Bloomberg and Goldman Sachs think their new data partnership is a sign of Wall Street’s future

This article was written by Dan DeFrancesco and Dakin Campbell for Business Insider and was licensed by Bloomberg.

We talked to the execs behind Bloomberg’s new data partnership with Goldman Sachs. Here’s why they think it’s a sign of Wall Street’s future

A tech platform considered a key part of Goldman Sachs’ future plans is forging a deeper connection with one of the industry’s biggest data companies.

Goldman Sachs has agreed to pipe Bloomberg’s pricing and reference data directly into Marquee, the bank’s trading and risk-analytics platform, according to a statement and interviews with executives on both sides of the deal. The agreement makes Goldman the first investment bank to incorporate Bloomberg data into client-facing applications.

The partnership is a big deal because it shows how a notoriously secretive bank and a data provider known for its branded Bloomberg terminals are working together to get in front of clients.

Industry players have been increasingly realizing that sort of approach could be better than walling all of their services off, given the nearly endless ways people have of accessing information.

The tie up is aimed at establishing Marquee as clients’ first choice when it comes to data and risk analytics, in this case by making it as seamless as possible to work with data from third-party vendors. Clients, particularly those trading in equity markets, have been asking for this and helped push it up the list of priorities, according to Anne Marie Darling, a Goldman partner who’s head of distribution for Marquee.

“The breadth [of data] that they cover is a lot more than what Goldman covers,” Darling said. “Our data is very focused on what we’re trading and the instruments here, whereas they’re covering every single market and pretty much every instrument.”

Historically, Bloomberg provided data to clients only for internal use, meaning it could not be used for any client-facing applications, Gerard Francis, global head of enterprise data at Bloomberg, told Business Insider. While Goldman is the first to enter into such a partnership, Francis said he expects other banks, asset managers and broker-dealers to follow suit.

“They can have much more powerful functionality with their screens and with our data interweaving with their analytics,” he said. In this case, “it allows Marquee to give their clients a much richer customer experience,” he said.

More broadly, the agreement is another sign that Wall Street is overcoming its historical preference for locking customers into closed systems, whether that be Bloomberg’s ubiquitous terminals or one of Goldman’s single-dealer platforms for trading securities.

Future success on Wall Street looks to be favoring the opening up of platforms where firms compete on the strength of the user experience, execution quality or intellectual property. “Ten years ago I would say Goldman was a very closed system,” Darling said. More recently, “Goldman is taking the approach that we want to be very open, figure out where we can partner. It’s really client led, so we want to solve the issues our clients are facing. We know we can’t do that with just the goods and services that we deliver within Goldman.”

The software development has already been completed and Goldman is now in the testing phase, Darling said. The product should go live to clients before the end of March, she said. Deal talks really picked up last summer.

The way the one will work is this: Marquee customers who also have a Bloomberg data license — a separate subscription from the ubiquitous Bloomberg terminal — will be able to download the data onto their own site via Marquee, Francis said. Doing so will help streamline how customers work, he added, as they won’t have to go multiple places to obtain all the data they need.

“In one place they can get all of the data together and download it at the same time,” Francis said. “So it’s a little transformational in the way banks or the buy side are going to be interacting with their customers going forward.”

The agreement is the third major deal to be negotiated between the firms in the last few years. In 2018, Goldman agreed to be the executing broker for equity clients of Bloomberg’s Tradebook platform. And last year, Goldman agreed to make its algo analytics available to clients trading currencies on Bloomberg’s system.

That agreement means that clients now log into Marquee from their Bloomberg Terminal. Francis dismissed the idea this latest deal might serve to dis-intermediate Bloomberg’s terminal. Instead, it’s more about meeting customers where they work, wherever that might be.

“The way we look at our clients, it’s really up to them,” Francis said. “If they have users on their desk and they need to have terminals, they should get terminals. If they have needs where they are building applications to service their firm, they should get our data. In both cases we need to make sure that we are the best at what we do.”