Money markets and more

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Introduction

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The business environment of today is more complex, faster moving and more volatile than ever. In order to survive in such an environment, businesses need to make decisions faster, responding to customer needs, responding to competitive pressures, hiring good people and getting them into production as fast as possible. The delivery of fast accurate information and analysis is the key for both companies and individuals to respond to the ever changing environment around them – so they can formulate ideas and strategies and take the decisions that offer the reward without too much of the risk.

Operating in this business environment is not easy. One organisation that supplies the financial industry with the tools they need to compete is Bloomberg. Itself a product of a fast moving industry, being less than 20 years old but already the principal provider of key information for better decision-making.

Founded in 1981 by Michael Bloomberg, Bloomberg has today established a position in the financial services industry with a worldwide customer base of leading financial institutions and multinational corporations. With European headquarters in London, the company employs over 7,000 people around the world.

The core product is the Bloomberg Professional. A computer application that resides on the desk top to provide the definitive source of real-time pricing, news, data, historical information and analysis on the global financial markets. The service is available 24-hours a day to more than 250,000 professionals in over 100 countries.

In addition to this core business, Bloomberg has also developed a range of media products that are distributed around the world. These include:

  • 24-hour TV in 7 different languages
  • magazines
  • radio
  • localised web sites.

The Bloomberg vision

To grasp an organisation’s vision is to understand its reason for existence and nowhere more so than at Bloomberg.

'Bloomberg is in the business of giving its customers the information they need - no matter what that information is - where and when they need it - in whatever form is most appropriate. We don’t ask our customers to accept less.' Michael R Bloomberg

This strong culture of customer service and delivering the best, fastest, most accurate information in multimedia format is one of the keys to Bloomberg’s success.

This case study focuses upon the development of Bloomberg as a unique entrepreneurial organisation supplying a range of services for investors and businesses across the world.

Developing an entrepreneurial culture

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As a fast expanding and rapidly developing business, Bloomberg is considered ‘entrepreneurial’. This means that even though they are a large business they have a small company ethos through which employees are encouraged to contribute their ideas and take ownership of the projects that they themselves create.

This results in a workforce that is empowered to take control of their own parts of the business, to carve out roles for individuals with key skill sets and to adapt the company wide business guidelines to their own specific area of responsibility. What works in one region may not in another – the people in those regions have the flexibility to achieve in their own ways. Also, as the business meets the needs of many different client types around the world, staff can specialise on specific areas of the market place.

The Bloomberg professional

Traders and Investors can stay abreast of everything that affects their investments in the capital markets they follow. These include:

  • economic announcements and statistics
  • interest rate movements
  • currencies
  • changes in commodity markets
  • stock price movements
  • analyst recommendations.

By using the Bloomberg software they can search through this wealth of information and data to discover more about the reason for movements in the market.

Tailoring products for the market

Bloomberg has products for a wide range of businesses which take from the system the elements most pertinent to them.

Bloomberg News

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With over 750 Bloomberg journalists reporting from 80 different cities around the world together with feeds from other news agencies and research from brokerage houses, the data on the Bloomberg Professional is supplemented by news stories explaining and analysing the market movements. The stories can appear in many different formats:

  • on the Bloomberg Professional where they are stored and cross-referenced
  • on TV
  • in the Bloomberg Magazine
  • Bloomberg Radio.

Technical analysis

A technical analysis package provides a complete range of tools that enables users to analyse market movements using graphs and charts. Using a mouse driven application to pinpoint market-moving events and ultimately predict changes in direction and opportunities for profit.

Dynamic data

Supplying the data and analysis may not be enough. Some clients may need to populate a proprietary valuation system or pricing model of their own. By making use of the Bloomberg API, data can be linked live into a Microsoft Excel spreadsheet or alternative application.

Electronic trading

With the incredible interest currently focused on e-commerce, every bank is deliberating how to capitalise on the trend. Bloomberg can offer the capability to trade a huge range of instruments electronically, linking a bank’s customers directly to its trading floors.

Exchange links

With the change to an electronic environment, stock exchange buildings, as we once knew them, are being closed, sold and used for other purposes, while the business transacted on that exchange is now carried out via a computer network. One of the great benefits of this is you no longer have to reside in a city to be an active member of that exchange.

An example of this would be the London Financial Futures market (LIFFE). All business that is transacted on LIFFE is no longer done in person, in London, on the LIFFE floor. Instead it is done electronically via a computer network. Bloomberg has programmed to the LIFFE market to give all Bloomberg users the ability to transact electronically the futures traded on LIFFE. This means if you are based in Spain or Germany and in the past you have used a broker in London to manage your futures business, you can now use your Bloomberg instead.

