THE BUSINESS OF TRADING TECHNOLOGY

Chandler Paris

cur·ric·u·lum vi·tae

Symphony – A Story

Symphony Communication Services

Symphony has the potential to become financial services greatest network simply due to its model. A network which securely connects buy-side to sell-side for messaging alone is not that interesting. However, allowing applications that provide technology services to use that network to service brokers and institutions is very interesting. Technology providers such as those that supply market data, analytics and transaction services have traditionally been standalone applications which required proprietary network connectivity and desktop installs.

Giving that type of application a network to bolt onto which already connects the end users to each other for messaging has a great advantage. Of course if the network has a limited set of users then the value of that bolt on capability is limited to the point that it’s likely not worth coding to. But if there is a critical mass of buyers and sellers then that will create the desire to build for that community. The best and most successful example of a network effect is Bloomberg. However, being the best also brings a premium price which most users find they need to pay in order to most efficiently reach their counterparty. But, if there were a lower cost alternative with similar capabilities and applications or functions, then those in need of such services will likely flock to that network. I believe that network is Symphony.

From Wikipedia, the following 15 financial firms invested in Symphony in September 2014: Bank of America, BNY Mellon, BlackRock, Citadel, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Jefferies, JPMorgan, Maverick, Morgan Stanley, Nomura and Wells Fargo. On October 12, 2015, Symphony announced it had raised $100 million in a new round of funding lead by Google Inc. Other investors include Lakestar, Natixis, Societe Generale, UBS Group and venture capitalist Merus Capital.” That’s quite an impressive list of backers. “On November 28, 2014, Symphony Communication Services LLC acquired technology assets developed by Collaboration Services, the open messaging network from Markit Ltd. for an undisclosed amount.” “The technology was first built as an internal messaging system by Goldman Sachs called Live Current.”

So that establishes a firm backbone. Then there’s the functionality matter. Symphony has the messaging, which Fidessa also acknowledges as a key factor in Symphony’s potential success . A few recent participants now has me believing that users will likely start to seriously consider Symphony.

The first thing needed by capital markets participants is market data and analytics. OTAS Technologies, 570 Lexington Avenue, New York, NY 10022, otassales@otastech.com, is the technology arm of OliveTree Agency Broker. OTAS developed analytic “tiles” which help traders visualize market data and order analytics, has signed onto the Symphony network. Visualizations of often complex analysis help traders to understand potential issues faster than wading through columns on alphanumeric monitors.

The next would be an execution platform. Flextrade, a leading vendor of multi-asset transaction products also recently joined Symphony’s network.

Those two vendors alone create a compelling product basis for a small broker and affiliated customers. Now add Google and it starts to get really interesting. With Google’s investment and a potential link with the blockchain and this little network could very well be the next big thing.

References

About Symphony