Symphony, the secure messaging app backed by some of Wall Street’s biggest names, launched this week to much fanfare, with events in New York, London, Singapore, and Hong Kong.
The online app replicates the chat application found in Bloomberg, one of the service’s most popular features, and combines it with elements of social media — users have walls where they can post their thoughts and you can search for hashtags used in these posts, as well as on Twitter.
The project was spearheaded by Goldman Sachs, which led a coalition of investment banks in buying chat app Perzo for $US66 million (£42.2 million) last October.
Goldman hatched plans to create the project in the wake of the Bloomberg snooping scandal of 2013, according to the FT, when it emerged that Bloomberg reporters were monitoring the terminals of users in investment banks.
Many in the press, myself included, see the project as a way for banks to wean themselves off Bloomberg and even compete against it.
I sat down with Symphony’s CEO David Gurle during the London leg of the launch to find out: is Symphony really the Bloomberg killer?
“No,” was the pretty straight answer.
“Symphony is the app that the Street [Wall Street] wants to get better productivity across everybody on the Street,” Gurle says.
“Bloomberg only serves a very small percentage of financial services. Roughly 6-8 million people work in financial services, about 1-2 million in capital markets, maybe 320,000 of them use Bloomberg. What about the rest? They use email, they use instant messaging. That’s not productive enough.”
At its most basic, Symphony lets bankers and traders talk to each other securely and privately, but ultimately the idea is to become the go-to social network for finance. Content partnerships were announced alongside the launch giving users access to news headlines from the Wall Street Journal and financial information from S&P Capital and Selerity.
“People want much richer communication than email and there’s really no secure, compliant alternative in the market today,” says Gurle. “That’s the reason Symphony exists. If there’s anything we’re going to disrupt it’s going to be the different messaging tools across enterprises.”
So that means email and also, possibly, Slack, the business messaging app that has exploded in popularity — and value — in the last year and a half.
‘Nobody wants a telephone that talks to a subgroup of people’
Gurle is cautious when I ask about Slack, saying: “Slack addresses the internal communication scenarios for business communications, whereas we address any communication requirements, both inside and outside. I think that’s where the difference is, with a big difference obviously around security and compliance.
But he adds: “Nobody wants a telephone that talks to a subgroup of people, you want a telephone that talks to everybody. Why should that be different for your communication platforms at work?” Read: if you use Symphony, why would you need Slack?
Just like the telephone, Gurle believes Symphony will be way bigger than simply financial services.
He says: “To begin with, financial services, then the adjacent markets — fintech is one, legal organisations who work with financial services, audit and accounting firms.
“Then I see healthcare as an important user because they are regulated and data confidentiality is key. We have tools to meet those requirements.”
All chats on Symphony are encrypted and only the businesses that use it hold the de-encryption key. This is Symphony’s big selling point.
“Think of any industry where there’s a hub and spoke model — automotive, aerospace, where they use many different subcontractors to engineer what they need. Anywhere where there is lots of business to business communication.”
Unlike Bloomberg, which costs an estimated $US21,000 (£13,420) per terminal, Symphony costs just $US15 (£9.50) per user per month, meaning it’s affordable to a much wider range of businesses.
All this plays into the fact that, while there is a strategic rationale behind Wall Street backing Symphony, “there is also obviously intent for a return,” says Gurle.
‘We’ve gone to great lengths to make the regulators job easy’
For now though, just financial services. Partners and investors have been using the product for several months and Symphony currently has 30,000 daily active users (Gurle answered this follow-up question and a few others over Symphony, a nice touch.)
But dealing with financial services means dealing with regulation. The day before the launch event in New York, the state’s Department of Financial Services announced a deal with Symphony that required it to keep copies of chat logs for 7 years.
The startup had previously advertised a permanent deletion service, which would have been a nightmare for regulators investigating wrongdoing.
Gurle is determinedly upbeat about this. “That was a good outcome, I’m really pleased with it.”
“We’ve gone to great lengths to make the regulators job easy. There’s retention — you have to retain a copy [of chat logs] and each country has different length requirements. But then we have export verification tools that mean the data that’s being exchanged in our system is the same as the data that’s being archived. That ensured that there’s been no tampering.”
The Department of Financial Services is also insisting that banks that use Symphony have to keep copies of de-encryption keys, so that regulators can decode the messages easily if and when they have to. Gurle likens it to keeping a spare set of house keys.
Gurle says the company is talking to other regulators around the world, saying they are “curious to see how Symphony works. They’re very receptive.”
‘100 companies reached out to find a place to play in our ecosystem’
Gurle’s focus now is convincing the financial world that Symphony is the new must have product and part of that involves beefing up the product.
“There will be more content partnerships in the coming months, this has generated a strong interest,” he says. “The other angle is people want to embed Symphony into their own applications. Watch for some announcements in the coming months.
“And then there are people who want to build applications to plug into Symphony. Not necessarily content but it could be analytics, could be calculators, could be bots, etc. There are a good 100 companies that have reached out to us to find a place to play in our ecosystem. They all have great ideas.”
Symphony plans to launch an iPhone app later in the quarter and will be introducing an app store-style “marketplace” in the second quarter of 2016.
There have been reports that the company is looking to raise fresh funds at a $US1 billion (£640 million) valuation. So is it true, has the company run through that $US66 million war chest already?
“We have been approached by many potential investors who have shown interest in becoming a new investor,” says Gurle. “At this time, we are happy where we are in terms of investment”
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