Timur Turlov discusses Cyprus operations: Freedom24’s key to European market

By Kyriacos Nicolaou

The Cyprus Mail recently had the opportunity to sit down for a one-on-one interview with Timur Turlov, the 36-year-old CEO of Freedom Holding Corp., to discuss the company’s growth trajectory and strategic priorities, particularly in relation to Freedom24, the company’s European division, which is headquartered in Cyprus.

The interview took place in April, in the context of the LD Micro conference, a platform for small and micro-cap companies to engage with investors. Notably, Freedom Holding Corp. transitioned from being a participant at the LD Micro conference some years ago to acquiring the platform in 2023 as part of its US business expansion.

“In Cyprus, which is the base for our European business, we have a large team, one of the biggest in Europe, with more than 300 people working in our Limassol office,” Turlov told me, noting that “most of our talented employees are based in Cyprus”.

“Our next steps involve obtaining banking licences. Perhaps next year we will start the process,” yet as he explained, this is neither a straightforward nor a swift one. “The approval process takes a lot of time and requires careful, systematic communication, especially with the European Central Bank (ECB),” he says.

He stressed that “it is a long compliance journey to answer all these questions and meet all of the requirements, so it can take years just to complete the application process”.

However, he remains undeterred by the potential obstacles mentioned above, underscoring the company’s determination to forge ahead with the implementation of its vision.

“But finally, I believe that for us, it’s one of the most logical steps to start banking operations in Cyprus because we already have everything in place: a team, a location that has provided this team with the right business environment,” he stated.

“Our team has been in Cyprus for almost 10 years now, and many of our team members have become naturalised citizens,” he added.

Earlier during the same week in which our interview took place, Turlov was part of a fireside chat at 40 Wall Street, a historic building in Manhattan’s Financial District, where he talked about a range of topics, including the company’s proprietary platform.

Back in our own chat, I asked Turlov about the platform and the work behind it. He told me that his company already boasts a cutting-edge internet platform, Freedom24, excelling across European markets.

It offers seamless access to global equities, including stocks, ETFs, stock options, bonds and more.

With access to a total of 15 key exchanges like NYSE, NASDAQ, LSE, EURONEXT, and ATHEX, plus others like the Kazakh and Hong Kong exchanges, it stands out among other European competitors.

“We see this as a unique piece of technology in which we have invested for 10 years. We have a strong team located in Cyprus working on this advanced technological fintech product, which we believe will be competitive in the United States,” Turlov stated.

“We think there are fewer than ten companies in Europe that actually have their own proprietary platform, which allows them to be connected to exchanges in both the United States, Europe and Asia,” he added.

Crucially, the company is able to leverage this platform in two distinct ways. One, by offering the services it facilitates to clients directly, and two, by selling white label services to other companies who wish to use the technology as a foundation for their own operations.

“We already have some partners who are using our application as a white label to serve their customers,” Turlov said, emphasising again that “we see that we have a quite unique position because very few companies actually have their own platform”.

“Even most brokers who provide access, especially to the stock market, usually seek solutions from other companies, or try to be connected to other brokers and use their software,” he stated.

“Software is usually the most expensive part of the process of launching such a solution, requiring tens of millions to support and develop to comply with regulatory requirements, which are also constantly changing and becoming tighter. So, yes, we do that, and we are happy to serve such customers in Europe, Caucasus, and Asia with our own solution,” he added.

Another thing that Timur Turlov mentioned is the company’s lower cost base in terms of developing some of its solutions and services, since their core base is in Kazakhstan, where the cost of living, and therefore the average salary, is lower than most EU countries.

“But in Kazakhstan, in particular, you will still need to invest some effort to better understand the country’s language and culture. Yet I think Kazakhstan is a great country. It’s quite unique in the region, with great business opportunities that we can fully utilise,” he explained.

Moreover, he said that the company enjoys a constructive relationship with the government there, allowing them to experiment with and try many technologies, which they later envision being implemented in other markets.

“Kazakhstan can be a great laboratory to find examples of how we can benefit from big data, how we can consolidate various databases and data processing into one place, and how we can benefit from analysing this data,” he added.

Staying on the topic of Kazakhstan, where the company has been able to leverage big data to create cutting-edge solutions, including insurance services and banking, among others, I asked if this could be replicated in Cyprus.

