until the end of 2013, while over 22 million customers were registered up until the end of 2021.
With $2.7 billion of cash generated and accumulated net profit of around $2.2 billion since our IPO, this has enabled us to return a total of $1.6 billion to shareholder returns in that time. This includes $1.2 billion in dividends and $0.4 billion in share buybacks. This slide shows more clearly the growth trajectory of our revenue, EBITDA, and shareholder return. Over the last decade, we have delivered a compound annual growth of around 30% in EBITDA and around 33% in revenue. At the same time, we have achieved a sustained margin performance and generated significant amounts of cash flow. These financial metrics have been fundamentally driven by the power and capability of our proprietary technology and the specialist expertise of our people in delivering our technology to customers.
Our board continues to assess the availability of excess capital going forward to ensure there remains an optimal balance between shareholder returns, investment in future growth, and in driving business continuity over the long term. In particular, we aim to ensure that appropriate levels of available capital are maintained for required regulatory purposes, working capital, risk management, and hedging and clearing activities. We estimate that our current required capital as at 3 June 2022 is approximately at the level of $525 million. We maintain significant headroom in terms of cash balances against our capital requirements. This is supported by the cash generative dynamics of Plus500, which ensures a relatively high level of capital capacity available to the business.
This level of surplus capital, which stood at $470 million at the end of the first half of 2022, gives us a huge confidence that we can continue investing in future growth and make further healthy capital returns to our shareholders. It is also worth noting that over the last three years, we have delivered a return on equity of around 75%. We're a highly diversified business, which is vital from the commercial and risk management perspectives, and have a substantial amounts of high value customers with no specific concentration risk. We operate across a wide range of operating licenses and entities, and we are also highly diversified across the level of trading, which takes place over the various OTC asset classes and other products.
Additionally, we continue to aim for greater product diversification to enable the strategic roadmap implementation as a multi-asset fintech group, and therefore assess the relevancy of the blockchain opportunity for Plus500. On that note, I want to briefly touch base on the blockchain opportunity within which cryptocurrency is an interesting potential area of growth for Plus500, which we would aim to deliver over the years through our acquisition strategy. There is growing regulation in this area with standardized regulation being introduced by 2024 in Europe through MiCA, and growing focus in the US by the SEC and CFTC. We believe that entering this market as a regulated operator may represent a long-term opportunity for Plus500. More specifically, as crypto remains a relatively fragmented competitive landscape, and the blockchain technology continues to evolve.
We believe that such an additional technological capability may enable us not only to offer our services in new markets, but rather also to additional customers across the globe. Our customers trade on a wide range of OTC asset classes, with nearly half of our OTC customers consistently trading on more than three asset classes. This shows the sophistication of our customer base and the future potential that can be optimized as we continue to increase our range of products and asset classes. The diversified trading behavior of our customers has very important benefits for Plus500. Firstly, from a risk management perspective, we do see a greater level of natural hedge due to the diversification across the various asset classes, which is derived from both short and long positions, and therefore the net exposure is lower and manageable in an efficient manner.
Secondly, Plus500 is not dependent on a specific trend related to one asset class, but rather provides a superior technological solutions for customers to trade on whatsoever is relevant for them. Additionally, what we can learn from this slide is even more interesting once we analyze the group's capability to deliver its multi-asset fintech group strategy. We have already delivered over the years such a solution to millions of customers, and therefore we feel so proud and confident to continue the journey by adding new products in current and new markets. To support the continued growth and scale of our business, we have a robust regulatory framework in place. This also ensures we're aligned with the relevant regulatory requirements whereby we operate and offer our services.
Our portfolio of licenses, many of which are now unique and can be somewhat time-consuming and costly to obtain, is a very valuable asset for Plus500. In addition, the regulatory environment supports compliant operators, and therefore our regulatory framework is a key differentiator for us and a barrier to entry for new entrants. Our regulatory framework also ensures that the diversification of our business continue to be based on a clear regulatory foundation, and we maintain close and productive relationships with each key regulator and are always on top of any regulatory change which may be implemented. At this stage, future regulatory developments are expected to be manageable, with no major regulatory changes currently anticipated in the coming years.
Within the last couple of years, we have added new licenses in the U.S., Japan, Estonia, and the Seychelles, either through license application or by acquiring local businesses which have a license, all to achieve our strategy of international expansion. Through these channels, we will continue to serve the needs of our business as we continue to expand into new geographies and products. I wanted to briefly discuss in more detail the nature and value of our customer base. To highlight the hidden value and also the strength of our business, it is key to better understand the dynamics behind the scenes of our customers who not only continue to use our trading platforms over the years, but rather are very active and frequent with their trading activity.
Over the volatile periods of the last few years, we had tremendous success with our marketing initiatives and the level of new customers which started to use our products. For example, 86% of our 2020 revenue was generated by customers who continued to trade with us in 2021 and in the first half of 2022, and contributed to the group's revenue in those periods. Therefore, when we start a new year, it is not only a new financial year, but very much equipped with our high-value loyal customers whose churn is much lower than the average churn across the wider customer base. This is directly linked to the long-term value of Plus500 customers, which for the period between 2015 and the first half of 2022, contributed approximately $5,300 in revenue per active customer on an accumulative basis.
The next slide highlights the importance of our customer deposits in demonstrating the confidence that customers have in our platforms and the resilience of our products. In 2021, customer deposits were $2.1 billion. In the first half of 2022, it was $1.2 billion. You can see that customers who registered in 2017 continued to deposit in each of the following years, increasing value potential from these customers over time. This is an ongoing theme for Plus500 in every year.
Not just being dependent on new customers to come, but actually the tail is the one to lead the performance thanks to our superior technology and retention capabilities. As time goes by and we continue to optimize our market share and brand recognition even more, the tail will be even stronger, and such a performance is the one to enable us to appreciate the strength of our business. Let's look at how we approach our investment in growth, particularly our acquisition strategy. Firstly, it is important to note that we are acquiring actual assets to support our geographic and product expansion. These businesses mainly have a license to operate in a market where we may not have a presence, and a potential technology which may support product expansion. We have made acquisitions in the U.S. and Japan over the last 18 months.
These acquisitions are relatively small in consideration size and have high-quality management who have deep knowledge of the market and industries in which they operate. In addition, the acquisitions in the US and Japan bring us regulatory licenses in new and substantial markets for Plus500, which is a crucial element of our acquisition rationale. We're in an extremely strong financial position to activate potential acquisition opportunities as they arise. Furthermore, we have established over the years very robust technological, operational, and financial foundations. These foundations can support such acquisitions to ensure seamless integration and rapid commercial activation of the acquired businesses. We take a conservative approach to acquisitions from a consideration perspective with the focus on small to medium-size bolt-on acquisitions, which we believe will drive value.
We'd also look at slightly larger deals than we have historically executed if we believe that we can derive appropriate value from them, and if they are the right strategic, operational, and cultural fit for our business. Based on our track record so far, acquisitions are easily and quickly integrated into our existing business. This is due to the time and effort we take before acquisitions in terms of target identification, due diligence, as well as integration planning of certain elements which are subject to the deal's closing conditions. As part of our comprehensive and enhanced due diligence process, we run detailed financial modeling on our acquisition targets to ensure they have the potential to deliver high level of returns to our business over time. Of course, we also perform detailed due diligence on the various regulatory, legal, risk management, and operational dynamics involved within each potential transaction.
Looking ahead, we're actively targeting a number of possible acquisitions, focusing on adding new products to our portfolio and entering new markets by acquiring companies which hold a regulatory license in a particular market. We're also looking to add licenses organically by going through license application processes with local regulators. In particular, in our OTC product offering, we are looking at specific regulatory opportunities in the Americas, Asia, and the Middle East being a particular focus. Within these regions, there are some regulated markets that we are targeting in which we do not currently operate, where there is a huge growth potential with substantial untapped customer demand available. In addition, as David mentioned earlier, we have an exciting opportunity in the U.S. as a provider of brokerage execution and clearing services. We are already making progress in expanding our clearing capabilities with other exchanges in the global futures market.
