For almost 40 years, Bloomberg has been an unescapable fact of life in the financial world.
Older than the internet, Bloomberg terminals provided instant messaging for traders before the rest of the world knew such a thing existed. That network—along with up-to-the-second bond pricing, oceans of data, and later, news—helped Bloomberg grow into a colossus that now has 325,000 users and counts most of the world’s investment banks as customers.
But Bloomberg’s market power—and its resulting $20,000 a year subscription fee—makes its biggest clients nervous. In the wake of 2013 revelations that Bloomberg reporters could spy on bankers’ comings and goings, Goldman Sachs and 13 other financial institutions put $66 million behind Symphony, a messaging system secure enough for Wall Street that might dethrone Bloomberg. (Disclosure: I am a former Bloomberg reporter but I didn’t spy on anyone).
Traders, even those at banks that invested in Symphony, are reluctant to give up their Bloomberg terminals. That said, four years after its founding, Symphony CEO David Gurle now describes the company’s goal as not to replace Bloomberg, but to surround it.
Bloomberg provides its clients with data, news, trading capabilities, and messaging, but it’s a walled fortress, a system designed to communicate primarily with other Bloomberg terminals. Symphony’s API platform, in contrast, is designed to integrate with the dozens of existing apps used by banks, and allows them to communicate with other institutions more flexibly.
“If you can create a whole ecosystem that connects every individual without dropping anyone, you can create a network much greater than what Bloomberg has done,” Gurle said in an interview on the sidelines of Symphony’s Innovate conference in New York recently. “The key is openness.”
Gurle compares Symphony to America’s interstate highway system. In that analogy, the banks are cities and towns, and use their own cars to travel on a network Symphony has built. The advantage is that banks can use their own proprietary systems and still interface with other systems. Using Symphony, banks are deploying chatbots that “talk” amongst themselves to make and settle trades. Bots at RBC and AllianceBernstein, for example, can execute trades with each other over the Symphony platform, while BlackRock and BNP Paribas use them to settle mismatched foreign-exchange swaps.
These workflow-automation bots, which didn’t exist when Symphony was founded, are accelerating adoption of the product among financial institutions. And—as with social media networks like Facebook and Twitter—as more institutions join, network effects make it more appealing for others to sign up.
Symphony now has 375,000 individual users at 350 companies, and is adding 10,000 a month. Businesses pay $20 per user per month, far less than Bloomberg’s $1,800. In response, last year Bloomberg introduced a new product that offers a messaging-only service for $10 a month, an effort to connect traders with the back-office employees who didn’t have access to the pricey terminals. That was a market Symphony was eager to exploit.
Bloomberg, of course, is much more than a fancy messaging service and even though Symphony has teamed up with Thomson Reuters to beef up its offering with data and news (at an additional cost), it’s hard to see banks giving up the torrent of information provided by Bloomberg if they perceive it gives them an edge.
Gurle professes not to care. “It’s not going to kill Bloomberg, but it’s going to wake up Bloomberg to a changing world,” he said.