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Bubble? LMAO - YOLO! Wall St gets new instant messaging service

Symphony to take on ubiquitous Bloomberg terminals, but concerns remain

A rival to the ubiquitous but expensive Bloomberg terminals will launch this week on Wall Street.

Symphony was set up a year ago by Goldman Sachs and 14 of the world's biggest banks after it was revealed in 2013 that some reporters from Bloomberg's news division spied on the use of the company's business terminals held by leading figures in the finance world.

The Symphony system has been used by a number of investment banks, including Bank of America, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan, and Wells Fargo for some time, but on Tuesday it will be officially launched in London.

While it hopes to take over the role that Bloomberg terminals currently hold in the banking industry, so far its only confirmed feature is a secure and encrypted chat system, although it is expected that the company will announce the addition of a news wire service provided by Bloomberg rival Dow Jones.

The chat service has already brought some controversy however. Senator Elizabeth Warren, renowned for her hard stance on Wall Street excesses, wrote to several regulators last month expressing her concern that the service would be used to circumvent regulators and law enforcement – chat records have been key to uncovering Wall Street wrongdoing.

The same concern was raised by New York's Department of Financial Services, particularly over a "guaranteed data deletion" feature that Symphony touted on its website. Four banks under the DFS' jurisdiction this week agreed that they would store all chat and email data through Symphony for seven years, but that rule does not apply to others that will be using the service.

Symphony, based in Palo Alto, California, has since removed the "guaranteed data deletion" wording from its website and said that its system will work with company's archive systems.

Market shake-up?

It's not clear how much competition Symphony will bring to the market dominated by Bloomberg terminals, or whether traders will use the two systems side by side.

Bloomberg's terminals offer an incredible array of data on the financial markets as well as newswires, contact information, and secure messaging to anyone else with a terminal. Traders view them as critical to their jobs, which is why 325,000 of them pay $21,000 a year to subscribe to the service – that's nearly $7bn in revenue a year.

The money from the terminal subscriptions make up the bulk of Bloomberg's profits, and the news service was originally developed as a way to sell more of them. Bloomberg News reporters are trained on how to use the data capabilities of the terminal in order to identify breaking news and get it out ahead of rivals.

However what wasn't known outside the company, until 2013 at least, was that those reporters were able to see when individual subscribers were logged on. The news was blown when a Bloomberg reporter asked an executive from Goldman Sachs whether a partner at the bank was still employed there because he hadn't logged onto his terminal recently.

It turned out that reporters were also able to see subscribers' personal contact details and – which sparked the creation of Symphony – able to view subscribers' chats between them and Bloomberg representatives. Although Bloomberg rescinded all those privileges, the financial industry was spooked and started looking for alternatives.

One ironic side-effect, if people do move away from the Bloomberg terminals, is that the company would not be able to hire as many reporters and in turn would reduce the speed and quality of financial news and information provided to traders.

Symphony will be cloud based and will be open source, according to its backers. Its codebase will be largely derived from chat platform Perzo, which Goldman Sachs and its consortium bought for $66m last October.

In a blog post published at the end of last week, Symphony product manager Koray Oztekin, formerly at Skype, wrote: "After nearly a year of full-on design and development, we're putting the finishing touches on our big public release and I'm raising my hat to our team. We will offer customers an adaptable communication and workflow tool that can be scaled and personalized for every enterprise, every user."

He claims that the product "molds to everyone's unique needs, and integrates a wide range of message formats and functionality – including chat rooms, content streams, internal and external cross-company communications – into one platform." ®

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