PS if you missed my recent webinar you can watch it here: “The Evolving Role of Salespeople in the Capital Markets”

Bloomberg announced last week that it is opening up IB (it’s famously closed chat ecosystem) to internal chatbots. I believe this is an incredibly interesting development in the industry for two reasons: 

1) Most importantly, it shows Bloomberg opening its ecosystem. We’ll get into that, but to give some context (no pun intended), the only way to get information out of IB historically was to use a clunky workaround that leveraged the ‘compliance’ feed. This introduction of chatbots is a continued extension of its IB Connect effort. Specifically, they seem very focused on getting data into Bloomberg, vs. having a user leave the application. To me, the interesting part is the only natural conclusion you can draw from this evolving strategy: they are worried about, or more likely actually seeing, users leaving Bloomberg to go to other applications.

2) It lays the foundation for massive workflow improvements by solving manual and administrative tasks, and making conversations even more contextual (okay, last one). I’ll share some thoughts for both the sell side and buy side.

Bloomberg has historically been a very closed ecosystem. It’s one of the reasons it has such incredible pricing power: if you’re not in the Bloomberg network, it makes it very difficult to have real time conversations (and you must fall back to the only other option, email).  It’s also the de facto trading communication channel. Finally, it hasn’t historically integrated well with other applications, which may have been intentional, but made it almost impossible to get other data sets into Bloomberg. You only had the conversational data, which was very basic. 

In a way, Bloomberg ‘screens’ connections at a high level by charging an exorbitant fee. It has other hilarious applications that you’d only find on such a high end ecosystem, like its own classifieds. But those barriers seem to be coming down: at the very least, like a recluse nation hiding behind its walls, they are finally opening up to the idea of contact with the outside world. 

Opening up Bloomberg to chatbots is a way of making it easier to get data in and out of the Bloomberg ecosystem. Chatbots can allow you to ‘write’ to external databases, and allow you to pull from external databases. The move shifts IB from a pure communication layer to a User Interface (UI) as well. It may very well be Bloomberg’s goal to have you interact with all internal front office systems through IB. It’s a way to query and write to the firm’s knowledge graph. This opens a world of new opportunities. 

The majority of the use cases in the press release are trading related, but to me the more exciting use cases are non-trading related – here are a few ideas that jump to mind:

Sell side:

• The ability to get summaries of recent research/desk content: “@researchBOT can you summarize our note on TSLA this morning for me, and share the PT?”
• The ability to get administrative information: “@corporateaccessBOT can you share all upcoming marketing in Boston over the next 60 days?”
• The ability to target outreach: “@outreachBOT can you tell me everyone who might be interested in TSLA?”
• The ability to update client interests: “@clientBOT can you add TSLA to Adam Smith’s interest list at Fund ABC”
• The ability to understand recent client interactions: “@clientBOT can you give me summaries of the latest meetings with ABC Fund?”
• The ability to log meetings/conversations: “@clientBOT just had a great chat with Sarah at ABC Fund, log: ‘very interested in the EV space, especially TSLA – want meetings’”

All these bots would pull and push data from CRMs, client intelligence applications, public data sources, etc., which isn’t exactly new, but they have the potential to make the data much more accessible which ultimately means it will be more used. The biggest challenge to every sell side firm isn’t necessarily that they don’t have the data, it’s that the right person doesn’t have it at the right time. That, plus no one logs anything (because they are understandably busy). Making that data more available for consumption and logging through automated bots where front office users sit all day (Bloomberg) could be an effective solution. 

For the buy side, there are equally exciting use cases:

• The ability to get upcoming events: “@corporateaccessBOT can you tell me who is marketing TSLA over the next 60 days?”
• The ability to get the latest commentary: “@discoveryBOT who has been mentioning TSLA over the last 30 days?”
• The ability to manage operational entitlements: “@entitlementBOT can you distribute a my new admin email, [email protected]”

Suffice it to say, there is a big opportunity here, and this represents not only a tactical opportunity (the ability to create bots that will solve administrative/tactical challenges), but also represents a shifting in position at Bloomberg (based on what I’ve seen over the past ten years). It shows the firm opening up, and a potential shift from being a closed ecosystem, to an open ecosystem where they instead focus on being the user interface for the industry: a place where you can not only talk to connections, but also interact with every application.

Finally, this feels like a very dangerous evolution for any existing applications that are in the business of data logging and retrieval. If you’re an application that captures manually entered data, and serves it up to users on demand, then Bloomberg is coming for you. Specifically, they want users to interact with your application through Bloomberg, not through your UI.

The most obviously impacted group here will be CRMs. Every brokerage has challenges with getting users to use their CRM (from boutique to bulge), but if users can log and pull client interactions directly from Bloomberg, then it shifts the value of a CRM to more of a flexible database (to manage the business) rather than an application with an elegant interface (to hopefully drive the business). 

Only time will tell

As always, don’t hesitate to reach out if you have any questions, and to all our clients in the US, have a great Thanksgiving

Blair

Blair Livingston

CEO

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