For capital markets firms, a communications system is only as good as its user base.
Emerging communications platform Symphony is seeing the 'network effect', i.e. the product is gaining value as more users sign on, according to David Gurle, its founder and chief executive.
When Symphony launched in October 2015, a trading or investing firm might have been willing to try out the Wall Street-backed upstart with a few licenses. Fast forward to May 2017, and “organizations are growing their user base and that created the network effect,” Gurle told Markets Media. “The network effect created the reputational effect. From there, many more customers have reached out to us and brought together this community.”
In an April 27 release, Symphony listed 40 financial firms that are using the platform, either for inter-company communication or both inter- and intra-company communication. The names included some of the largest and most influential entities across the institutional buy- and sell-side, for example Bank of America Merrill Lynch, BlackRock, Citadel, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, Societe Generale and T. Rowe Price.
As Gurle recounted, Symphony was founded in October 2014 on the premise of addressing a quartet of key financial-service problems via a communications platform: boosting productivity, enhancing security, ensuring compliance, and providing an open platform
“Number one was providing a common collaboration platform that spans across the fire wall of market participants to enable them to communicate seamlessly internally and externally as they interact with each other every day,” Gurle said. That gap in the market had become acute amid a proliferation of different communication solutions over the prior decade, which “created information cycles and prevented organizations from collaborating effectively within and across each other.”
Symphony’s state-of-the-art technology met the needs of institutions who were not properly owning and protecting their data, while fulfilling compliance requirements.
With regard to the open platform concept, Gurle noted that financial firms interact with their customers in multiple different spheres, including onboarding, KYC, and the trade life cycle which includes pre-trade and post-trade.
“Sometimes something gets broken in this cycle and it has to be fixed. All of this requires the ability to communicate effectively with different spheres in the market,” Gurle said. “There is still a lot of manual labor and archaic tools used today -- sometimes even fax machines are used to exchange information. This work is becoming more social and more digital, and there has been a push to provide efficiency via an open platform.”
Symphony counts about 80% of global investment banks as customers, Gurle said. Its user base of 200,000 may represent a penetration of about 10% of all capital markets professionals, based on one industry estimate that that number is 2 million.
“We have done really well with the top buy-side firms,” Gurle said. “We are growing a lot in hedge funds, which is important because they are a key market participant, and we are doing more with regional banks that might be in Italy or Spain or Singapore or Hong Kong. As we take Symphony beyond capital markets, we are looking into investment banking and what you would call corporate. Those are the areas that will help us grow the community significantly over the next 18 months.”
"We're innovating to change how we receive and filter content to reduce information overload for our trading desk. We welcome innovations that improve the transfer of information and communication between the buy and sell side,” Mike Bellaro, global head of equity trading at Deutsche Asset Management, said in the April release. “Improved information flow and front to back end communication allow us to better understand what news or events are trending, which helps us make informed trading decisions."
“Symphony has made a step change in how all of the employees in our Corporate & Investment Bank interact, across the same platform as our clients,” said David Hudson, Managing Director and Head of Markets Execution at J.P. Morgan. “We look forward to further unlocking its potential as we integrate partner applications and APIs, and transform how we work – to be smarter, more secure and more efficient than we already are today.”
Gurle noted that the full range of Symphony’s capabilities are available on both desktop and mobile, and customers can build their own applications to deliver proprietary information and content to their customers. “Many of our customers are building their own Symphony development teams so that they can further serve customers through these applications,” he said.