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8 Major Banks Join Instant Messaging Initiative

Markit is powering the new industrywide federated IM platform with Thomson Reuters' backing. Where does this leave Bloomberg?

With instant messaging capabilities proliferating the financial services enterprise, many users are tired of fragmented communication networks that can't share information with users on a different platform. Today, Markit is launching a federated messaging service that allows allows users to see availability, send instant messages, use video and chat rooms, and exchange documents across disparate messaging platforms.

The new messaging platform, called Markit Collaboration Services, is backed by Thomson Reuters and eight other major financial institutions, including BofA Merrill Lynch, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase and Morgan Stanley.

In comparison to the cost of the financial industry's other established instant messaging community, currently on the Bloomberg Professional platform, Markit Collaboration Services is a steal. Bloomberg Instant Messaging, or Instant Bloomberg (IB), is the most most popular instant messaging platform, but only comes as part of the Bloomberg Professional platform. Users reportedly pay approximately $20,000 per year for access to the Bloomberg Professional platform. In comparison, Markit Collaboration Services will be offered free of charge.

"This is confirmation of the much rumored collaboration that has been going on across the industry," says Peter Moss, managing director, trading, financial and risk at Thomson Reuters, in an interview. "We have been doing work with Markit and other banks to connect the networks that could not previously talk to each other."

Thomson Reuters is a founding member of the network and will federate its instant messaging tool, Thomson Reuters Eikon Messenger, with the network. Thomson Reuters Eikon Messenger was built using open-based standards to offer a secure, federated messaging system that facilitates collaboration across the financial markets. It already connects to other messaging platforms such as AOL and Yahoo!.

Markit Collaboration Services, with Thomson Reuters Eikon Messager's user base of 200,000 and the financial institution's employee base of over one million users, creates a massive network that will compete with Bloomberg's instant messaging service. Currently, Bloomberg Professional has an estimated user base of over 315,000.

[For more on how Thomson Reuters has been expanding access to Eikon Messenger, read: 1,300 FXall Customers Get Access to Eikon Messenger.]

However, Bloomberg users are fiercely loyal to their "terminals" and the IB service is already part of most user's workflows. Over the years, competitors have had trouble dislodging users from the Bloomberg Professional terminal because the product is so tightly integrated with many financial organization's other systems, including trading, research and portfolio management applications.

Federating messaging platforms allows institutions to offer the benefits of a cross-industry collaboration network to employees throughout their enterprise.The federation service is powered by NextPlane, a provider of cloud-based unified communications (UC) federation services for business communities.

"When people come into the office, they don’t just want to use the phone," Moss adds. "They want to use messaging. The industry has been getting frustrated wit hall of the islands of connectivity where people can't communicate with each other."

The new network also provides the first open directory for the financial services industry, enabling people to find, communicate and collaborate with one another. The messaging and directory services can be embedded in third party applications, workflows and other networks, extending the functionality of trading, processing, research and other applications, according to Markit.

Thomson Reuters Eikon Messenger (formerly Thomson Reuters Messenger) is an enterprise-level instant messaging tool designed for the financial markets. It is open to all financial markets professionals, regardless of the desktop they use, and available either via Thomson Reuters Eikon or as a standalone instant message tool. It allows financial professionals around the world to participate in a community consisting of customers, colleagues and business counterparties.

So, will the new Markit Collaboration Services offering be enough to move users off of Bloomberg IB? Let us know in the comments below. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/9/2013 | 12:08:48 PM
re: 8 Major Banks Join Instant Messaging Initiative
When you talk to Bloomberg Terminal users, they love it. They don't want to switch. The Bloomberg Messenger feature is only a small part of the package. It is important, but the users love their terminals, that's for sure.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/8/2013 | 9:24:33 PM
re: 8 Major Banks Join Instant Messaging Initiative
Interesting. What are the chances that a critical mass of budget-minded executives gets it into their head that free = better overall and starts weaning new users off the old system and onto the new one? Is Bloomberg overall so valuable that a free messenger can't even scratch the surface of its value?
Nathan Golia
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Nathan Golia,
User Rank: Author
10/8/2013 | 9:23:07 PM
re: 8 Major Banks Join Instant Messaging Initiative
That could make all the difference. It will be interesting to see how Bloomberg responds to this move into a corner of its market.
Becca L
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Becca L,
User Rank: Author
10/8/2013 | 8:27:34 PM
re: 8 Major Banks Join Instant Messaging Initiative
Agreed, I think Bloomberg has had a fantastic run in the industry and it's high time for some healthy competition.

