Unbundling the Bloomberg Terminal

The Bloomberg Terminal is the preeminent tech product of the financial services industry. But a Bloomberg Terminal is expensive, and a Goldman Sachs-led consortium of banks is pushing to create a new inter-bank communication tool called Symphony.

Symphony is offering banks a hedge against Bloomberg's monopoly on user data. The 2008 Bloomberg Data Leak was painful enough to at least suggest the danger of a third party app having uninhibited access to a banker's chat history. While this strategy has obvious benefits, Symphony must prove that it can gradually integrate itself into more valuable segments of the banking business workflow. Unlike the Bloomberg workflow, in which the chat feature coexists in the same dashboard as FX trading graphs, Symphony is highlighting the platform risk of having this information bundled together. Yet this has been the value of Bloomberg chat all along: bankers can create trades across institutions in real time, given the number of counterparties on the network. Not only do all institutions use Bloomberg, but the chat portal is in the exact same app as the orderbook, news ticker, and real-time ship tracker. If information is value, then Bloomberg will undoubtably continue to own the communication workflow for font-office bankers. Without this capability, Symphony is simply outside of Bloomberg's territory in chat-enabled market-making.

But this doesn't capture the full picture. Symphony is betting that back-office bank employees don't need access to a Bloomberg terminal to communicate with their coworkers in real time. Symphony is not selling chat, but a hedge against compliance risk.