Is David Gurle’s Symphony a Big Threat to Bloomberg?

The CEO of Symphony Communication Services says his messaging network is cheaper and more flexible than the Bloomberg terminal.

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When the Bloomberg data and communication network suffered a nearly three-hour crash during Asian and European trading hours one day in mid-April, there were howls of outrage (mostly figurative, though some literal) across the global financial industry. The Bloomberg terminal, which has more than 325,000 users, is the glue that holds together the world’s biggest financial institutions. Bankers complained about their sudden loss of access to market data, price discovery and news, but the loss they felt most keenly was that of the terminal’s messaging network. One analyst dubbed it the chat crash; the episode underscored the degree to which market participants rely on Bloomberg to communicate.

Symphony Communication Services aims to change that. In late April the fledgling Palo Alto, California–based company launched the beta version of a network that it hopes will unshackle Wall Street from its terminal obsession.

“Financial professionals want to be able to communicate in a way that’s more flexible, more open and more adaptable,” says Symphony CEO David Gurle, a communications industry veteran whose résumé includes long stints at Internet phone pioneer Skype and financial data firm Thomson Reuters. “And they want to unite all the disparate platforms they communicate across in one single point.” Whether that desire is strong enough to put a major dent in the seemingly impregnable domination of the financial data and messaging world by Bloomberg and, to a lesser degree, Thomson Reuters remains to be seen.

Symphony is designed to be its own messaging platform and plug into all the other tools that a financial professional might communicate through — e-mail, internal chat network, text messaging. Gurle says there are roughly 50,000 Symphony users today; a general market release will follow in July, with the goal of growing to 100,000 users by the end of the year. Content and workflows — to manage and execute trades, for instance — will be added to the network in 2016, and Gurle plans to build what he calls an App Store–like ecosystem that he hopes will become a hosting ground for small, innovative fintech companies.

Beyond openness — a quality the closed-box Bloomberg terminal is often accused of not exhibiting — price should also make Symphony’s offering attractive. Gurle says the service will cost no more than $30 a person per month, placing it well below the $20,000 needed for an annual Bloomberg subscription.

Symphony is backed by some of global capital’s heaviest hitters: 15 sell- and buy-side institutions, including asset manager BlackRock, hedge fund firm Citadel and Goldman Sachs Group, pooled funds to provide it with $66 million in venture capital late last year.

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It’s not unusual for financial institutions to come together to support utility-like endeavors such as this one, though the venture capital funding structure of Symphony, which doesn’t oblige today’s stakeholders to maintain their equity share in any follow-on rounds, is a rarity. “I think we’re going to see more of this type of collaboration across the industry as the economics underlying finance shift,” says Suresh Kumar, chief information officer at Bank of New York Mellon Corp., one of Symphony’s backers.

But can financial professionals be convinced that they should trust Symphony with proprietary communications and transaction and pricing data more than they can trust Bloomberg? The genesis for Symphony came from Goldman Sachs, which started building a new industrywide communications network as an in-house technology project a couple of years ago. Goldman suffered a spectacular falling-out with Bloomberg in 2013 after it emerged that reporters in the data firm’s news division had improperly accessed information on Goldman employees’ terminal usage to generate stories. Bloomberg instituted a review of its privacy policy and has since made strenuous efforts to reassure its users that their communications are completely private and secure.

Bloomberg is a data firm, not a market maker; it doesn’t use its balance sheet to take positions in the markets. In private, some bankers confide that entrusting their communications to a company owned by a consortium of firms that do may not be a wise move.

“I’m surprised to hear that, because the very reason we set this up was because banks weren’t happy with Bloomberg,” says Gurle, adding that Symphony has built its network with “end-to-end encryption” over which end users have complete control. This makes the system secure as a matter of “technology, not policy,” he claims.

Wall Street is paved with businesses that have taken on Bloomberg and failed. For all his bullishness, Gurle is realistic about the likely speed of Symphony’s emergence as a genuine competitor to the terminal giant. “People forget it took Bloomberg a number of years to get to this place,” he says. “Nobody can expect a new company to come along and disrupt Bloomberg overnight.”

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