Bloomberg should be wary of the adoption rate of Markit. For every medium size firm that adopts it, that's a lost potential customer that might have eventually "given in" to Bloomberg's subscription fee. And those at the cusp might back out in favor of a free/cheaper alternative.
anon9252576306
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anon9252576306,
User Rank: Apprentice
10/8/2013 | 5:08:05 PM
re: 8 Major Banks Join Instant Messaging Initiative
Markit messenger sounds like a poor man's Bloomberg.

Rather than Blackberry, I relate to this more like Facebook. Initially open to a select bunch of elite US Universities, now every Joe has an account and has access to everyone. You may now get irritated with unknown people adding/messaging/distracting you.

Markit, being owned by Invt Banks, 8 major banks is all they have, now go try getting buy-sides on-board. Wonder if any switch over.

Having sold Bloomberg terminals at 20k, most of my user-base would pay that for the communication tools alone. The financial network on Bloomberg has been built over the last two decades. I would'nt find it as challenging to sell a 20k instant messenger as I would to push usage on a free competing messenger.
gogreen-traders
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gogreen-traders,
User Rank: Apprentice
10/8/2013 | 2:44:10 PM
re: 8 Major Banks Join Instant Messaging Initiative
Competition is a good thing. No system is perfect, and improvements can always be made. If this makes bloomberg do something that is better, great!
IvySchmerken
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IvySchmerken,
User Rank: Author
10/8/2013 | 1:29:36 PM
re: 8 Major Banks Join Instant Messaging Initiative
Small and medium size firms that can't afford the steeper subscription fees of Bloomberg might sign up with Markit and try it out. It's a no-brainer for them. I think some of larger firms that want to support a competitive offering, will use Markit, which could give it the critical mass it needs to get names in its directory. I don't think firms will leave Bloomberg's IM system, for all the reasons cited. But Markit's federated, more open system could put pressure on Bloomberg to do something different.
gogreen-traders
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gogreen-traders,
User Rank: Apprentice
10/8/2013 | 12:39:53 PM
re: 8 Major Banks Join Instant Messaging Initiative
I'm not sure if it will move traders off of the Bloomberg. But Markit might be a nice additional IM tool to have to connect to other people...especially since it doesn't cost (much, anything?) to connect.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/8/2013 | 10:02:03 AM
re: 8 Major Banks Join Instant Messaging Initiative
It might be somewhat like Blackberry, but Bloomberg has a few things going for it.

Blackberry never had a good app business. Even today, apps on the Blackberry stink. Bloomberg has a literally thousands of tools and functions (or, using a mobile term 'apps') that are linked to proprietary internal systems. For instance, a firm will take data and metrics from Bloomberg, have a developer use an API to pull the data into a trading tool, or risk management app. So, if you are using a Bloomberg Terminal, chances are you have 100s or 1000s of APIs linking Bloomberg data to your proprietary systems.

Ripping out Bloomberg just to get federated messaging would require disruption at many levels.

Blackberry was never as tightly tied to the enterprise. Email was integrated, but once Apple and Android could do the same thing (while offering great apps), users jumped.

When the iPhone came out, RIM/Blackberry ignored the threat. Now, it's obvious it wasn't a smart business move for RIM.

Still, it's early, and I'm sure Bloomberg is looking at Markit Collaboration Services as a threat.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/7/2013 | 9:20:40 PM
re: 8 Major Banks Join Instant Messaging Initiative
This sounds a little like what happened to BlackBerry Gă÷ the current preferred platform is secure, dependable, locked down, and expensive. The new one is free and open to all entrants, which helps unify people based on what device they want to use. Yes, iPhones/Android devices aren't always free, but they are accessible, and are differentiating based on user experience.
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