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Is Institutional Finance’s Desktop Dictatorship Coming to an End?

A growing family of apps and start-ups is looking at ways to unchain institutional investors from their desktops.

For years, financial technology has lagged developments in the consumer field, especially in what might be loosely termed “the platform game.” Even as the reign of mobile has taken hold in the consumer technology world, fintech innovations continue to be delivered to professional investors through desktop apps and channels. Might that be finally changing?

Vivek Nasta, 40, was named the global head of mobile at Thomson Reuters in early 2010, following a half-decade stint in various business development roles at Nokia. His task, essentially, was to get the financial data behemoth to be more mobile-sensitive. Thomson Reuters and the other reigning giant of the financial data industry, Bloomberg, have devoted considerable resources to building mobile apps and adaptations of their core services over the past five years or so. The limitation is that, for the most part, investors can only access these mobile offerings in their unfettered richness as long as they also sign up for a pricey subscription to the desktop terminals that are Bloomberg’s and Thomson Reuters’s revenue lifeblood. Most established financial data companies offer low-cost research and screening apps unmoored to desktop subscriptions. But they offer nothing like the desktop-enabled apps’ depth of content.

In the world of the established financial data firms, mobile services exist to funnel money toward “the desktop dictatorship,” Nasta contends. “But to do mobile right, you have to do it for the device mobile users are on — you can’t reverse-engineer a product off a core desktop offering.” Desktop subscriptions are so valuable and the investments sunk into them so considerable, he adds, that none of the financial data incumbents will ever be able to truly develop a “mobile-first” mentality.

After two years of mounting frustration, Nasta quit Thomson Reuters in 2012. Now he’s at the helm of a company which, he hopes, can tap in to the thirst of financial professionals for a work experience that better reflects the technologies and habits of their lives outside of work. Scout Finance is a mobile-only app that gives fundamental investors access to research, filings, pricing, presentations and operational data such as revenue and modeling metrics for the 6,000-odd U.S.-listed equities and ADRs. The app launched last week. Nasta and his handful of employees, who have been working together since the beginning of the year, are so focused on mobile that, he says, “we didn’t even have a web site until a few weeks ago. We’re not mobile-first — we’re mobile-only.”

It’s an open question how much meaningful work financial professionals can actually do on a mobile device. Traders and those close to trading desks, in sales and research, famously use multiple monitors with countless blinking windows and screens running at once. Trading and capital markets’ workflows have many moving parts, from research and idea generation to execution, order management, pretrade and posttrade processing and the many e-mail and instant messaging conversations that take place around these elements. This is why Scout Finance is focusing deliberately on fundamental, long-short equity investors. “We’re not interested in high frequency traders” or those with a short time horizon, Nasta says. “We’re after the thinkers. These people are focused on themes, reading and fundamental information.”

These are early days for Scout Finance, which received seed capital from Jeff Parker, the legendary founder of First Call Corp. and Green Visor Capital. The company’s web site features an enthusiastic testimonial for the app from CNBC’s Guy Adami — “It was genuine,” stresses Nasta — but long-term user enthusiasm is still to be proved. More mature start-ups attacking other segments of the markets’ workflow have already convincingly demonstrated the durable advantages of a mobile-first approach, however. Robinhood’s commission-free mobile trading app has emerged as the runaway success of the fintech world since launching late last year. In November the company announced a series of tie-ins with existing research and trading services that will, it hopes, further enrich its users’ trading experience. Finance-focused messaging start-up Symphony Communication Services, whose backers include Alphabet, Google’s renamed parent company, has already amassed more than $160 million in funding in a little over a year; a core part of CEO David Gurle’s pitch is that Symphony’s messaging service can operate seamlessly across multiple platforms, with a special emphasis on mobile functionality.

For the past two decades, Bloomberg — and, to a lesser extent, Thomson Reuters — has kept a firm lock on the financial data market for professional investors. Getting stuff done in finance has meant getting stuff done on a desktop — or paying handsomely for the privilege to work off a mobile app tied to a desktop subscription. Start-ups such as Robinhood, Scout Finance and Symphony each focus on a discrete function central to financial professionals’ daily workflows: trading and execution, research and idea generation and messaging. Put all those tools together, and, suddenly, it’s possible for many professional investors to get the bulk of their work done through mobile apps.

This does not necessarily represent an existential threat to the financial data incumbents — not for now, at least. “We’re not trying to take away from the desktop,” Nasta insists. “It’s going to be there forever.” Whether there will be paying customers in front of the desktop forever, however, remains to be seen. In the meantime, the mobile-first movement in institutional finance seems likely to gather pace.

Follow Aaron Timms on Twitter at @aarontimms.

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