David outlined earlier our strategic roadmap for growth. I wanted to give you, for the first time, the numbers behind that roadmap, in particular, the five-year annualized revenue objectives to be generated from our growth opportunities based on our detailed and rigorous modeling in this area. We expect to add an incremental annualized revenue of $500 million to the group's current annual revenue base in five years' time from the activation of the growth opportunities we have discussed today. From new markets and new products, we expect to deliver an additional $250 million annualized revenue in five years' time, with a substantial opportunity, in particular, being the U.S. futures market. We also expect to add another $250 million in annualized revenue in five years' time by expanding our core OTC offering in new and existing markets.
Additionally, we put a significant focus on deepening customer engagement, in particular by activating a portion of the 23 million registered customers on our platforms and by driving up the lifetime value of our active customers. I should be clear that these numbers are annualized, approximate, and are based on our current view of the prospects of the business at this particular point in time and in the context of the unpredictable market conditions experienced in recent years. Clearly, there remains a number of substantial opportunities to optimize over coming years, and we are well-positioned to be able to deliver against these opportunities. Thanks to our agile business model, our technology offering, and our very robust balance sheet. We hope that by outlining these revenue objectives, you are able to have a tangible sense and deeper understanding of the sustainable opportunities available to us in coming years.
Finally, I wanted to summarize why we believe Plus500 represents such an exciting prospect for our shareholders. This is in the context of market volatility, which when it occurs, presents an opportunity for us to drive a step change in our investment in the business and helps to optimize our growth profile. With robust financial foundations and a consistent operational track record, we're able to invest in our business, both organically and through acquisitions to capture the growth opportunities we have outlined today. Furthermore, with our flexible and agile business model, which provides us with the ability to maximize market opportunities as they arise, we're able to deliver further scale and ultimately drive continuous cycle of investment over time. Importantly, in order to deliver a long-term value creation outlook, we are making significant investment right now to accelerate this growth cycle for our business and our shareholders.
Just to sum up my session. Plus500 has a long track record of financial delivery and remains extremely well-positioned for future growth. Our position is supported by a rigorous technology, our international brand recognition, our global regulatory framework, our robust approach to risk management, and our strong balance sheet. Our financial strength enables us to invest both organically and through acquisitions in delivering on a number of substantial growth opportunities over the coming years, particularly in the U.S. The strength of our balance sheet also enables us to invest in technological developments in our R&D centers in Israel. Thank you all. I will now hand back to Rob for the next session.
The next session is on product, and I'm here today with Dani Magner, our Chief Product and Risk Officer.
Hi, Rob. Pleasure being here with you and speaking to our community of investors.
Thanks for joining us. Let's start with you, a bit about your background. If you could just give the viewers an overview of your career and background to date.
Yeah, sure. Actually my path with Plus500 was very diverse. I'm a computer engineer. I graduated from Technion – Israel Institute of Technology in Haifa, where I was a teaching assistant and also president of the student association. My first job was at Plus500 working as an operations engineer under the COO. I was then promoted to be head of operations and had the pleasure of building, establishing, formalizing various teams across the company, in a very transformational era in Plus500. I took on the role of head of risk as well. After some time, I went to pursue my Master's of Management degree in the United States. I returned to Plus500, became head of product, and then became chief product officer.
Thanks, Dani. You cover product, and you cover risk. Can you talk a little bit about your responsibilities and how the team is structured?
Yes. The product and risk department actually consists of three teams. One of them is the content department, which is responsible for creating and maintaining all of our content across the entire Plus500 ecosystem. The content is available in 30 languages. We'll be soon adding another language. The other two teams are the product and risk teams. These teams are very, very unique, very different. Let's start with perhaps the product department. The product department consists of product managers each responsible for a certain field of the Plus500 product. Now, when I say Plus500 product, it is a very broad term because since Plus500 is based very heavily on proprietary technology, every aspect of our business is considered to be a product.
It's not just the platforms and what the customer sees, but it's also our marketing technology, our operations, our back office systems, our financial processing systems. All of that is considered part of our product, as well as the entire trading and risk management engine. All of that is covered by the product department, and we have a dedicated product manager for each such field. I'm sure that the other presenters today have discussed and will discuss many of the achievements that are powered by these product managers. The third department is the trading and risk department, which is responsible effectively for maintaining, running, and operating this magnificent machine that is called the Plus500 trading platform. What's very unique about this team is that it consists of engineers only.
This is, I think, quite unique in our sector, and this really captures the essence and the spirit of how we treat our product. It's a technology product.
Great. Let's dive into the product. The killer question is, what makes our product so compelling for customers? Why do they use us?
That's a fantastic question because I know that all of the presenters today have discussed the many advantages that we have in our marketing technology, in our operations technology under the hood. Let's speak a little bit about what the customers are seeing. I think that pretty much from the company's inception, Plus500 was all about delivering a very focused trading experience to customers. Now, what does focused trading experience mean? Back in the day when the company just started, it was about making a more intuitive and understandable user interface that customers can log to the platform and start trading without seeing too much noise in the screen. We remain committed to that idea to this day.
Nowadays, many companies offer similar products, and many copied Plus500, but we're still very much committed to maintaining this spirit of advancing with our technology, but keeping it very focused. Now, I'm not necessarily saying that less is more, but I am saying that too much is too much. Before we introduce a new feature, we think about this very carefully, and we make a very thorough analysis over what the customers want. Would they engage with that or not? We start deploying these features as experiments, meaning that we will only develop them for a certain platform, for example, Android, iOS or the web trader. We'll see the adoption rate, the usage by clients, and if we see they use it on a large scale, we will introduce it to everyone else.
That's really interesting. In that context, can you talk a little bit about your approach to product development?
I would say that there are several factors that drive product development strategy. The first one, and maybe the most important one is customer satisfaction and customer feedback. We constantly collect and monitor customer feedback through customer support, through what people are writing on the app stores and the review websites. We collect that feedback, and we try to address customers' requests. One such example is, for example, introducing the dark mode to our apps that customers have requested for a very long time, adding different chart types or different resolutions or other tools that customers have asked. The second thing is, of course, product strategy and the company's general goals of entering new markets, new jurisdictions, and developing entirely new products from scratch to capture new business verticals. Before we do any of that, we experiment as much as possible.
We conduct A/B testing as a philosophy. Right now we're actually running 11 different A/B experiments while we speak, and the experiments could be very big or large, but they could also be very small, such as where exactly do we place a certain button.
That's great. Let's switch tracks a little bit. I think it'd be really interesting for the audience to understand how we create a quote on our OTC platform for financial instruments. Can you just talk a little bit about that, please?
Absolutely. The process really begins with obtaining the proper licenses from the global exchanges that we connect to to source the information of the underlying quotes that we will use to create our CFD quotes. After we have obtained those licenses, we connect to different global data providers. These are huge companies providing market data to banks and other financial institutions, and every instrument in our platform is connected to three different data providers. Why three? Because if something goes wrong with a certain provider, the other one kicks in immediately. If the second one also fails, we have the third one as a backup. Now, once we get the quote from the data provider, a series of automated checks is run in the background to make sure that the quote is valid.
If it is not valid, we automatically switch to the second priority or the third priority. After we have determined that we've got from the provider is valid, we would calculate the spread using our internal mechanism that makes sure that we take into account all of the considerations that we want when we price that CFD. After we've calculated the spread, another series of automated checks is run to make sure that the quote that we've created after applying our spread is still valid. If something goes wrong, the process restarts. If it's okay, the quote go through to our platform, and the customers get the price that he sees he can trade on. Now, the real cool thing about it is that all of that happens in real time. It's fully automated, and it happens on almost 3,000 instruments at once.
The entire system is built on automation, and if something goes wrong, we immediately get an alert and act upon it immediately.
Fantastic. Now let's turn to customer education. I know you've done a lot on this. It's been a big focus for your team. Can you talk about developments this year, particularly around the Trading Academy?
Oh, yes. Let me just start by saying that, one of the most important educational tools that Plus500 has always had, and many other companies have followed, is so absolutely free, unlimited demo account that simulates the real environment as is. We always offered it, and it was a very important educational tool. This year, we also took into account feedback that we got from various customers, as well as our understanding of regulators' intention, encouraging companies to improve their education materials, and we have created the Plus500 Trading Academy. There are three main resources in the Trading Academy. The first one is our traders guide videos. It is a series of videos explaining key concepts in CFD trading, the more basic ones and the very advanced ones.
