Markit Launches Encrypted Social Network For Wall Street

Markit Launches Encrypted Social Network For Wall Street

Markit is launching a new messaging platform that promises to let Wall Street and banking professionals interact freely without worrying that the information they share will become publicly accessible, according to a report on MarketWatch.

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“It could ultimately end up being the LinkedIn Corp (NYSE:LNKD) of the financial industry,” said BlueMountain Capital Management strategist Perry Vais.

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Bloomberg LP, a competing service, has come under scrutiny for the way it handles peoples’ data, especially after it became known that some journalists were using the service to find information. Most of the time they were just looking up contact details, but in at least a few instances, data found on the platform ended up in news stories.

Bloomberg stopped giving journalists access to the service earlier this year, but the damage is done and there is a clear interest in having a more secure networking standard: Bank of America Corp (NYSE:BAC), Merrill Lync, Barclays PLC (NYSE:BCS) (LON:BARC), Citigroup Inc (NYSE:C), Credit Suisse Group AG (NYSE:CS), Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB), Goldman Sachs Group Inc (NYSE:GS), JPMorgan Chase & Co (NYSE:JPM), and Morgan Stanley (NYSE:MS) are all founding customers and co-owners of the service alongside Markit. Thomson Reuters is also on board, bringing 200,000 people from their existing Eikon Messenger platform, so the new service won’t even have to go through the awkward growing pains that most social networks experience.

Markit won’t be able to gather data for its own data business

What sets this messaging platform apart from LinkedIn, Bloomberg LP and the like is that Markit won’t have access to the information being transmitted. Encryption will be used to keep messages private from everyone but the sender and receiver, and Markit won’t be able to gather data for its own data business.

The real innovation is that Markit is treating its users in the financial sector like its primary customers, something that is hardly ever done online. Facebook, Twitter, and similar sites offer a free service in exchange for information and access, both of which can be sold to the company’s firms, which are the actual customers. Whether you think Markit is flipping this business model on its head or just taking a traditional approach to services depends on your perspective, but with so many major players already signed up, it’s clearly a popular idea.

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