A number of major investment firms have signed up to a messaging service developed by Markit, putting pressure on Bloomberg to reduce the cost of its own collaboration tools.
Merrill Lynch, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase and Morgan Stanley are some of the banks that will implement the Markit’s Collaboration Services system at ‘enterprise level’ following its launch, the company stated. Between them, the banks using the chat tools support a combined workforce of over one million employees worldwide, all of whom will be able to use the new network.
The service is aimed at allowing the banks to see availability of users, send messages, use video and chat rooms, and exchange documents across disparate messaging platforms, and is based on cloud software from unified communications (UC) player NextPlane.
The federated messaging platform will enable integration of a range of existing tools including the instant messaging tool found in Thomson Reuters Eikon platform, as well as integrating with Microsoft’s Lync and Cisco’s Jabber software. It will also support messaging standards such as XMPP and SIP.
Commenting on the launch, Zar Amrolia, co-head of fixed income and currencies at Deutsche Bank, said that the service will enable cost savings at the firm: "This new network allows us to connect disparate systems and improve the quality of communication and therefore service we provide to clients.
"We welcome any initiative that improves access and communication across markets and with our clients. The service will refine our back office technology footprint, whilst bringing efficiencies to our client facing franchise across the bank."
Rival to Bloomberg Instant
The messaging system will rival Bloomberg’s Instant messaging system which is used by employees at many trading firms globally, as part of its $20,000 (£12k) terminal subscription. Bloomberg currently has over 300,000 subscriptions to its service worldwide.
However the backing of Markit's network by major banks will be a blow to Bloomberg terminal business, which has already come under scrutiny following revelations that the company’s journalists had accessed confidential customer information on its terminals.
Ovum financial services analyst Rik Turner commented that, while it is unlikely that Bloomberg’s customers would ditch its terminal business over night, it will inevitably come under pressure to reduce the cost of a service which has received criticism for its price in the past.
“It’s clear that Bloomberg’s messaging service has played a phenomenal role in promoting customer loyalty and stickiness for Bloomberg, and that situation is not going to change overnight. It is still very early days for any alternatives,” he said.
“That said, there have been rumblings about the cost of Bloomberg, and that was even before Bloomberg had its ‘NSA moment’ earlier this year when it had to admit its journos had used info about what its customers were following on their terminals to get story ideas.”
He continued: “Thus the Markit initiative comes at an ideal moment. The banks that are signing up are clearly not about to ditch Bloomberg tomorrow, but they are testing out an alternative and sending a message to Bloomberg itself that it needs to sort its life out and maybe think about dropping prices or somehow bundle more things in to make prices more attractive, lest the banks do eventually decamp to another provider.”