The second component is our e-book, which is available as a PDF file that you can download and read quietly, or you can browse it interactively in a website. The third one is our comprehensive set of frequently asked questions. All of these are located in one place called the Trading Academy, with a very convenient tool that can help you search and browse through these materials. It's accessible not only from our website but also from our apps. You can easily access it from your mobile phone and get all of these resources, including the videos, and move seamlessly between the Trading Academy and our platform.
Okay, that's great. Let's talk a little bit about user experience and listening to customers. I know you've got a really interesting projects in the pipeline. Can you talk a little bit about that, please?
Oh, yes. Absolutely. We're talking about Plus500 Insights or Insights Plus, as we call it. Let me just start by telling an anecdote about how it started. We conduct user interviews very often, and we ask clients what do they like about the platform? What are we missing? This one client especially struck my imagination because he said, "You know, guys, I really enjoy using Plus500. The platform is great, but there's one thing that I'm really missing, and that is when I trade with Plus500, it feels like it's me alone against the big capital markets." I thought, how can we empower this customer, and make him feel like he's part of this huge community of Plus500 traders? That's how we came up with Plus500 Insights.
Plus500 Insights effectively allows customers a unique visibility into the trading actions of other traders on an aggregated, anonymous level. We're talking about exposing Plus500's big data to a single client to allow him to make more informed trading decisions based on community trends, such as what are the most traded instruments, which instruments are the most profit-making for customers, as well as the most loss-making. Maybe customers want to take the other side of this trade, and all of this information is customizable. Customers can play with different settings, with different filters, and get the exact information to make it actionable for them. Instead of just giving the customers the ability to look at a single trader, which we're not doing, we're allowing customers to look at what millions of other people are doing.
Okay, we heard earlier about our strategy getting into new products, into new markets. Can you talk a little bit about some of the new products we're looking at and where we are today on that?
Of course. In the past two years, Plus500 allocated a lot of resources and energy to get into new markets. The first platform that we've introduced is Plus500 Invest, allowing customers to actually trade real shares in real markets. The platform is available across all of our platforms, iOS, Android, and web app. It looks and feels very similar to Plus500 and really captures the same essence of the app. Customers can move very easily between the different modes, CFD and Invest. The other two big projects are focused on the exciting U.S. market that we're about to enter, the futures market. We actually adopted the twin-track approach. We're developing two different apps in parallel for the futures market.
The first one is called TradeSniper, and it is based on the technology that we've acquired from the acquisition of the companies that allowed us to enter the US market. TradeSniper is intended to be our first-ever, actually, the world's first-ever, retail-tailored trading app for futures. There's no similar product in the world, and we're hoping to be the first one to capture this segment. This would be our platform to experiment with the market, to deploy Plus500 philosophy, and acquire data that will help us going forward. The second effort is creating the Plus500 Futures application, the big Plus500 product that will connect to our OTC and Invest platforms.
By following this twin-track approach with having one platform ready and already deployed and the other one following soon, we're hoping to capitalize on both the first-mover advantage with TradeSniper and the second-mover advantage with the Plus500 Futures app.
You touched on TradeSniper there. Can you talk a little in a little bit more detail about the features and benefits of TradeSniper, the app itself?
Sure. TradeSniper is based on the technology that we have acquired when we entered the U.S. market, but we're bringing in the spirit and essence of Plus500. What does that mean in practice? First of all, the user interface is going to be very similar to Plus500, very understandable, and to our knowledge, it's going to be the first app ever to allow this in the futures market. The other thing is that we're going to allow account opening and account funding within the app. Now, it may seem obvious for other markets like the OTC market or the share dealing business, but in the futures market, specifically in the retail futures market, there is no such thing.
We're going to be the first app out there that's going to be a one-stop shop to open an account, fund it, and trade, yet we still maintain powerful features as advanced orders, as advanced charting, and on top of all of that, we offer 24/7 support, and we offer an unlimited demo account, which is also going to be a huge thing in this market, making TradeSniper the first ever, retail-tailored futures trading app, very accessible, and we're very excited about that. The platform is already live.
Thank you. Now, this session is mainly about product, but given your remit on risk management, let's talk a little bit about our approach to risk management while we have you. Could you just talk about your strategy and approach in that area?
Of course. First of all, our risk management is also part of our product. As I mentioned earlier, our product captures pretty much everything in Plus500 and specifically, risk management. Our risk management is very heavily based on technology, on automation, and it is managed by engineers. Up to two years ago, we didn't have any hedging at all. We just kept monitoring the exposures with our tools and made sure to mitigate the exposure levels once they are beyond a certain threshold. We internalize a lot of the activity in the platform, so we never got to very high or too risky exposure levels. Two years ago, we started targeted hedging, and we're now examining more automated hedging. This is still a process that we're looking into.
In general, the idea is not to try to analyze or forecast the markets in a very distant perception or a distant view, but rather than analyze how the platform works and make sure that our thresholds are maintained.
Finally, let's finish with, you know, what are the key messages you want the audience to take away from this session?
As Chief Product and Risk Officer of Plus500, I would say that the most important thing for us is to stay ahead of the game in terms of technology. The technology really powers pretty much every aspect of our product. Our focus in the upcoming year is going to be the deployment of Plus500 Insights, which is a very exciting product that we're adding to our platform, and our focus on the U.S. markets with our two trading apps that we're developing on the twin track approach. I think we have a great product right now, and I'm extremely excited about what the future holds for the Plus500 product, and I can't wait to see what happens.
Great. Thank you, Dani, for your time. Really appreciate it. There'll be a 10-minute break now, so we'll see you very shortly. Thank you.
Hi, everybody, and welcome back to Plus500's Capital Markets Day. I'm Nir Zatz, Plus500 Chief Marketing Officer, and I will talk to you today about our multi-channeled approach to marketing, which continues to drive high returns on investment. I've been with the company for nearly seven years and run a team of around 35 people across a range of marketing specialisms. I'm also responsible for Plus500's marketing investment, which is budgeted around $200 million a year. Prior to joining Plus500, I held senior roles at Intel Corporation. I hold B.S. In Industrial Engineering and Management and MBA from the Technion. Let's talk about our marketing approach. We have a multilayered and diverse approach to marketing, fundamentally driven by our technology.
With the support of key strategic partners such as Google, we operate multiple marketing initiatives in paid search and organic search, as well as running numerous content marketing and PR campaigns. We also launched this year for the first time, a major global advertising campaign, which I will discuss in detail later on. Plus500 is considered to be a leader within the marketing technology space, and our superior technology is always being optimized to deliver continuous improvement in our results. We have four very clear objectives in marketing. Firstly, we aim to drive growth as well as to optimize our returns. We firmly believe that these two elements are not mutually exclusive and can be achieved together. Not trivial, but we have a long track record of delivering both, and we are very focused on continuing to build on this track record.
Our second objective is to ensure we're always early birds at the marketing table. Our culture is to always have first mover advantage by testing and trialing new ideas and innovations in the marketing world. This drives our innovative mindset and keeps our approach to marketing on the cutting edge. Thirdly, on performance marketing, we always look to ensure our bids are optimized and our budgets are flexible. This helps us to maximize our marketing potential when demand is high and to maintain a strong presence during periods of low demand. In this way, our marketing investment is always flexible and constantly optimized. Our final marketing objective is ensuring Plus500 is always at the forefront of the minds of our existing and potential customers. We want to be constantly relevant to a range of customers and potential customers.
This includes those new to trading through educational and training features, like the new trading academy we launched this year that Dani talked about earlier. We also offer this type of customer a free demo account on an unlimited basis. This is something that we have had since our inception. To ensure we are always relevant to more experienced traders, we offer sophisticated features and analysis tools like +Insights, which Dani also mentioned, as well as the premium service, which I will discuss shortly. These key objectives are being delivered by our marketing team based in Haifa. We are a very lean team of around 35 people, which means that we need to make sure to choose the best, many of whom are highly skilled technologists, and most are top-of-class engineers, which we think is unique in the marketing world.
People that are data-driven and are not in love in their ideas and creatives, but with measured impact based on data. These talents, together with our technology, is what helps us manage an annual budget of approximately $200 million in an efficient and effective way. Our marketing department is very diverse and multicultural, which supports creativity, collaboration, and effectiveness. Within the marketing department, we have teams with specific focus on key areas such as search, social, creative, and data, as you can see on the right-hand of the slide on the screen. Importantly, all these teams are constantly collaborating and communicating with each other, ensuring a consistent, joined-up approach for every marketing campaign we run. Our unique and wholly owned marketing technology remains a fundamental driver to our performance.