“I think Cyprus is very well-positioned and will be one of the first countries in the European Union to adopt new financial regulations. Now, because the country itself is smaller, it’s easier to find solutions and have a constructive conversation with the government, rather than if you’re dealing with big countries which have more complex decision-making processes,” Turlov explained.

“I hope we will achieve this faster in Cyprus than in other European countries. Hopefully, it will also help if we showcase some examples of how we solved certain problems in Kazakhstan, how we benefited by implementing certain services, and how we have managed our risks in terms of cybersecurity and data protection,” he added.

In terms of any concerns as to the use of such data, which may relate to anything from property ownership to vehicle registration, among many other things, he underlined that “we need to assure ourselves about the use of this data and processing it with AI models, which can even increase the level of data protection and confidentiality, as nobody in the bank manually touches this data [in Kazakhstan]; it’s only processed algorithmically”.

“This is something that needs to be considered because otherwise, someone who has physical access to this data could use it in their own interests,” he added, hinting at the risks associated with manual control. “Algorithms help maintain advanced confidentiality,” Turlov emphasised.

As it is well-established, the company has operations in numerous countries, across Asia, Europe, and the United States. I asked Turlov if the success of Freedom Holding Corp. in one jurisdiction has benefits to the company as a whole, subsequently benefiting its operations elsewhere in the world.

He told me that the company strategically identifies synergies within its infrastructure, linking markets and people. Success in one market informs strategies in others, with a focus on diverse development stages and tailored solutions across regions.

“This is all part of our wider business strategy. We understand that success in one market can help in another, while failure in one can teach valuable lessons,” he said.

“However,” he continued, “we see that different markets are at different stages of development”.

For example, he said that in the United States, the company has a relatively small team focused on the institutional part of the market, facilitating order flow from around the world to the US.

Conversely, in Europe, the company has a retail brokerage business servicing 250,000 people and a software development team, both based in Cyprus.

“We’re already helping many European customers access the US markets, and we may eventually bring European companies to the US to help them raise capital here,” Turlov said.

“This represents a huge potential for European companies to tap into one of the world’s largest markets,” he added.

Responding to a question on a mooted, and some say overly delayed, interest rate cut, Turlov said that a reduction of interest rates is always positive for the stock market and trading, as well as being good for commercial banking, but less positive for external markets.

He also noted that low interest rates mean “you have to work harder to make money”.

“We have spent about 10 years developing our services, and the main growth of our company happened during an era of very low interest rates. Now, the wind is changing, but we still benefited, even in times of high interest rates. We were very adaptive, changing our approach and making profits from insurance, life insurance, banking products, and investments in high-yield government bonds over this period of time,” he said.

“So, I believe we will definitely be able to adapt to the new landscape and benefit from lower interest rates if that happens,” he added.

Finally, when asked about the core message that he wishes to convey to our readers, Turlov focused on how the company enjoys a unique position in terms of its relationship with customers, noting that there is a lot of unlocked potential for further growth.

“Our system’s potential is definitely going to be unlocked very soon, and we will gain unique insights and experience in regard to implementing best practices in machine learning and analysing data,” he said.

“We have built quite a unique ecosystem for our customers, which potentially could be replicated in other international markets. We have so many diamonds in our production at this moment, so many great business lines with great potential. We are acting as a gateway for Central Asia, as well as to European and US markets, which also creates a unique position as there’s no competition from this market,” Turlov added.

“Yes, we can become a new hub to connect all of these markets. There’s a gap to be filled there. And that can definitely create huge wealth for our customers,” he concluded.

About Freedom Holding Corp.

Founded in 2008, Freedom Holding Corp. (NASDAQ: FRHC) is a global financial conglomerate providing services in retail financial securities brokerage and trading, investment research, investment banking and underwriting services, insurance, consumer banking, telecom, and e-commerce. It operates across the United States, the European Union and Central Asia.

About Freedom24

Founded in 2013, Freedom24 is an investment platform providing access to global stock exchanges in the US, Europe, and Asia. Combined, it offers more than 1 million trading instruments, including stocks, ETFs, bonds, stock options, futures, and savings plans, to more than 250,000 clients across the EU. Freedom24 is headquartered in Limassol, with representative offices in Athens, Berlin, Vienna, Milan, Warsaw, Madrid, Paris, Amsterdam, Brussels, and Sofia. (Cyprus Mail)