Lloyd Blankfein is trying to beat Bloomberg’s geek squad.
The CEO’s bank, Goldman Sachs, is leading an instant-messaging revolt against the financial news and information giant in an bid to keep Bloomberg’s powerful data-mining technology at bay, The Post has learned.
Goldman is wary of Bloomberg’s ability to comb through millions of chat and e-mail messages to glean trade pricing and other valuable nuggets. Hedge funds and other Wall Street clients are increasingly using that information against the banks to level the playing field.
Bloomberg’s data sifting is the biggest reason for the bank’s secret project to develop a cross-bank messaging and market data program, called Symphony, to rival Bloomberg’s dominant instant-messaging platform.
Goldman is upset that Bloomberg can “scrape” chats and e-mails exchanged through its ubiquitous terminals to find and compile the prices of bonds, currencies, commodities or other “over the counter” assets that aren’t traded on an exchange, said a source familiar with Goldman’s initiative. JPMorgan, Morgan Stanley and other firms have also been approached about the project.
The revelation comes a little more than a year after The Post first reported that Bloomberg journalists snooped on terminal users’ login info as fodder for news stories — a function that the company apologized for and scrapped.
Goldman’s push to set up a new messaging system was a head-scratcher when it first emerged earlier this year. The initial thinking was that the bank was trying to cut costs by paring back the Bloomberg terminals, which cost a hefty $24,000 a year.
But Blankfein has been ramping up the tech side of the bank — going so far as declare on Bloomberg TV in June that “we’re a technology firm.”
As part of Symphony, the bank is planning to invest around $6 million in Perzo, a program that’s touted as having “military-grade” encryption. The deal is expected to close as soon as next month.
Bloomberg’s chat and e-mail system are two of its most-used functions allowing buyers and sellers to trade pricing info and clinch deals.
Bloomberg’s data-mining function, which is voluntary and available to all terminal users, allows any client to quickly scan thousands of instant messages and e-mails on the Bloomberg system, then compile those prices internally for his firm, a Bloomberg insider said.
For instance, the program allows a hedge fund to see the prices of a bond across banks and have a better view of the marketplace, said the insider.
“It’s information asymmetry on steroids,” one Goldman insider told The Post.
Goldman could opt out of the function, but then it wouldn’t be competing with other banks on the same platform, the insider added.
Tiffany Galvin, a Goldman Sachs spokeswoman, and Mark Murphy of Bloomberg declined to comment.
While the company doesn’t hide its parsing technology, some brokers and traders who use Bloomberg’s terminals every day were clueless that the company can scan through private emails and chats to compile prices.