Thomson Reuters may benefit from Bloomberg woe

Reports said major US banks are uncomfortable with the way Bloomberg journalists used the firm’s data to steer its reporting.

JPMorgan Chase and Goldman Sachs expressed concern about the use of private details on how bankers use Bloomberg terminals, pictured. The Financial Times said JPMorgan had raised informal concerns with Bloomberg over the practices of its reporters.

A New York Post article on Thursday showed that Goldman Sachs had made a complaint to Bloomberg about the practices, and partners at the firm were concerned about the security of the information.

Bloomberg reporters appear to have been able to access information from Bloomberg terminals used by clients. They have been able to see broad information on which functions users access, such as charts or asset classes, and aggregated data on how many people read each story. Reporters and salesmen kept two separate databases that included personal information about customers such as their favourite foods or number of children.

If the complaints go further, and Bloomberg cannot resolve the problem in a way that appeases the banks, more and more traders could turn to Thomson Reuters in order to protect their data from journalist reporting. 

Shares in Thomson Reuters rose by a little under one per cent on Friday to close at $34.40 in New York and C$34.76 in Toronto. So far this year, TRI stock has risen by just over 18 per cent. If Bloomberg’s reputation trades poorly as pressure mounts from investment banks, Thomson Reuters could see its stock trade at a premium as it gains users from Bloomberg’s losses.

Bloomberg’s chief executive Dan Doctoroff said the firm had long made limited customer data available to journalists, but “we realise this was a mistake”. In response, it has appointed an executive to review data compliance policies and disabled reporters’ access to information about when customers log in, which functions they access and what contact they have with its help desk. “To be clear, the limited customer relationship data previously available to our reporters never included access to our trading, portfolio, monitor, blotter or other related systems or our clients’ messages,” Doctoroff said. He posted a damage control message to clients on the Bloomberg terminal and blog, saying “Client trust is our highest priority and the cornerstone of our business.”

Bloomberg was founded as a financial information company in 1982 by Michael Bloomberg, now mayor of New York. About 85 per cent of the company’s revenue comes from its terminals, a business that provides for generous employee perks.

Thomson Reuters, whose desktop data products compete with Bloomberg, seized on its rival’s discomfort. “Thomson Reuters Financial and Risk business and Reuters division operate completely independently with reporters having no access to nonpublic data on its customers, especially any data relating to its customers use of its products or services,” said Yvonne Diaz, director of external communications and PR at Thomson Reuters’ financial and risk division. “Thomson Reuters collects and analyses aggregated and anonymous customer data to improve product functionality and customer experience. There are strict controls in place that prevent any Reuters or other staff outside of the development groups from accessing this data in any form.” ■