Symphony, the secure messaging company backed by 15 Wall Street banks, will launch on Tuesday after hammering out a deal with a regulatory agency that once threatened to shut down the first real challenge to the Bloomberg Terminal.
Three years in the making, Symphony was born out of desperation among the world’s most powerful financial firms and investment houses to break free of Bloomberg’s stranglehold on financial software, data and news. Long before people used Facebook, MySpace, Twitter or AOL Instant Messenger, financial professionals depended on the terminal to chat with and keep track of one another. Today, the terminal confers status and privilege to the more than 325,000 financial pros who pay $24,000 a year to use it.
Symphony’s cloud-based messaging service does two things: It uses advanced encryption techniques in order to keep sensitive messages — instant messages mostly — locked up and out of the hands of hackers. But since it’s designed for financial companies, which are required by law to keep copies of their messages for several years in case regulators or law enforcement ever needs them for an investigation, it has also been designed to work in concert with whatever compliance tools those companies have in place.
So when the New York Department of Financial Services raised suspicions over the summer that banks might use Symphony’s encryption technology to avoid the prying eyes of regulators, it seemed plausible that the company could face restrictions on how it does business.
That didn’t happen. Instead, on Monday Symphony announced a deal with the DFS under which it agreed to store for seven years copies of messages that its clients send on the service. Additionally, four banks (Goldman Sachs, Deutsche Bank, Credit Suisse and Bank of New York Mellon) which are both customers of and investors in Symphony agreed to turn over copies of their encryption keys to an independent custodian. When a regulator wants to review encrypted messages, they will be able to decrypt them upon request.
“The agreement is another positive development on the eve of Symphony’s launch,” the company said in a statement emailed to Re/code. “Symphony’s platform safeguards against cyber-threats while strengthening customers’ compliance operations and facilitating their ability to meet their regulatory obligations. Symphony can store data securely for as long as its customers request, and its end-to-end encryption ensures messages are secure. Symphony provides state-of-the-art cyber-security for institutions operating in complex regulatory environments.”
It’s not entirely the end of the regulatory road for Symphony: Over the summer Sen. Elizabeth Warren wrote a letter to federal regulators expressing worries similar to those of DFS, and there are questions pending too from international regulatory bodies. But none of them are especially worrying to CEO David Gurle.
“We’ve engaged in a series of meetings with regulators where we demonstrate that we have capabilities that can be used by regulators to carry out any kind of investigation they may want to do,” he told Re/code in an interview earlier this month. “What we do enhances the ability of our clients to meet their legal and regulatory obligations, but it also gives them the added benefit of secure communications.”
The company is also expected to announce partnerships on Tuesday, including one disclosed by Dow Jones this week. Dow Jones will offer its business news feeds directly within the Symphony app.
Symphony’s open API will also let other potential partners attach services to the messaging platform, which could, theoretically, pose a threat to Bloomberg some day.
Goldman Sachs CIO Marty Chavez is expected to discuss the consortium the firm founded when he takes the stage at the Code/Enterprise Series: New York event on Sept. 29.
This article originally appeared on Recode.net.