We continue to invest in our marketing machine through targeted and efficient marketing technology initiatives, including big data and artificial intelligence technologies. This helps us drive customer acquisition, activation, retention, and long-term monetization. In this way, we are able to drive customer retention and cohort value over the long term. Our marketing machine is efficient, scalable, and agile, with all data fully segmented from top to bottom, ensuring that we are able to achieve our objective of driving volumes while at the same time maintaining a high ROI. Like our marketing machine, our retention machine was also fully developed and maintained in-house, supported by semi-automated processes to ensure communication promptness and drive campaign scale. We define retention as all marketing communications after the user is registered on our platform. Our retention approach is based on tailored communications at scale.
We use clear and well-known measurement techniques in developing our retention campaigns, including A/B testing and control group methodology. This helps us to fine-tune our segmentation strategies and our campaign planning and management. At any time, we are running between 100 and 150 active retention campaigns with 4 market event campaigns distributed to customers on a daily basis. As David mentioned earlier, the objective of our retention programs is to increase the lifetime value of our clients, which we did very successfully last year with a strong uplift in this metric. We have also driven activation by looking to convert customers who have registered but not yet traded. This has been achieved through tailored reminder notifications, for example. We also send customer targeted news flow in areas where they have been interested before.
We look to reduce churn by notifications around potential trading insights and ideas. Plus Insights will provide us with yet another, but even more sophisticated tool in this area. I wanted to highlight one of these retention tools in more detail. Our recently launched premium service, which is now available to around 5,000 customers, has already been a real driver of LTV. Customers receive a welcome pack with 24/7 premium customer support and have access to a dedicated team of client managers. They also have access to educational webinars, weekly analysis, and tailored emails, and receive educational materials on training on trading. All these elements add up to a significant value-added service for these customers with a view to retaining them over a long period of time. I would now like to discuss the significant progress we've made on developing the Plus500 brand this year.
Historically, our investment in brand awareness and recognition has focused on sports sponsorship in key strategic markets. This has been very valuable to us in these markets in terms of building local and global brand awareness, and we continue to have excellent relationships with Atalanta in Italy, Young Boys in Switzerland, and Legia Warsaw in Poland. Furthermore, we'll continue to investigate and assess more sports sponsorship agreements where they make commercial sense to us. This year, we have supercharged our brand awareness activities with a major global advertising campaign starring Kiefer Sutherland, which was launched on major media channels in a number of strategic markets. The campaign was developed in partnership with McCann Worldgroup, the technology-focused agency of McCann Worldwide, and was fueled by the findings of a comprehensive research and insights project.
The campaign aims to convey three important features of Plus500 trading platform, its trustworthy nature, its intuitiveness, and its offer of useful market insights for customers. The campaign centers on the idea of trading with a plus, helping customer with information and insights, no matter the extent of their trading experience. With this campaign, we have moved from a simple brand logo to a clear message of what Plus500 does, and Plus500 equals trading. With that, I will now play the advert.
You decided to start trading. Better use Plus500. What? He meant to say why. 'Cause trading with Plus500 is like getting into that exclusive party that you weren't even invited to. Plus, having someone there you can count on. Trying bridge for the very first time. Plus knowing Grandma's on your team. Hi, Grandma. Meeting other intelligent life forms. Plus, being able to communicate with them. He likes your shirt. Jumping off a cliff. Plus having wings. A goose? Works for me. I get it. It's like catching your parents in an intimate moment. Ew. Stop right there. Plus500, it's trading with a plus. Plus. Plus. Plus. Plus.
I hope you enjoyed the video. As part of the campaign, we also ran a major out-of-home campaign on high-profile poster sites and billboards like Piccadilly Circus in London. The branding is now embedded across our product suite, our social media assets, and our corporate marketing materials, and it was covered by a number of major media outlets in key strategic markets. The campaign has so far delivered on all fronts, with brand awareness, brand searches, and share of voice up significantly in the markets where it was launched. It will continue to run this year and the next year. We work with a diversified and dedicated team of marketing partners in our marketing efforts. From major players like Google, Apple, and Facebook, to the sports sponsorship partners I mentioned earlier, to financial media partners like Bloomberg, Yahoo Finance, and many others.
Google is one of our most predominant partners who we work very closely with on our performance marketing strategies and investments. We are one of the biggest spenders in EMEA with Google, and they have a dedicated Plus500 account team within their business. Google supports us on our day-to-day activities and also on unique and long-term strategic projects, such as the global branding campaign we just discussed. Finally, for me today, I want to say a few brief words about our marketing approach to support the business in accessing the major revenues opportunities in the US and Japan. In both markets, we are developing a clear technological strategy and approach, and are fully involved in discussions with potential major marketing partners with a view to replicating our historical marketing successes in other markets.
We will go into more detail on this over time as we develop our positions in these exciting new growth markets. Just to sum up from my side, our marketing approach, which is fundamentally technology-based, will continue to drive our successful customer attraction and retention activities and deliver sustainable returns. Seeing marketing as investment and not as spend is crucial driver to Plus500 success over the years. With a consistent, scalable, multilayered approach supported by our new global advertising campaign, we will continue to support the business as it makes further progress on its strategic growth roadmap. That's it from me. I will now hand back to Rob, who is hosting the next session.
Thank you, Nir. The next session is on technology, and I'm here with our CTO, Al Yaros. Hi, Al.
Hey, Rob.
Let's start with your background career. Can you just give us a bit of an overview of that, please?
Yeah, sure. I started coding back in the nineties when I was a young kid. I found this thing called PC back then fascinating, and I started writing small 2D games and small programs. Twenty years later, I graduated software engineering in Ben-Gurion University , and starting to work as a software engineer as a profession. Since then, I've worked in several U.S. enterprises like McKesson and VMware and HP and in several startups that was later acquired. In 2015, I joined Plus500. It's seven and a half years ago as a backend engineer.
I joined Plus500 when we were only a handful of backend engineers, and I was looking for a place that I can make a significant business impact and actually move the needle, company-wide. I joined Plus500 and worked on predictive models around customer behavior analysis. After two years in this domain, in 2018, I was selected to lead system architecture as a chief architect of Plus500. In this role, I changed the architecture of the system and how we build software and the coding practices. In the beginning of this year, I was selected to lead the R&D as a CTO.
To this role, I'm bringing all the experience that I have from prior to Plus500, and especially in Plus500, to my role as CTO. I think that in order to lead talented software engineers, you need not only to be a leader, but also a technical leader and be there with them into the depths, into the technology that we have. I think this is one of the greatest strengths that I'm bringing with me to this role. Yeah.
Great. Thank you. You mentioned you became CTO earlier this year. Can you talk a little bit about the structure of your team? For the audience who may not know our technology business that well, can you describe the employee profile? What sort of employees work for you?
Yeah. Okay. In R&D, we have around 81 engineers from various disciplines. We have backend engineers and frontend and quality engineers and designers and test automation and DevOps and all kind of engineers, a wide spectrum of engineers that you need to in order to build the software. R&D is structured, we are divided to four groups. The first group is acquisition, which is responsible for acquiring users. The next group is what we call core. It's our core technology around payments and trading and membership and regulation technology. The next group is engagement, customer engagement, which this group is responsible for making the customer more engaged with our application and effectively increasing their lifetime value.
The last group is what we call enablement, which is like our cross-cutting concern group that lays the foundations for all other groups and providing services like notification services and localization and security and data storage and servers and network, all of the reliable components that application teams need in order to develop software efficiently and in a quick time to market, et cetera. This is the four high-level groups in the R&D. Each such group, we have teams, and the teams are cross-functional. It's like a commander teams that contains all the skills that's needed in order to deliver business value. We have multiple teams in each such group. This is in high level how the R&D is built and
Yeah. Great. Thank you. Over the last sort of eight or nine months, what are your sort of key objectives going forward? How are you looking at the future?
The objectives for the R&D is. Okay, I'll start with, the first thing is, deliver business value to make our Plus500 business vision to be a global multi-asset fintech company into a reality and building products in high velocity, meaning low time to market and in parallel and in multiple trajectories. As previously, as Dani and probably Nir and others explained, we are working, for example, on futures which will take us to new markets, and in parallel, we are working on insights that provide a more richer experience to our customers. We're working in parallel on multiple directions. This is the first aspect. This is our key priority to deliver business value.
