Symphony, an instant messaging service for the finance industry, was launched in 2014 by an intimidating lineup of banks and financial institutions. Led by Goldman Sachs, which supplied the underlying technology, the group included others investors like BlackRock, JP Morgan, Citi, and Morgan Stanley.
Symphony’s backers aren’t just looking for a return on a promising startup. They’re hoping Symphony will break the vise-grip Bloomberg has on the financial industry, creating a viable—and cheaper—alternative to the provider of data, news, and messaging that dominates trading floors around the world.
That hasn’t happened yet, mostly because Symphony is still primarily a messaging service connecting financial firms, and Bloomberg users saw no need to sign up for a service they were already getting. But that could be changing. Symphony today announced a partnership to bring Thomson Reuters’ news, data, and analytics, via its Eikon platform, to Symphony’s service. Symphony users will, in theory at least, now have access to everything Bloomberg users get. “You bring those two assets together and you make it very possible to have an alternative,” said Symphony CEO David Gurlé.
Bloomberg was founded by Michael Bloomberg in 1981 initially to provide bond-pricing information but quickly grew in part because its messaging service became indispensable on pre-Internet Wall Street. Today it has more than 320,000 users, news bureaus in almost every country with a central bank, and a small army of reporters and editors producing reams of news. (Disclosure: For almost 10 years, I was one of those reporters).
Along with news and messaging, Bloomberg users get data about virtually every way an investors can make money—stocks, bonds, currencies, commodities, derivatives, real estate, and more—and analyze it all through thousands of tools. With a few key strokes, a Bloomberg user can chart a company’s earnings, find the age of a CEO, or map the location of all the world’s oil tankers at sea.
Bloomberg’s size and ubiquity gives it pricing power, and its users have long chafed at its cost: $20,000 a year per license. Symphony costs just $15 a month, and Thomson Reuters’ Eikon service—which aims to compete with Bloomberg’s data—costs $300 to $1,800 a month, depending on what a user needs. (To take advantage of the new partnership, Symphony users will need to subscribe to both.)
Investment banks have been itching for an alternative to Bloomberg since 2013, when it was revealed Bloomberg reporters were using the Bloomberg network to access data about clients’ behavior, such as when they were logged in to the service. The breach in confidentiality led to a complaint from Goldman Sachs executives to Bloomberg, a public apology from Bloomberg’s editor-in-chief, and an internal review of the company’s client-data policies and controls.
That experience was the impetus the banks needed to launch Symphony, and today they hope they’ve unlocked the secret to making it a Bloomberg-killer. Of course, as of today, those same banks still remain Bloomberg’s biggest sources of revenue, mainly because their thousands of traders prefer using the messaging system they’ve used for decades. If the banks are serious about unseating Bloomberg, the solution is simple: Stop paying for all those subscriptions.