Gurle: Goldman Consortium's $66M Symphony Will Make Harmony with Markit Messaging

Symphony combines Perzo's platform with the LiveCurrent messaging platform developed by Goldman Sachs to provide a freely-available and standalone platform that can be used by anyone, or─for a fee─can be rolled out by large enterprises as a dedicated instance of Symphony and integrated into their existing applications and compliance tools when the platform goes live next year.

Rather than competing with Markit's initiative of securely connecting disparate messaging platforms, Gurle says Symphony will provide a new messaging application that is better suited to the specific workflow of financial professionals than generic messaging and collaboration tools. "People want a much richer communication platform that integrates content, communication and community," he says. "Financial professionals need to communicate more effectively... and we want to make sure your information exchange and consumption is part of your core workflow."

The platform's open-source design is intended to encourage rather than hinder integration with other platforms, he adds. "The application has built-in modularity, so it can incorporate─or be incorporated into─third-party applications.... Clearly if Markit supports a protocol that we support, we'll [work with] that."

Markit officials call the move "highly complementary," citing overlap with the participants in its own initiative─Morgan Stanley, JP Morgan, Goldman, Credit Suisse, Deutsche Bank, Bank of America Merrill Lynch, Barclays, Jefferies and Citigroup─and noting that Markit can connect to any messaging technology that chooses to federate.

"It's exciting to see continued investment and innovation in collaboration tools for the industry. If there is anything we have learned from the past, it is that there will always be a need to bring different communities using different technology platforms together, and our open network will allow us to connect the Symphony network with the members of the Markit one if they are successful," says Andrew Eisen, managing director and head of Collaboration Services at Markit. "It just shows how important messaging is to the industry and the degree to which firms want control over their messaging. Markit is not a supplier of messaging client software... we enable multiple technologies to interoperate in order to create the largest connected cross-company and cross-function network in the financial industry."

However, Eisen warns that Symphony clients will still need some kind of federation technology─such as Markit's Collaboration Services─to connect to non-Symphony users. "More and new collaboration tools are a good thing for the industry. The challenge with any new technology is that it creates closed communities around that technology. Symphony users will only be accessible by other users of Symphony unless Symphony is federated via our network," Eisen adds.

Gurle─a former senior executive at Avaya, Skype and Thomson Reuters prior to founding Perzo in 2012─says that all users of the platform will have access to the same set of features, and that only dedicated and integrated installations will require a fee. Without disclosing planned fees, he says the vendor has "designed a commercial model so price will never be a barrier."

Companies will be able to use the platform to define and perform real-time compliance on interactions between individuals and groups─such as who an individual is allowed to communicate with and what they are allowed to say─as well as to define what action to take if any individual violates those rules, and to take action within 200 and 400 milliseconds. The platform can take action as granular as being able to identify how many participants in an online conversation saw a specific message that violates a company's policy, and to not only remove the message but also isolate those individuals that saw it, so the rest of the participants can continue the conversation uninterrupted. "That's where we believe we can reduce risk for our customers significantly, Gurle says.

The acquisition was born from conversations at the start of this year initiated by Goldman Sachs, which─in the wake of industry-wide security concerns about messaging security following the revelation last year that Bloomberg journalists were able to collect certain information about clients' usage of Bloomberg terminals, and regulatory crackdowns on banks using messaging to collude on price-fixing of benchmark rates─approached Perzo about building a secure and compliant messaging platform for financial services. Realizing that such a platform had potential application to all market participants, Perzo sat down with some of the firms that Goldman did business with, and found the same concerns.

"By late March or early April, we knew we were on the right track in relation to a deal, so... since the end of March, we froze development of the Perzo experience and focused on the Symphony experience and getting feedback from investors around how it should work and what it will look like," Gurle says.

The vendor quickly assembled a core group of five firms in addition to Goldman, but after its plans were scooped in the press, eight more firms expressed interest in the initiative. The vendor now counts Bank of America Merrill Lynch, BNY Mellon, BlackRock, Citadel, Citigroup, Credit Suisse, Deutsche Bank, Jefferies, JP Morgan, Maverick Capital, Morgan Stanley, Nomura and Wells Fargo, in addition to Goldman, and the vendor has held more than 200 meetings with the participants, Gurle says.

Based on feedback from Goldman Sachs and some of those participating firms, Symphony plans to publicly release the first version of its platform in the middle of 2015─after private and public beta testing periods early and late in the first quarter next year, respectively─before making the production version available to all financial institutions, individuals and other non-financial organizations.