It has been 20 years since Bill Gates named banks as “dinosaurs that can be bypassed.” 20 years later, they are still around and fourteen of them, including Goldman, JPMorgan Chase, and Morgan Stanley, revealed a new chat platform named Symphony Communication Services. To create Symphony, these fourteen companies bought Perzo, a start-up founded by David Gurle, the former Thomson Reuters executive. The firms’ total investment sums up to $66m, and each investor will be able to control the new company through his seat on the board.
A “spying scandal” occurred last year, in which Bloomberg was reportedly monitoring bankers through the terminals that each cost $20,000 annually. Since then, there have been talks of looking for cheaper data service providers among banks. According to people familiar with Symphony, the new chat platform has the ability to develop financial functions as well providing a messaging service. In addition, Symphony assures its users of a secure data ownership – it will never have access to the users’ data. This could pose as a viable threat in the future to Bloomberg, for it would allow banks to reduce their costs by replacing these expensive terminals.
The creation of Symphony also aligns with Goldman’s strategy of increasing its technology investments. Lloyd Blankfein, chairman and chief executive, recently noted in an interview, “We’re a technology firm.” Gurle also mentions that this system could be used by companies in other industries, that “there’s clearly a big market opportunity” for the banks to capitalize on this investment.
While some may contend that disruptive technology will bring an end to banks, it is unlikely as recent trends highlight their abilities to adapt to new technology and market developments.
- Angela Weiqian Li