The next thing is to grow and scale the R&D 'cause when you expand to more markets and you build more products and you need to continuously maintain and fortify what you already built, you need more engineers. We are investing, spending a lot of time on growing the R&D and recruiting more talented engineers and defining a solid process and methodology that can sustain 80 or 800 engineers. We need to be effective and empower teams and empower people. We are working on growing and scaling the R&D and what comes in relation to that. We are also spending a lot of time on keeping the production robust. We own a critical 24/7 production environment.
In order to keep it robust, we need to work on a multi-dimension and on multiple dimensions, as like availability and scalability and accuracy and security. Security is a top priority for us in Plus500. We value the trust that our customers give in our products for many years, and this is a trust that we've built in many years, and we continuously work to maintain it. We also are working on building software which is resilient, because we assume that failures can happen, and we build a resilient mechanism inside our software, so when failure occur, the system can adjust and recover itself quickly, and sometimes before even customers notice. We are using all kind of aspects like anti-fragility and bulkhead.
For example, when one piece fails, it doesn't take down the entire system, and it only affect a certain piece, and it can recover by itself quickly. This is another aspect of the production environment. The next is we are working on our culture and values, and we are aiming to build a high-performing culture. A culture is like an endless inspiration. It's not something that you either have or don't have. It's an endless journey, and we are working on culture and we are aiming to build a place that put forward excellence and constant learning and passion towards business and passion towards technology and a place that people wants to go the extra mile for.
We spend a lot of time on culture, not by putting stickers on the wall and saying what our culture, but mainly in a reinforcement way, by pointing out to what is good for us and what is not good and celebrate wins and promoting people and mainly giving constant feedback to people. I think this eventually builds culture. In one word, the culture that we are building is one that put our engineers and sees our engineers as leaders and partners. We spend time in building effective communication, so data can propagate bottom up and top down effectively, so our engineers can take the right decision and be accountable and act as leaders. We're spending lots of time on culture.
The next aspect is building what we call a software-defined lifecycle to how we build software. Our goal is to be state-of-the-art in this aspect. I think that building software is not a unique challenge for us. Given that, we constantly look to the greatest software companies in the world, like Facebook and Netflix and Google, and we try to learn from them and see what they are doing and what is working and what not in the industry worldwide, and we adjust it to our critical domain. Because for example, in Facebook or Instagram, you can lose a feed or wait one second until feed arrive.
In our critical domain, a user wants to log in and close a position, you don't have this luxury to wait one second or see wrong number or he can't see his position and stuff like those. Yeah. In this perspective, we are trying to stand on the shoulder of the giants and be state-of-the-art in terms of that. Where we really innovate and push the boundaries is in our fintech domain, where our expertise is. We try to find a balance between learning from others great companies and pushing the boundaries in our domain.
That's great. Yeah. Thank you. Let's talk about the technology in detail. How does the technology support the customer on the customer journey?
Okay. Our technology is like following the line of the customer journey, and we have a proprietary software and technology across the B2C funnel or the customer journey. It starts, if you look on the funnel, with the left side with acquisition. The acquisition group, as I said, is responsible for acquiring users from the outside and bringing them into our platform. In the acquisition domain, we have two teams. They are divided into what we call marketing channels, which is affiliation, mobile stores, and the website.
We have a team there that is working on ad technology, which we call our marketing machine, which's role is to optimize or do spend optimization or marketing spend optimization. We have an in-house technology that we've built there, and it is one of our key differentiator in this domain. The next aspect in our system is what we call a membership. A membership responsibility is to take users, customers from the outside and create their digital entity inside our system. Digital entity, in order to build it, you need to be able to authenticate and authorize users and all things that are related to regulation tech and onboarding and documents and stuff like those.
What we call CRM or manage the users inside our systems. This is the next aspect of our technology, which is the membership domain. The next aspect is once users are members in our platform, they need to do payments. They need to withdraw money and/or deposit money and in order to participate in our systems. We have a vast subsystem that is responsible for payments. You can think about each of the verticals that we have. If you look outside, you can see there are companies that are just focusing on that. We have a technology across the stack that we've built in 12 years of expertise.
It is not just a generic technology for payments or for membership or for regulation tech or for acquisition. It's our business expertise, especially in the fintech domain, is embedded inside those products, and they are like tailor-made for our domain. They are not just the generic products. The next aspect after payments is user wants to trade, and we have multiple trading engines, one for OTC, and one for what we call invest. The next one that we are currently building to go into the US market, which is a futures trading engine.
Underneath those trading engines, there is what we call a market data sourcing, is a subsystem that responsible for getting market data like feeds and charts and instruments, and delivering it to our customers and to our mobile platforms. Also risk management subsystem that is responsible to manage the risk for the entire group and the entire system. This is our trading engines and the core parts of our product. The next aspect that we have in our technology is what I call the customer engagement. Inside customer engagement we have services that are responsible for retention and delivering insightful information to customers and what we call insights.
We are also aiming not to just bring accessible experience to users, we are also trying to give them a rich and delightful experience and give them more reasons to open our app. We develop insights. The next aspect is domain, giving customers a better customer service. Everything is automated in this domain. This group is responsible for that as well. Other features like alerts and favorites and all things that their goal is to add value to users alongside other components that are critical for trading. The next aspect of our technology is what I call the enablement group, which is a group that gives all the foundations to the other applicative teams.
In this group we have data architect and security and backend infrastructure and business intelligence, and all the tools that we use to guide our way as a business and to measure and collect data effectively. This is one of our strengths in technology that we constantly measure data, we collect data and measure what users are doing and what works and what don't work. It's like a continuous cycle of measuring and collecting data and improving and making changes. This is a constant cycle, and this enablement group is laying the foundations for that. This is a high level-
Yeah.
Our technology stock.
I suppose the point, the important point that you're making is that everything is interconnected. Every element of the technology is connected. Is that, the situation?
Yeah, yeah. On one end, all of those components are interacting with one another and are connected to one another. They can enjoy the benefits that we have a system that we've built in-house.
Yeah.
All the details and all the tactics inside it are visible to everyone. People can be not just a domain expert in the business, they can be also technological experts. On the other end, all those components are relatively disconnected from each other. What we are aiming to build is what we call the loose coupling, high cohesion. We want the components to be loosely coupled so they can move independently.
Mm.
Every team and every component can be like independent and autonomous and move in its own pace and be optimized in its own base. We try to find balance between loose coupling and high cohesion, yeah.
Okay.
We try to find a balance there.
On that point, you talked a little bit earlier about organizational culture. Let's talk about the methodology. How do you get this great technology? How do you get the best out of it from our people?
We changed our methodology not long ago when we started this journey into becoming a multi-asset global fintech company, and we started to expand to more markets and build more products. We thought that we need to change our methodology to one that is more scalable and we can have 80 or 800 engineers, and it still will be effective and will have a culture that empower people and empower teams and people can work effectively and become master in their domain. What we did is to first change the R&D from a structure of a pool-based skill set. For example, we have a team for backend and team from front end and team for QA, and what we did is to build cross-functional teams.
You can think about it that each team is like a commander team that has all the skill set to deliver business value end to end. In the previous structure, someone would write the back end and someone would build the front end, and someone will do a quality engineer over everything. You get like a multiple local optimums. When we change the structure to a cross-functional teams, the team as a whole has the responsibility to deliver business value to the customer, and it's like a global optimum over what we deliver to customers. This helps us also to grow in scale and recruit more engineers, because when the team is centered around business functionality, you have a shared goals. All the engineers are promoting a specific business goal instead of working across the funnel.
They are dedicated to a certain thing, and they have a purpose and a shared goal. You reduce the cognitive load, 'cause if I'm engineer and I need to work on multiple stuff across the funnel, I need to be familiar with many of the stuff. I'm working on a single team that is working, for example on payments. I become master in payments, I become domain expert in payments, and I also become a master in the technology of payments. This helps us to grow and recruit more engineers. Because the cognitive load is smaller, and the team has purpose, and people become master.
When you look at all those aspects together, you can see that it also builds internal motivation because people have purpose, they become masters in what they do, and they have autonomy, 'cause if someone is working on the entire stack end-to-end, the amount of autonomy he has is little because he needs to work on the entire platform in one shot. When you are working on payments, then the blast radius is smaller, and then he can have more autonomy. It also builds motivation. This is one aspect that we did across our methodologies to change the team structure to a cross-functional one.
