Symphony to Make KYC Play as Part of Ongoing Rebrand

In line with its decision last fall to rebrand as an end-to-end workflow platform for capital markets, Symphony Communications Services is making a play in the know-your-customer (KYC) space. The move is part of its plan to make client and trade lifecycle management services a core of its business.

In what the company is calling Directory 2.0—named similarly to Symphony 2.0, unveiled at Symphony Innovate last year, and Meetings 2.0, the enterprise-grade version of its video-conferencing-in-the-cloud service, the first version of which was released this spring—the company will create an identity management service, building on its existing database of basic corporate information, says Brad Levy, Symphony’s newly-appointed president and chief commercial officer. 

Levy previously led the MarkitSERV and Loan Platform businesses at IHS Markit, and currently sits on the US Commodity Futures Trading Commission’s Technology Advisory Committee. In both roles, Levy has focused on digital identity and KYC solutions. 

He says Directory, as it stands today, includes basic information such as name, phone number, email address, and maybe what someone’s very high-level role is. The next version, which will likely go live next year, aims to create rich personal profiles that describe who each party is and alerts counterparties to changes in a relevant profile’s state as they happen.

“What I’m trying to do is bring client lifecycle management (CLM) and trade lifecycle management (TLM) to a sounder footing and have them relate to each other more, specifically in someone’s daily work or in a firm’s relationship back to an account,” Levy says.

For example, say a big bank has just established a new relationship and has to onboard that client. After that, the two perform a trade, but the next day, that client changes, such as they launched a new fund, someone’s title changed, or are now connected to a new (potentially sketchy) entity. The bank then does another trade based on its idea of who the client is. But, the client has changed its relationship with the bank, even though its file still hasn’t caught up.

As Levy puts it, if BlackRock or Pimco set up a new fund, part of Symphony’s job will be communicating that and how that changes their identities to the rest of the Street.

He adds that another use-case for Directory is to help clients meet regulatory requirements, such as in the event a bank, as a counterparty in a swap, needs to repaper itself with its dealer in its Isda Agreements. That’s a client lifecycle management moment where Symphony wants to help, Levy says. The other side of that is trade lifecycle management, to account for what someone has traded, what they want to trade next, and what the margin is.

“We’re trying to solve for all these interactions, largely between the buy and sell sides, but really between any market participants, which could be virtually any combination including providers interacting with the buy or the sell side,” he says.

Buy-Side Buy-In?

While Symphony has been most successful attracting banks and vendors as clients, the buy side has proved a more challenging demographic to capture for the six-year-old company. Though chat and collaboration tools remain Symphony’s flagship products, an extension to CLM and TLM, as well as building tools for the front, middle, and back offices, could create a different value proposition for asset managers and hedge funds.

Building solutions for banks is a bit easier than building those for the buy side, Levy says, as banks are larger, comparatively more homogenous than the gamut of buy-side institutions, and have adopted and built their own technologies on a larger scale. 

“Ultimately, it really comes down to: Do we understand the buy side’s needs, their use-cases, and their problems, and are we building solutions to solve for them?” he says. “And while it could be similar and rhyme with the sell side, it could be completely different, or it may just be different in terms of the timing of when they have those issues. So I think making a version of what we do and applying it is fine; I think coming up with newer, different solutions that really cater to them [is better].”

Symphony will also look to create easier ways for the buy side to join its community, such as lowering the barrier to entry onto the platform. That could mean anything from the way they get onto a Symphony service, to the product that entry happens on, or even the commercial model around how the company thinks of the buy side today.

By 2025, Levy says Symphony and the industry will, hopefully, be looking back upon its work of having cleaned up the “messy” components of the client and trade lifecycles across every asset class around the world. In 2023, Levy hopes they’re well on their way to reaching that point, but for now, clients can expect to see new roll-outs and expansions in 2021.