An Unfinished Symphony, Nearly Complete
Now, about that DFS probe ...
The symphony, as a form of musical composition, was once a fairly straightforward — even fairly rigid — exercise.
Officially, Mozart churned out 41 of them (though probably more). It wasn't until the end of the nineteenth century when modern composers like Gustav Mahler got their hands on the thing that it really became a massive production and labor of love. Certain exceptions — Beethoven, Brahms — generally prove the rule.
Lately, we've seen a similar labor of love, years in the making, finally coming to life in the fintech world — with the Goldman Sachs-backed messaging provider Symphony Communications Services set to go live in a couple weeks, as my colleague Anthony Malakian detailed this week.
Our friends at IMD have covered this space for years. When I asked their deputy editor Faye Kilburn what the biggest issues are with Bloomberg — the dominant incumbent, by far — and its offering, she noted cost above all else: as much as $3,000 dollars annually per terminal just to chat, which adds up for larger managers, and really does for investment banks with thousands of users.
CEO David Gurle at Symphony echoed her argument, colorfully explaining that Bloomberg's approach to the market is akin to going to a Michelin-starred French restaurant with a fixed menu, when what most people really want is a cheaper, unbundled 'a la carte' option. After a while, even haute cuisine grows old.
This is a space where everything has to go right just for a new entrant to have a chance. If you'll indulge the metaphor one more time, a symphony can be perfectly composed, but audiences still have to hear it for it to be influential.
By all accounts, Symphony is also well ahead in its design, as well — which looks and feels more like Twitter or Whatsapp than anything else currently available.
In fact, when Anthony was finished visiting Symphony in One World Trade and testing out its wares, he opined that our publishing house should be using it, too.
Salieri Appears ...
So it's a measure of just how dominant Bloomberg is — in chat, and for that matter, everything else — that when the NYSDFS state regulator began an investigation of Symphony yesterday, all of us in the newsroom half-kiddingly questioned the timing just a little bit.
The DFS — which is now living life without its erstwhile crusader Benjamin Lawsky — is looking into Symphony's technology, and specifically the potential ability of user firms to erase chat records from mandated communications archives.
This messaging data, of course, has proven crucial to the endless stream of investigations and ten-figure fines authorities have brought against investment banks in recent years, allowing regulators to get to the bottom of several scandals — Libor fixing being the most obvious among them.
To that extent, it's completely reasonable that they should be poking around and making sure Symphony isn't actually mis-designed.
What I would hate to see, however, is this new development somehow tanking the product completely before it's even off the ground. And we shouldn't pretend that won't or couldn't happen.
As Faye pointed out, former upstart Markit Collaboration Services — before being wound down and bought by Symphony — was already dying of natural technology causes: insufficient uptake.
And let's not forget the irony of why Goldman and its 13 partners began developing Symphony to begin with ... because Bloomberg was discovered (and only very lightly punished for) using chat information to develop news stories and reap other advantages of its own without asking.
Clearly, chat is a space where everything has to go right just for a new entrant to have a chance. Indulging the metaphor one more time: a symphony can be perfectly composed, but audiences still have to hear it for it to be in any way influential — no less profitable.
Hopefully we get to discover what this one can do; it's certainly been long enough in the making.
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