BlackRock to Push Wall Street Chat Tool
June 24 2016 - 9:40AM
Dow Jones News
The world's largest money manager is trying to change the way
Wall Street chats.
BlackRock Inc. will urge banks, brokers and others who interact
with it to communicate via a messaging platform backed by banks and
investment firms called Symphony Communication Services LLC,
according to people familiar with the matter.
The asset manager, also an investor in Symphony, started testing
the system with thousands of employees internally last year and now
has moved all internal chat messaging to the service, the people
said.
The hope from those backing Symphony is that BlackRock's push
will help jump-start the service's use across the
financial-services industry.
Symphony was created as an alternative to Bloomberg LP
terminals, long a hallmark of trading floors and an expense banks
have struggled to trim. The firms also like Symphony's
secure-messaging technology.
Despite the fanfare that followed Symphony's late-2014 launch
and last year's $100 million funding round that included an
investment from Alphabet Inc.'s Google, Symphony has yet to gain
widespread use, according to traders across Wall Street.
At Goldman Sachs Group Inc., a Symphony investor that
contributed its own messaging developments to the platform, the
service is now used by most of the firm's employees across all of
its businesses, according to a person familiar with the situation.
Goldman traders, for instance, use Symphony to communicate with
back-office employees charged with settling trades.
Elsewhere, though, Symphony remains little used or, in some
cases, virtually unknown.
Of about a dozen employees reached at financial firms that have
invested in the service, some were only aware of small-scale pilot
programs in specific corners of their trading floors.
The lack of broader takeup has sown doubts that Symphony would
become an alternative to Bloomberg's multipronged service that
costs financial firms $22,000 to $25,000 per employee a year. After
attracting bankers and investors to its chat service, Symphony aims
to pipe in data, news and other tools, coming closer to the array
of functions Bloomberg provides. Symphony charges companies $15 a
month per user for the chat service.
A Bloomberg spokesman declined to comment.
Dow Jones Newswires, a wire service of Dow Jones & Co.,
publisher of The Wall Street Journal, is a provider of news on the
Symphony platform and competes with Bloomberg.
David Gurle, Symphony's founder and chief executive, said the
company's clients wanted to prove that the messaging service could
meet their internal needs before a broader rollout. It is in the
early stages of opening communication between employees at
different companies, a process that comes with complex compliance
and control hurdles.
There also have been technological hurdles, Mr. Gurle said.
Symphony needed to build software that would allow its clients'
compliance employees to monitor, limit and block data that leaves
or enters their firms through employees' communications.
"We needed to make sure we built real-time compliance tools,"
Mr. Gurle said.
Symphony's long-term success hinges on its ability to embed
itself in the day-to-day communications across Wall Street,
particularly in the interaction between bank traders and outside
asset managers.
Jody Kochansky, head of the Aladdin product group at BlackRock,
which has $4.7 trillion in assets under management, said there are
no plans to require outside firms to use Symphony to communicate
with the asset manager. "We would expect those in the consortium to
use it, but we are not imposing it on them," he said.
BlackRock's roughly 13,000 employees globally now have access to
the service, giving Symphony its largest user base to date from the
firms that buy securities and other services from banks and
brokers. Money manager T. Rowe Price Group Inc. is also a new
Symphony customer, the Baltimore-based firm confirmed, giving
Symphony a foothold in the mutual-fund industry.
The group of Wall Street firms had formed Symphony in late 2014,
in turn acquiring Mr. Gurle's messaging startup, Perzo Inc. But
before Perzo's agreement with the group of financial firms, the
startup met with Bloomberg executives to discuss a potential sale,
people familiar with the matter said. A deal never
materialized.
Write to Justin Baer at justin.baer@wsj.com and Sarah Krouse at
sarah.krouse@wsj.com
(END) Dow Jones Newswires
June 24, 2016 09:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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