Another aspect that we did is to focus the team around domains, which means that our business domains, as we talked about, across the funnel and the teams and the architecture that we are building are all aligned. For this thing, we are leveraging what we call a Conway's Law. You shape the organization that you have. If you have a team of backend and frontend, when you look on the software, you will see backend and frontend. When you're building cross-functional teams centered around domains, this is the architecture that you will get. You will get like distinct components that can live autonomously, and the cognitive load is smaller. Everything is aligned.
Mm.
This is another thing that we've did. The next thing. The third part in the methodology is what we call Agile. The teams are working in short cycles, and they deliver business value every two weeks. This helps us to increase the business velocity and to have a short time to market. Not only short time to market, this helps us to get feedback in a quick manner. We build something, we put it to production, we get feedback, we measure, we calibrate, we change.
Once you have like short cycles, it helps you to build the right products and go to the right direction and to give customers the best experience that is possible and not by assumptions, but actual data. I think this is one of the greatest factors of Plus500, that we truly work based on data. Yeah.
Great. Okay. Thank you. Finally, just talk very briefly about your future priorities, particularly in the U.S. What's happening there?
Yeah. Okay. What we're doing in the US is, we are building a new product. We want to expand to the US market, so we are building a new product. We try to bring our technology and super strengths around marketing and retention and payments and trading engine and all the experience that we acquired over the 12 years that we are working. We have a lot of domain experts in user experience and in trading. We also have a lot of experience in technology that drives those business aspects.
What we're aiming to do is to bring our rich experience in technology and in business to the US market and to do a revolution there, as we did in the rest of the world and to bring a revolution to how users in the US are engaging the trading markets. This is another thing that we are working in the US. As I said, we are not trying to bring just accessible experience, but a rich and delightful experience. It's like being the gold standard when someone wants to take part in the trading markets, which is one of the greatest engines of the world in the last 50 years.
You can see that more and more people want to engage with the markets, and it's becoming like a commodity. If in the past people wanted to engage with the trading markets, they will need to go to the bank, and they didn't have accessible data and accessible way to do it. Now it's accessible, but we are not only looking for to make it accessible, we also want to give them a delightful experience. This is what we are aiming to bring to the U.S. market.
That's great. Let's finish with the key messages that you want the audience to take away from this session.
As an engineering group, we bring with us 12 years of domain expertise, both in the business and both in the technology that powers it. We also have a scalable, highly scalable system that can accommodate a large traffic of concurrent users and large volumes of trading activity. Underneath it, there is our methodology, which is state-of-the-art and in line with the greatest software companies in the world. Also underneath all of this is our people and our culture and our high-performing culture of excellence and passion towards technology and passion towards business. I think those four are our super strengths as R&D, and we are looking forward to our future and expanding into more markets and building more products.
Great. Thank you. On that note, let's leave it there. Thank you very much for your time. Let's move on to the next session now with Alon, our COO.
Thank you, Rob, and hello, everybody. I'm Alon Cohen Naznin, Plus500's Chief Operating Officer, and I will talk to you today about how our operational team is structured and managed and how we empower the support of the growth of our business going forward. I've been with the company for over six years and run the operations teams of more than 220 people, the majority of which are based in Sofia, Bulgaria. I'm also the CEO of the operational entity in Bulgaria. Let me start by stating our mission for my team and outlining our key priorities.
Our operational system and processes are powered by our proprietary technology, including our customers' onboarding and payments processing, have been fully developed in-house. This sets us apart from the competitors, many of whom try to aggregate a range of processes and systems from different individual suppliers who are not always directly connected. Our integration-based interconnect approach ensure our customer have seamless experience across all elements of their journey. Our mission is to create environment for the execution of the group's strategy by providing operational capacity for resources, internal efficiency, and customer-centric approach. This based on an Agile operational model which enable us to scale up at speed, a large pool of highly skilled, experienced, and committed operational employees, and high-performance culture, which is focused on tangible deliveries and outputs.
These factors ensure that as an operational team, we are consistently delivering best-in-class customer engagement, experience, and support, efficient internal processes tools, particularly to support our operating team around the world in achieving a consistent global product and service for customers. In addition, our KPI-focused culture, which is based on a clear and tangible deliveries and outcomes, help us to support the business as it grows in the new markets and introduce new products. Fundamentally, the success of our operations teams is based on our focus on people, systems, and processes. Starting with our people. Our lean organizational structure ensures that our team is completely focused on constantly driving efficiency, which is fundamental in operations management. Across the team, we share and develop knowledge, collaborating between subteams, and thereby always improving the way we work.
This helps us to optimize our processes and functions and ensure we are able to scale up quickly to support the platform when they need to cater for higher volume at short notice. Across our employee base, we have common performance metrics and a set of KPIs supported by specialist training programs, so that everyone knows the roadmap and is collaborating for the same cause. Ultimately, our culture helps us to attract, retain, and drive the quality of our employees, which ensures that our customers are always receiving a best-in-class experience. Turning to our systems and processes. Our goal here is to create a consistent operational platform from which our global business can manage its day-to-day activities and deliver growth. We have common KPI metrics with unified performance criteria, which is focused on customer-centric metrics.
This is reviewed and updated on a regular basis, with continuous feedback and input from across various subteams. We have developed an internal knowledge hub to support our global subsidiaries with all of the relevant appropriate information they require housed in one place. This is constantly updated with the latest regulatory and compliance information, and it's used as a guidebook for daily usage by many internal teams. Looking ahead, we are creating a foundation for new subsidiaries that have been set up over the last year or so, including the U.S., Japan, and Estonia, supporting them with a twin-track approach of a general global knowledge and market-specific information. We are also implementing systematized training models on a number of areas going forward. I'll now go into more details on what we actually do on a day-to-day basis for our customers as an operational team.
We split this into 4 areas, customer verification, customer onboarding, customer support, and payments processing. We have around 50 people working on the verification and onboarding, which is also including KYC processes and anti-money laundering. This team is responsible for the daily conversion of the clients while being fully compliant with a range of specific regulation in each of our markets. As a part of comprehensive verification process, this team assess the potential customers before and during the completion of an onboarding process. With a handling of time of around 3.5 minutes per customers on average, we are able to process over 1 million documents every year. In addition, we have a capability and agility to scale up our capacity by up to 20 times more at a short notice. This was well demonstrated during the peak volumes we managed during the course of 2020.
To help drive our efficiency, in particular around document submission, we work with a range of verification partners, including Experian and GBG. Our customer support team maintain a consistent focus on a cutting-edge localized customer care on a 24/7 basis. This is delivered through email, live chat, and WhatsApp by our employees in multiple languages. We were actually the first player in our industry to integrate WhatsApp into the 24/7 customer service proposition. We handle over one million customer queries per annum, and we have maintained a high average customer satisfaction score. There are dedicated teams for trading, payments, and premium service that Nir discussed, and account managers. Each team is directly connected to each other to ensure all customers' queries are dealt with quickly. We also have an educational team which trains our internal teams on matters of customer service.
Our payment processing capability, which is designed for local market requirement, is fully automated on our platform with around 20 different payment methods currently supported. This includes in-built AML and anti-fraud detection capabilities. We have built-in redundancy in this area with a range of payment processors available in each market. As this capability has been developed through our own technology, we have the ability to make ad hoc late notice changes in payment processing when there are any changes to regulatory requirements or business needs. Turning now to the U.S. and our operational integration of the acquired business there, which has been a major focus for us over the last year. We supported the local team in sourcing and recruiting operational executives with expertise in compliance, sales, finance, risk, and clearing. We continue to be actively involved in the day-to-day operations of the U.S. business as we develop and grow.
Furthermore, with our proprietary technology, we are managing the various operational aspects of a new retail-focused offering, including all of the elements I have discussed more generally before. We are also working on operational aspects of the future development of our product offering in the U.S. We are involved with developing the business back office and I.T. platforms, including the launch of client portal and integration of a cashier to allow instant funding and additional payment methods. We are also helping to integrate the U.S. business within the group's I.T. infrastructure, as well as implementing our global risk management framework and system in the U.S. We provided operational capability to help the business to complete the full CME clearing membership, as well as supporting the business in delivering a significant capital injection from the Plus500 group earlier this year.
