Instant messaging is an ever growing part of financial communication, and it is ever-more the focus of regulators looking for evidence of market abuse. GlobalTrading spoke to Sanjeev Chatrath, Managing Director, Asia Pacific & Japan, Financial & Risk, Thomson Reuters about the new networking tool.
What brought on this new development?
For a very long time in the industry a lot of communication has been happening through closed networks, while there has been an increasing industry drive towards open standards and messaging. We want to provide a platform that is open and trusted and based on innovation, which is where our recent initiative came from. It is as open as can be, and comes from some of the industries’ leading practitioners. It is a demand that came from clients, to not be shackled into closed networks, which limits their price discovery and opportunities to communicate with the wider market. To use a mobile phone analogy, being on many of the current closed networks on messaging are like being only able to call people on the same network as yourself, which would be very inefficient.
The partnership with Markit and other industry leaders is the right thing to do for the industry. Open communication allows the clients to leverage a lot of the investment that has already been made, both intra- and inter-firm, through contact directories, which can be very empowering.
Compliance was definitely was one of the many considerations; we want to be able to provide the tools for communication in a manner that is auditable, and as regulatory concerns continue to grow it is critical that more and more firms have vetted contact databases and auditable trails of dialogue and communication in a manner that is transparent. It definitely was a consideration but it was not principal; the openness and transparency does ease the work for the regulator.
Is this an evolution of current models, or more revolutionary?
With what we have, through the Eikon messaging service and its 200,000 users, it is a very powerful base. This is definitely an evolution of what we have been offering for some time, but with other partners it allows for an expansion of that platform. As a federation of a number of partners coming together over time it will grow and the benefit to each member will no doubt increase.
It is definitely an evolution of the strategy that we already have. We have the base from Eikon and its interfaces, and this is building upon that. It is bringing together a very meaningful set of members to have the same kind of discipline and rigour that you’d normally have within firms, but now doing it between firms. That can be quite transformational. The openness is a very big draw, as people don’t want to be dependent on closed network solutions, as it doesn’t allow them to engage their stakeholders. A lot of people have already invested into intra-firm messaging services, and this allows for an increasing leveraging of those existing networks and the investments that have already been made in communications technology while also reaching out to a broader base of stakeholders in the technology.