Goldman Sachs is creating a new financial texting system to challenge the traditional dominance of the field by Bloomberg. There are around 320,000 subscribers, both individual and institutional, of the Bloomberg instant messaging service. Known as “Babble,” the upstart Goldman service will allow Wall Street workers to send and receive information fast and securely. Goldman is the first among the top investment banking firms to develop its own text delivery system. Others have been trying to do so as well. These attempts began a few years ago in the wake of the economic collapse. Investors, board members and managers all recognized the need to trim costs at their brokerage houses. Currently, a Bloomberg instant message terminal costs around $20,000 per year.
The need to send instant messages is central to success on Wall Street and The City. In this hi-tech age, information sharing occurs 24-hours a day. Making the best investment decisions requires the ability to communicate with staff immediately. Any hesitation can result in the loss of profits. Thus, Goldman Sachs felt the need to create its own means of communication for its brokers, traders and managers. Companies in the industry also report another reason for wanting to move away from the Bloomberg terminals. According to insiders, there is a suspicion that Bloomberg, has used information sent through its text system in its news reports. This alleged security risk has caused some concern.Bloomberg did conduct an investigation into the potential abuse of the data network by its reporters. Known as the “snooping scandal,” the event led to increased vigilance by the company and its information technology teams to protect the privacy of its users. The media giant also issued an apology for any improper actions taken by its reporters. Nevertheless, the major financial institutions have embarked on this journey to develop their own messaging services. Babble is the first successful design by a single brokerage. Whether other investment brokerages will complete their instant messaging projects, stay with Bloomberg or sign up with Goldman remains the question. For now, Goldman Sachs has become a serious challenger to the monopoly once enjoyed by Bloomberg.