Turning specifically to how we have supported the business with the institutional opportunity that was discussed earlier, there are three broad areas here. Firstly, we provide a seamless, instant, 24/7 front office and risk management capability. This execution desk has access to every major global exchange, as well as the most sophisticated information management system. In the back office, we have delivered a cutting-edge back office and risk management support designed to specific customer requirement. This includes rapid account opening, customized reports, real-time reconciliation, and portal for the post-trading clearing, all of which is seamlessly integrated with the various exchanges. Finally, there is a clearing element itself, where we provide a customizable solution through the leading exchanges. The U.S. is a major operational focus for us, and we believe our institutional offering, enabled by our operational and technological expertise, is a significant opportunity for the future.
Just to sum up from my side, as a team, we remain fully focused on operational efficiency with emphasis on people, systems, and processes. With our agility and scalability, supported by our diversified network of providers and suppliers, we remain extremely well-positioned to deliver for our customers and to support the future strategic roadmap of Plus500. That's it for me. I will now hand back to David, who will make some concluding comments.
Thanks, Alon, and hello again, everyone. Just to conclude the presentation today before we go into Q&A. As you have heard today, we believe that Plus500 is extremely well-placed to deliver future growth and value for our shareholders. Our consistently strong historic performance is due to the capability of our proprietary technology, which will continue to drive our operational excellence, our market-leading product offering, and our cutting-edge marketing approach in the future. We have a very robust financial foundation, supported by consistently high levels of cash generation, which enables us to invest in our future growth opportunities, both through organic investment and targeted acquisitions. Growth will be delivered by increasing our presence and position in existing markets, entering new markets, and launching new products.
We are particularly excited about the retail and institutional opportunity in the US futures sector, which once fully activated, will have a significant positive impact on our business. Finally, I would like to thank you all for listening to us today, and I would also like to thank our management team for their hard work and contribution to this event. I will now hand over to Rob, who will host the Q&A session. Thank you.
Thank you, David. Hi, everyone. Welcome to the Q&A session. We've got the team here, and we're joined by Yevgeni Shtuckmeyster, our Chief Regulation Officer as well. Let's start with a question for you, David. On the U.S. Futures business, what's the more substantial opportunity, the institutional or the retail opportunity?
Yeah. Thank you, Rob. As I mentioned during the presentation, there are three opportunities here, all three of them are huge. First one is the institutional opportunity. Basically, we are bringing a better technology, and better service to the industry, which we sometimes find a bit old school, and we believe that we can lead this segment over time, and basically the opportunity is very large. The second opportunity is within the retail segment. Basically we just released the TradeSniper application just recently. We are still in the process of introducing this to the market, and we will start marketing this stronger very soon.
Soon we will also release an additional application dedicated for retail customers. Basically we bring our know-how and our technology and our intuitive approach to the market. We believe that we just bring a better trading application out there to the masses, and we believe that the opportunity is huge. There is a third opportunity here, which I didn't expand about during the presentation, which is the semi-professional. More, as we call the traditional market, we've brought many tools. With our know-how, we improved significantly that operation in Cunningham Commodities, which we acquired, and we believe that we will increase this segment as well.
We have lots to bring to the table here and to contribute to these customers. We believe that this opportunity is huge as well.
Great. Thank you. Next question is for you, Dani, actually. You touched on risk management in your session. Can you give a little bit more detail on our approach in that area?
Of course. Thank you, Rob. Our risk management system is based on three lines of defense. The first one and the one that I'm focused most on is the trading risk. The trading risk is actually divided to three sub-lines of defense, or let's call them three layers. The first layer is online alerting, and that is based on proprietary technology that I've spoke about earlier in my presentation. That alerting technology incorporates various market online conditions and sends alerts that we need to act upon when we need to act upon them. The second layer of defense is thresholds and limits that we maintain and monitor on various levels. The first one is on a position level, on an instrument level, and on a customer level.
We monitor those thresholds all the time, and as soon as our volumes are starting to get near those thresholds, we act upon it. This happen very rarely, but we can definitely work on that. Now, these two layers have proven to be very robust over the past 12 years and proved themselves very efficient, even under severe and volatile market conditions. But on top of that, we're adding a third layer, which is targeted hedging that we've been exploring during the past two years. The other two lines of defense are a very strong compliance unit that works across all of our subsidiaries and an independent internal audit that I'm actually thinking that my colleague here, Yevgeni, the Chief Regulation Officer, can elaborate more on.
Oh, that's perfect actually, 'cause we've had a question about the regulatory side of things. Yevgeni, would you mind just talking through the regulatory setup and how it's managed from your perspective?
Of course, Rob. We have established global regulatory network managed by our regulated subsidiaries and supported by top-notch regulatory advisors. Our personnel, compliance personnel are highly skilled team with very vast knowledge and experience within the regulatory standards. They're maintaining a program of training across the group from top to bottom. Our technology actually provide us all the flexibility to implement all the regulatory demands, and it's very flexible, and it's very convenient for us to work with it and to implement any possible changes that might occur. I think that all of these factors put us in a position that we can respond very easily to any potential changes that may occur.
We are welcoming any regulatory measures that can be introduced by the regulators, and we're supporting it to robustify the protection of the clients. Actually, we have implemented many of these measures in advance in our systems.
Great. Thanks, Yevgeni. Next question is for you, Elad. On the $500 million revenue objective, can you give a sense of phasing from what revenue base and the margin profile of that objective?
Sure. Thanks, Rob. Obviously we are quite excited to bring today for the first time a short to mid-term, kind of a reference point from the company's point of view, something that we haven't done until today. That incremental $500 million is being referred as we described earlier today by two main layers. The first one is being dependent on new markets and new products, mainly being derived, as David mentioned earlier, by the US product. The second one is very much associated with the OTC product as we intend to go into new markets and also to expand and deepen the customer relations.
At the end of the day, we are looking at an incremental revenue to start and be initiated from 2024 - 2027, with a greater level of portion to be associated with 2026 and 2027. Having said so, we do have the comfort and the ability to say that we are always ahead of the expectations. We're here as management to deliver stronger results, and we will very much share with the market better kind of expectations as time goes by. As for the margins, we're yet kind of to assess the specific margin applicable to those $500 million. Once we will have better visibility, we will very much share it with the market.
Great. Thank you. Onto the marketing side, a couple of questions for you, Nir. Firstly, what is the key differentiator for us in terms of our marketing strategy and approach versus our peers?
I think there are two main things. One would be our technology. I talked about it earlier in the presentation, but I think the fact that we started collecting data almost from day one, and in the days that no one was talking about big data and AI and data science. This is what we do. This is how the marketing machine is built on, and I think it definitely one of our strategic advantages. The second one is the people. We're having not just marketeers, but engineers who focus on data, on ROI. They are not in love with their ideas or their creatives. They see what works and deliver upon it. Strong team with this technology, that's what makes the difference.
Great. Thank you. On the Kiefer Sutherland campaign, can you just talk about the learnings from that, and do we plan something similar in the US?
We definitely learned a lot. We went out of our comfort zone to do something a bit different from what we usually do, not just in digital, but also in other channels, in TV and out of home. This is something that we are building our learnings about measurement, about how to implement it right. We do it with the right people. We do it with the right partners. We definitely see that it works in the right KPI that we are looking for, which is, in this case, are not the usual ones of just direct acquisition. Regarding the U.S., we're starting our plans of building the brand, and you'll soon see some nice moves there, so stay tuned.
Great. Thank you. Some questions on Japan. David, can you talk about when you think we expect to generate revenue from Japan?
Yeah. Obviously, we just acquired the completed acquisition of the Japanese entity recently. It's a bit too soon for us. It will take us time to establish the business. We started to do it very efficiently. There are cultural differences that it will take us time to overcome the gaps. We are amending basically everything, building. It's worth to say that it's very important for us to do things carefully, step by step, not to do mistakes there, so it will take time. As to the question, I think that as we are planned to release the product step by step, we are expected to release the first pro-product during H1 2023, and then during H2 2023 to release additional products.
We will see some revenue during 2023, which is expected to grow during 2024 and going forward.
Okay. Thank you. We also had a question for you, Alon, actually, on the operational side. Can you talk a little bit about the establishment of our operational presence in Japan and what the plans are?
