Max Bowie: Vendors Focus on Solutions that Deliver ‘Solutions’

At a time when low-latency data technology vendors are expanding their offerings to new asset classes such as foreign exchange and fixed income, and as trading firms seek to leverage strategies from the equities and options markets for asset classes yet to be exploited by high-frequency traders, it might seem surprising that the two largest data vendors are redoubling their efforts around their “old school” data terminals.

Bloomberg recently rolled out Bloomberg Next—enhancements to its Bloomberg Professional terminal that provide a more streamlined workflow by consolidating data into collections that are quicker and easier to access—while Thomson Reuters is evolving its much-maligned Eikon terminal into a new breed of workspace that will meld proprietary content and tools with a broad range of third-party services.

Several trends are driving these moves. First—as identified by Thomson Reuters when it first launched Eikon and its Reuters Insider multimedia platform—the makeup of users is changing. The new generation of web-savvy individuals entering finance is more familiar with the internet and app stores than instrument codes and function keys. Second, as algorithms displace human traders in liquid assets, the roles of terminal users are changing, from advisors who need to deliver more value, to front-office staff now trading less liquid and more complex asset classes. And third, as markets become more inter-dependent, these individuals must consider more inputs from separate markets, faster than before.

“Markets are getting more complex and integrated,” said Bloomberg vice chairman and global head of financial products and services Tom Secunda, announcing Bloomberg Next. “Who’d have thought 10 years ago that someone trading technology stocks would care about Greek interest rates?”

Productivity
The changes that comprise Bloomberg Next include new overview pages that consolidate information that users would previously have needed to gather by visiting separate pages within the terminal, easier-to-use menus, simpler functions, explanations of content, and the addition of keyword search, rather than needing to remember function codes, to make the process of using the terminal simpler and more streamlined.

Getting the right answer currently depends on knowing the right question to ask. Future models will include predictive analytics to deliver suggested questions that a user might want to see but may not have known to ask.

The changes aren’t just about making the product easier to use, but about making its users more productive. “Before, you had to do the research to get the answer. Now, we’re giving you the answer, enabling you to go and do the research,” Secunda said.

Thomson Reuters is also talking about ways to deliver “answers,” but will be taking a different approach with future versions of its Eikon terminal.

Around the end of this year or early next year, the vendor will open up Eikon, allowing third-party software and content providers to integrate their services directly into the terminal, creating a desktop “app store”-like model, potentially giving users access to a much broader range of pre-integrated tools and services, while providing a distribution channel for content providers among vendors and sell-side firms.

One advantage of this model is that it will allow the vendor to expand Eikon for specific user types—such as its Eikon for Wealth Management and Eikon for Hedge Funds—by augmenting a basic framework with asset class-specific tools from third-party specialists in areas that may be too niche to be economically viable for Thomson Reuters to pursue, but which it can incorporate and monetize on the other vendors’ behalf. Another is its potential to increase the “community” aspect of Eikon by allowing the sell side to distribute prices and research to buy-side clients without needing to build—or be beholden to—custom delivery platforms.

The next step in the evolution of terminals, I believe, will also focus on “answers.” But while getting the right answer currently depends on knowing the right question to ask, future models will not only predict what a user is likely to want based on their role and query history, but will combine the vendor’s proprietary expertise to deliver suggested questions that a user might want to see but may not have known to ask. That would be a “solution” indeed.