Symphony CEO David Gurle Discusses Goldman Sachs/Consortium Deal, New Platform

Perzo founder and Symphony chief executive officer David Gurle spoke with WatersTechnology about the firm's plans going forward following the purchase and how it came about.

On the Rollout
Currently over 23,000 Goldman Sachs employees are using the service, Gurle says, though the service is not available today at any of the other 13 firms. He says that Symphony will roll out a private beta version in early Q1 2015, with a public beta arriving in late Q1 2015. "From there we will expand to all financial institutions and non-financial institutions that want to use it," he says.

On How the Deal Came About
Goldman first approached Perzo. "Goldman saw this as not only an internal problem, but an industry-wide problem." Goldman had a platform that was in development called Live Current that was tailored to the financial services sector; Perzo's communication platform was delivered via the cloud and had an encryption system in place that made it secure, Gurle says.

Around March/April 2013, they started talking to five other key partners of Goldman to help put together the development roadmap. Gurle's team began development, despite the fact that a deal was yet in place to buy the company.

"Clearly, when the deal is not signed and you are an entrepreneur and you're shifting all of your resources from the product roadmap you were on to something else, it's a risk," he says. "But it's a risk that I embraced wholeheartedly because I truly believe that we're going to make it and that this was the right thing for the company."

Leaked reports of the project in the media led to an "avalanche of inbound interest," and five partners turned into 14 by the fall. "We never expected so many people eager to have a similar input," he recalls.

While the platform is a combination of Goldman's offering and Perzo's, Gurle says that all 14 firms had input into the development of the system.

"We wanted to make sure that we understood their problems as early as possible, so we went and talked to all of those firms and had over 200 meetings with those firms, each bringing in more people to demonstrate the product to and talk to," he says. "Those meetings were extremely constructive and we received feedback around what kind of compliance engines they wanted to see in the system, how they wanted to optimize the end-user workflow when it came to pre-trade discussions, how they wanted to see the research distribution, and the different perspective between buy and sell side."

On Markit as a Competitor/Collaborator
In various media reports, Symphony has been portrayed as a competitor to giants like Bloomberg, Markit and Thomson Reuters.

Gurle does not view Markit's Collaboration Services, a suite of messaging and federation tools, as a direct competitor to Symphony's platform because his service is better suited to the specific workflow of financial professionals, as opposed to a more generic messaging and collaboration tool. Also, because Symphony is open source, it's easier for other developers to integrate with the platform, and vice versa.

"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 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."

In an interview with Water's sibling publication Inside Market Data, Markit called Symphony "highly complementary". (It should be noted that Goldman Sachs has joined Markit's federated network, along with Deutsche Bank, Thomson Reuters and others.)

On Bloomberg as a Competitor/Collaborator
In addition to Goldman, the consortium includes a who's who of Wall Street firms: Bank of America Merrill Lynch, BNY Mellon, BlackRock, Citadel, Citi, Credit Suisse, Deutsche Bank, Jefferies, JPMorgan, Maverick, Morgan Stanley, Nomura and Wells Fargo.

Judging by the fact that so many big-name banks have jumped into the fray with Symphony, to Gurle's earlier point, messaging is not a "Goldman problem"; it's an industry-wide challenge.

According to Gurle, Bloomberg serves 320,000 users of 2 million in this space with its Instant Bloomberg service, so there's still plenty of green grass to be found. Gurle compliments Instant Bloomberg and how it works with the overall Bloomberg suite of solutions, but Symphony will look to separate itself by integrating three distinct services: security, compliance and data ownership.

"Bloomberg comes across in the market as a holistic platform. They bring together an amazing amount of content ─ historical, real-time, analytics, calculators, news, etc. I'm not sure how much of the Bloomberg user base would only use Bloomberg just for messaging.... Security, compliance and data ownership hit raw nerves around the marketplace and we couldn't have a conversation with any of those [consortium] firms, without those nerves being soothed. Our approach has been about working with them and making them comfortable so that they feel in control."

On Compliance
When it comes to the firms compliance capabilities, Gurle breaks the Symphony offering into three sections:

1. Information barriers: Who can talk to whom; who can't talk to whom; internally and externally.
2. Passive compliance: i.e. Recording the conversations and archiving them and giving them ability to analyze the data based on queries.
3. Real-time (Active) compliance: Technology allows the customer to define a set of policies around interactions people have in terms of what they say, what they send, how they send it. Symphony captures those messages in real-time, running them against a policy engine and allowing compliance officers the ability to decide the action they want to take when a violation occurs. All of this happens within 300-400 milliseconds, he says.

As an example: "If I'm sending a message to a 200-person chat room, we can track how many people have seen this message. We know if the screen was on top, if the mouse was on it, etc. Based on that we can decide if only five people have seen this message and therefore those five people have been contaminated and we'll take them off and quarantine them, and the remaining 195 can have active conversations in the chat room."

He continues: "That's unique because that allows the collaboration to go on even if there was an instance when people in the group had to be isolated."