Yeah, it's a good question. David mentioned that we acquired the company, but we acquired the company with a license and a great team that we have there. In the last few months, we already hired a few executives to join the team, and we are very happy with what we have now because we are getting a new level, a new standard of proficiency in the market. We are working around the clock to understand exactly the needs and what should be done there. I can say that the R&D and the product team are working around the clock in order to localize the platform and the website and all of this and learning every day. The marketing team working on the branding, they are in the process of understanding it and engaging the right partners to do so.
The operations team, the different managers in the operations are working also with the teams in Japan to establish these services in order to be ready for the going live and to generate revenue, as David mentioned. I must say, looking at the situation now, it looks very promising.
Great. Thank you. Another couple of questions for you, Dani. Firstly, on the slide that you talked about the automated processes and generating a quote, how long does that whole process take?
Well, it happens in real time, really. So, the answer is close to zero. This magnificent process that I described happens in real time for more than 3,000 different instruments across our different product types, and it all happens in real time. So the answer is close to zero. Great.
Thank you. Follow up on another area for you. When does +Insights launch?
That's another wonderful question. Plus500 +Insights, the first phase is already ready. We're expecting to launch it early November. We're already deploying it to a selected group of customers to collect feedback, and I'm very thrilled to share that so far the feedback has been overwhelmingly positive.
Great. Thank you. We've had a question about scalability. The question is, how should we think about scalability from both a platform and a company culture perspective? I think, David, if you can answer that one.
Yeah. Plus500 was started in 2018 as a startup. We grew over time. We grew rapidly. We became more mature. I think that over the years, year by year, we are implementing better processes. We are empowering the people. We are doing organizational changes year by year. We are recruiting new personnel that is required. The scalability is not only with the level of or amount of customers who are trading, it's also about the products. We are releasing new product. We're working on new product. We are doing acquisitions. We are doing many business initiatives that requires more personnel and requires changes. We are doing whatever necessary to amend this. We are more mature.
We understand that changes should be done. That said, we are trying to maintain the culture that's working for us and not to become that large corporate with lots of bureaucracy. I think that regarding the technology, I believe that Al Yaros, our CTO, will be able to answer better than myself.
Sure. In terms of technology and in the perspective of R&D, in terms of scalability, we are working on multiple dimensions. The first one is the process and methodology that we've changed in order to be able to accommodate growth in terms of engineers, so engineers can work effectively and be onboard effectively. Second thing, in terms of people, when we onboard engineers and grow the existing ones, we provide them what we call a max autonomy and maximum alignment. People have as much as possible autonomy so they can fulfill themselves and reach to their maximum potential and innovate and push the boundaries.
Also a maximum alignment, so everyone knows what is the goal and what is the purpose and what is the vision. Once you have maximum autonomy and maximum alignment, things are working effectively, and you can accommodate more and more engineers and build more products and fortify existing products. This is in terms of people. The last thing in terms of technology and the system, we are changing the, we can, we're changing the arc-arc-the architecture, and, we continuously evolving the technology and the code base, to be more and more advanced and aligned with the world leading companies, software companies in the world, and, push the boundaries and, make our technology, on the bleeding edge.
We are continuously working on the code base and the technology and the system, and changing it in order to be able to accommodate more trading volumes and more concurrent users, and also adapt to the latest and best practices in the software industry. Those are the four dimensions that we are working on.
Great. Thank you. We've got a question on M&A. I think this is for you, Elad. Can you give us a sense of the size of deals that we're looking at? For larger deals, would we take on debt?
Sure. As you know, over the last couple of years, we've done a couple of transactions, both in the U.S. to enter the U.S. futures markets, and also in Japan earlier this year. Those two were very much associated with the Bolton acquisitions, a few tens of millions of dollars. Our view is to bring real assets, if it's kind of the license to enable us kind of to penetrate a new market or, for example, to bring across a new technology. We are looking also on bigger kind of transactions. I won't say that we're looking on the hundreds of millions of dollars transaction, but something that is a bit more kind of with a higher amount is applicable for us. We don't intend to have any debt at the current stage.
Just to remind us all, Plus500 has a very strong balance sheet. At the end of the first half of 2022, we had approximately $1 billion as our own cash. Very much we can also go and maintain the operation as a whole, and as we referred also to the market with the capital requirements that we need, alongside with the ability to extend our footprint and conduct additional acquisitions, also with the bigger amounts of a few hundred million dollars. Yet again, we don't intend to leverage our balance sheet by any additional debt.
Okay. Thank you. A sort of related question for you actually on shareholder returns. Can you just remind the audience of our shareholder returns policy and, in particular, the rationale for the buyback versus dividend balance?
Just to remind us, as we described also on the back of the first half of 2022, when we a bit tweaked the shareholder policy. We do have two times, like twice a year, we're having the ability to distribute to our shareholders the returns, if it's from dividends or through buybacks. Very much, we as management, as the board of directors and also the management here, believe in the company and the foundations to generate and be generated over the years. The current valuation of the company is obviously much lower than what we expect it to be, and therefore, we conduct more buybacks than dividends at the current stage, and also for the future as we see it.
We also collected messaging and comments from our major shareholders, and accordingly, we also adapted and tweaked the shareholder returns. We do have those two events like twice a year, dividends and buyback with a greater portion of more than 50% to be associated with the buyback. We also tweaked it a bit more with the ability to have a special kind of distribution also on an interim level rather than only at the end of the year.
Great. Thank you. Back to the U.S. again. This is for you, David. On the institutional opportunity, can you talk about the industry structure in this area that has enabled us to sort of attack this market? What sets us apart in that market as a result?
Yeah. I think that as mentioned earlier, we believe that the existing market is a bit old school one. We bring a better technology, a better know-how and this is our benefit there.
Okay. Thank you. The question has just come in about the interest rate environment. I think this is back to you, Elad. Do we benefit as a business from the interest rate environment when interest rates are at a certain level?
It's a good question. Obviously, when the interest rates were quite low, we didn't generate much of revenues to be associated, but I believe also within the first half of 2022, we were in a great position already to see the revenues to come from the interest level through fixed deposits mainly. Yes, Plus500, as I referred before, is having the approximate $1 billion as its own kind of cash balance, and very much we are generating additional level of interest on that amount. Having said so, not just with that kind of reference point, but also with the US market to come.
We're very much looking forward to bringing together the institutional kind of client money and to be able to generate also as part of that revenue recognition, additional interest level. As we're all familiar, the interest levels are going up, and we do forecast a few tens of millions of dollars to be associated by that stream.
Okay. I think this is maybe the final question actually before we run out of time. It's on the blockchain and the crypto opportunity, which you touched on. Could you elaborate a little bit more? Are there any particular areas you're looking at from that perspective?
The blockchain kind of environment is very much progressing, but more specifically, I would say in Europe and part of the areas in the US. Plus was always in the position to appreciate technology, but also it should be followed by real regulation. There is a regulatory environment which is progressing in Europe at the moment, and we'll see kind of the implementation in 2024. We do believe that Plus may enter the blockchain kind of spectrum in the short term. Something that we are looking at. But of course, for every pro, there is a potential also con. We're assessing always all the risk associated with each transaction that we may execute.
Great. Thank you very much. I think we're running out of time. If David, if you wanted to give some sort of concluding comments, and we can wrap up.
Yes. Thank you. I think that, two and a half years ago, we have taken a strategic decision to change the company vision from being a CFD OTC provider to become a multi-asset fintech group. During these two and a half years, we completely changed. We replaced, changed the management. The board was changed. Professor Jacob Frenkel joined us as chairman and others. We improved the ESG perspective of the company. Basically we started to conduct acquisitions. We did the first reacquisition. We released new product, the share dealing. We're working on the futures, which we released one, but we will release the additional platform. We are working on sub-products on the retention and many other initiatives. It's a completely new and more focused company.
We have a clear vision. The guys here that you see around me are great management team. Also, the rest of the team. I think that we have an amazing DNA, people which are dedicated and are fully committed to fulfill this vision. I'm completely positive, and I allow myself to speak on behalf of all of us, that we are completely positive that we will deliver a return to our shareholders in the future and will improve the company valuation as well. Thank you, everyone.
Great. Thanks, David. Thanks everyone for listening. Hope you enjoyed it and found it useful. We'll aim to follow up with the questions that we weren't able to answer today. Thanks again. Appreciate it.