Order routing

In addition to building links to live markets, Bloomberg can link to a specific broker for a specific product, sending equity orders to a broker without having to use the telephone. This gives greater accuracy and speed as well as increasing the capability of both sides to handle greater trading volumes. A further example would be enabling a corporate treasurer to buy and sell currencies and money market instruments over the Bloomberg screen.

Bloomberg Tradebook

In addition to giving brokers the ability to transact electronically, Bloomberg has also developed its own ECN (Electronic Communications Network). Bloomberg Tradebook is Bloomberg’s Electronic Agency brokerage which provides clients (both exchange members and non members) with direct anonymous access to trade global markets through their Bloomberg terminal.

Bloomberg Television

Bloomberg Television is a 24-hour financial news channel that reports the news that moves markets. The unique data screen provides financial data and breaking news headlines at all times, even during the adverts. There are ten channels around the world in seven different languages, with each channel tailored to local markets.  For example, in France, Bloomberg broadcasts in French, with interviews from the key people in French industry, finance and politics. The recommendations of traders and economists based at leading banks in Paris are brought direct from TV cameras installed on the trading floors.

Bloomberg’s television screen is a unique multi-screen format that delivers more information than traditional news broadcasts. With over 180 million viewers worldwide it includes:

  • Video Screen - Delivering 24-hour business news, interviews and live broadcast from global stock exchanges and trading floors.
  • Index box - Constantly updated quotes on the leading market indicators.
  • Context Box - With an extensive running order of share prices, stock indices, bond yields, foreign exchange rates and commodity prices.
  • Headline Bar - Displaying news headlines, business features, analyst recommendations, personal finance and breaking news headlines.
  • Scrolling Tickers - Lists of moving share prices from stock exchanges around the world.

Consumer profiling

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With all types of media it is important to develop a consumer profile of the people who are accessing the channel. This is particularly important for providing a targeted basis for advertising, as well as further development and refining of products.

Bloomberg Television viewers are largely professionals who work for international companies and travel on business regularly. It reaches 183 million households and can be seen in over 151,000 hotel rooms worldwide.

Research also shows that:

  • 69% of Bloomberg viewers travel internationally on business every year
  • Over 40% of Bloomberg viewers spend more than one month in hotels every year
  • Over 35% of Bloomberg viewers earn a salary of more than £75,000 per annum
  • Just under 50% of viewers either own or manage the business they work in
  • Eight out of ten Bloomberg viewers work for international companies.

Digital developments

Bloomberg Interactive Television (BIT)

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As key developments take place during this digital era on the web, Bloomberg has been at the forefront of the development of interactive television. This allows the consumer to customise the content of their screen to show exactly what they want to see at any one time. The great benefit of using the web is that groups of people can be carefully targeted with the information contained within the Bloomberg web sites. These people can also be reached whenever they want, irrespective of where they are.

BIT is an interactive news application that integrates live and archived video, text-based news stories, financial market data and detailed analysis. It also provides live access to Bloomberg News 24 hours a day. This includes:

  • the top 300 news stories of the day are provided via a live feed to the interactive television site/screen.
  • both live and archived video covering areas such as personal finance, technology and media.
  • the ability for users ton track their own customised portfolio of up to 100 shares and funds. Making use of the Bloomberg Database, the user can access current market data including price, change, % change, open, high and low.

The Internet

www.bloomberg.com has become one of the world’s biggest and most popular web sites. The web gives Bloomberg the mass-market audience that is excluded from the typical Bloomberg professional market.

Aside from content and audience, the web makes the transmission of software upgrades and installation of new sites a faster and leaner process. Via the web, Bloomberg has the ability to distribute live and uninterrupted video, giving the ability to use the portfolio of web sites as the latest vehicle for distributing television. And because of the web, data can be collected more efficiently than ever before.

Far from being a competitor to Bloomberg’s core business, the web is a fabulous complement and conduit to Bloomberg continuing to expand its businesses.

Conclusion

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ew industries have changed as much as that of financial services in recent years.Bloomberg has developed a unique position within the financial services industry by providing a range of information services serving customers across the world.

Whether the information is disseminated across the computer screen on the trading floor, onto the TV set in a person’s home, to the newspaper or the radio, Bloomberg endeavours to provide the analysis required to achieve in this fast-moving environment.

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