Microsoft looks to generate $5 billion in revenue from LSEG and the financial services sector through 10-year strategic partnership.
Today, we announced a 10-year strategic partnership with the London Stock Exchange Group (LSEG), a world-leading financial markets infrastructure and data provider. Following LSEG’s acquisition of Refinitiv, a market leader in data services, LSEG has differentiated itself in the market with an end-to-end proposition across trading, execution, data and analytics solutions. Together we look forward to empowering the future of financial markets by delivering next generation data, analytics and workspace solutions that transform how firms connect, research, analyze, collaborate and transact across the entire financial markets value chain.
Organizations across the capital markets value chain are facing an increasingly complex operating environment with macroeconomic headwinds, stricter regulatory controls and traditional revenue sources becoming more challenging. These conditions are putting greater pressure on firms to reinvent business models and do more with less. However, their legacy platforms, siloed information, limits on scale and data overload hinder their ability to deliver the best client experience, insights and tools. This requires a digital transformation approach underpinned by modern cloud and AI technology. LSEG has already started to address these issues for their customers, and through this strategic partnership, we will accelerate that transformation.
Additionally, capital markets run on data and by investing in the co-creation of new solutions, we will capitalize on the incremental opportunity we have together and support clients in their transformation.
“This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business and will transform the experience for our customers,” said David Schwimmer, CEO of London Stock Exchange Group.
Democratizing financial markets data
Foundational to the partnership will be the digital transformation of LSEG’s technology infrastructure and data and analytics platforms onto the Microsoft Cloud. This will include Refinitiv platforms that power over 40,000 financial institutions in 190 countries with data, analytics and insights across millions of active time series databases, daily evaluations, exchange trades and derivatives, equity quotes and significant research on public and private companies.
With this foundation, we will co-create an open, centralized, financial data platform enabling seamless data democratization, collaboration and new monetization opportunities across the financial services ecosystem. This will unlock new offerings for customers to generate more sophisticated and timely insights.
Delivering next-generation workspace experiences
The financial markets community spends a large part of their day working across multiple terminals and platforms, disparate data sets and siloed analytical tools with limited collaboration capabilities. To enhance productivity and time to value, we will work together to co-create an open all-in-one data, analytics, workflow and collaboration solution that will reimagine client experiences for the first time.
This will be realized through the next generation of LSEG Workspace on Microsoft Teams platform that will support in-application rich experiences for understanding trends and analyzing risk and building scenarios while meeting strict security, privacy and compliance requirements.
Additionally, with enhanced Excel integration, customers will be able to create financial models, run data analytics and visualizations using LSEG content delivered in Excel and work seamlessly between LSEG Workspace and Microsoft 365.
The initial focus will be on delivering interoperability between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications and a new version of LSEG’s Workspace, accessed entirely within the Microsoft 365 suite, to be added in the future.
Creating intelligent analytic solutions
Today, firms can experience duplicated costs and complexity in harnessing the full power of analytics to unlock models that garner intelligent insights for business decision making. To address this need, we will work together to co-create next generation analytics and modeling solutions which are cloud-based and will enable powerful model construction, validation, diagnostics and deployment using Microsoft Azure AI, Synapse, Power BI, Excel and Teams with LSEG’s advanced analytics and modeling capabilities.
It will empower investment bankers, traders, wealth and asset managers, as well as risk, compliance, strategy and advisory managers to run hyperscale analytics models against data efficiently and seamlessly. Built on top of Azure Synapse, Azure Machine Learning and Microsoft Purview, the new cloud-based analytics and modeling solutions will enable users to expose, share and collaborate across proprietary and third-party data securely and confidently, meeting stringent data privacy, security and compliance requirements, eliminating the need to move or copy the data to another location (which can be expensive, time-consuming and introduce security and compliance concerns).
Additionally, quantitative analysts, data scientists and engineers will be able to build custom models to drive their analysis and decision making seamlessly. Both can help organizations spend less time, money and effort building and maintaining their own infrastructure.
“Bringing together our leading data sets, analytics and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies” said David Schwimmer, CEO of London Stock Exchange Group.
Additionally, we will explore the development of digital market infrastructure based on cloud technology, with a goal to transform how market participants interact with capital markets across a broad range of asset classes.
This partnership represents a significant milestone for the future of financial markets and builds on Microsoft’s investments across capital markets and more broadly across the financial services industry. Microsoft estimates this partnership, and broader market opportunity, could generate an additional $5 billion in revenue for the company over the next 10 years, including the $2.8 billion minimum spend commitments from LSEG for cloud services and support.
Microsoft will also purchase an approximately 4% equity stake in LSEG through the acquisition of shares from the Blackstone/Thomson Reuters Consortium.
“We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyze and trade securities around the world, and create substantial value over time. We look forward to delivering on that potential,” said David Schwimmer, CEO of London Stock Exchange Group.
To learn more about our partnership, please see the press release. For broadcast-quality footage, please contact [email protected]. To learn more about our work in this space, please visit our capital markets site.