Eight banks join Markit and Thomson Reuters chat network

Reuters

By Jennifer Saba

Oct 7 (Reuters) - Goldman Sachs Group Inc, JPMorganChase & Co and six other banks have agreed to join a newinstant messaging network from Markit and Thomson Reuters Corp to connect disparate messaging systems.

The network, called Markit Collaboration Services, waslaunched on Monday and allows members to chat with one anotherregardless of the proprietary messaging technology that eachfirm uses.

This open platform contrasts with Bloomberg LP's messagingsystem, which is a closed network only for users of Bloombergterminals. Bloomberg messaging is the most popular form of chaton Wall Street, and often cited as one of the reasons banks arewilling to pay around $20,000 a year for a subscription to aBloomberg terminal.

Markit and Thomson Reuters said they hoped their openmessaging network will attract banks that want to chat withtheir clients or other financial institutions but cannotcurrently do so because they are on different messaging systems.

David Craig, president of Thomson Reuters' Financial & Riskdivision, said that the company and Markit started draftingplans for the open network last year at the request of clients.

"This is something that came together with our partners atMarkit because the industry, our customers, asked us to dothis," Craig said. "It's open to the industry to connect to."

The eight partner banks are minority shareholders in theprivately held Markit, and include Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, Deutsche Bank and Morgan Stanley,in addition to Goldman and JPMorgan.

The banks collectively employ more than 1 million peopleworldwide, though it was not immediately clear how manyindividuals will use the new Markit service.

Analysts and customers expressed mixed views about theprospects of the new messaging network.

"Bloomberg has done a phenomenal job integrating everyaspect of that function so that it's hard to replicate and hardto wean people off of it," said Larry Tabb, founder and CEO ofthe Tabb Group, a financial markets research firm.

Zar Amrolia, cohead of fixed income & currencies at DeutscheBank, said in a statement that the new network "allows us toconnect disparate systems and improve the quality ofcommunication and therefore service we provide to clients."

Markit and Thomson Reuters said the messages on the newnetwork are encrypted, and the system does not store them.

The launch came five months after Goldman and JPMorgancomplained that Bloomberg journalists had access to sensitiveinformation about how the banks' employees were using theterminals, including how often they used messaging. Bloomberg apologized, conducted an internalreview, and restricted journalists' access.

Peter Appert, an analyst with Piper Jaffray, said banks aregenerally looking for ways to reduce their dependence onBloomberg terminals, but it remains to be seen if the newmessaging network will take off.

"The big banks are looking for ways to stir the competitivepot and give themselves more clout to negotiate with Bloomberg,"Appert said. "We'll see if this thing catches on and if itreally is a viable alternative."

Representatives from Bloomberg were not immediatelyavailable to comment.

Representatives from Bank of America, Goldman Sachs andMorgan Stanley were not immediately available to comment on thenew messaging system. Representatives from Barclays, Citi,Credit Suisse and JPMorgan also declined to comment.

Shares of Thomson Reuters edged 0.4 percent lower to $35.41in morning trading on the New York Stock Exchange, in line withthe broader U.S. market.

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