Symphony orchestrates WeChat solution for banks
The deal sees the communications and content platform for banks expanding beyond pure B2B.
Symphony Communications Services, the Palo Alto-based provider of collaboration and comms platforms for financial institutions, will announce a deal next month with Tencent to enable bank staff to use the Chinese company’s popular WeChat app.
David Gurlé, the company’s founder and currently serving as head of its Asia operations, says the first iteration of the service should be available early next year.
“Compliance around WeChat and other messaging apps is a hot topic for large banks,” he told DigFin. “We’re building a solution for that.”
Other fintechs have solutions to make messaging apps compliant for financial institutions, which is also of growing concern to regulators. Gurlé says Symphony’s approach is to do so in cooperation with Tencent. “We need Tencent to buy in,” he said, noting that Symphony is a service, not a software vendor, and it needs the company’s help to avoid liabilities around data – risks that it doesn’t want to pass on to its bank customers.
He was not able to detail how the service will work, other than to say it will let a banker connect to external parties via the app while complying with their firm’s rules, in a secure environment.
But there will still be a need for banks to review their rules around an employee using WeChat. Tencent will continue to own the data of any message sent via its network, which is not encrypted end-to-end. Therefore Symphony can’t guarantee confidentiality, so banks will still need their own guidelines about what their people can or can’t say on WeChat. But Gurlé says the fintech can otherwise enable compliance within the bank’s own security.
The project represents new challenges for Symphony, which got its start four years ago as a bank-led consortium by providing a platform incorporating instant messaging, like Bloomberg, and cross-team project work, like Slack, but in a more contained environment.
Today the company has 330 financial institutions using its service, but the business has been completely B2B. By tackling WeChat, Symphony is moving down a lair to individual use outside of a bank’s proprietary zone. The company had to recruit a team of engineers in Shenzhen who understand Tencent’s technology.
From B2B to B2C
“Asia is taking us into B2C,” Gurlé said, adding that if the WeChat project is a success, Symphony will look to other messaging apps it can bring into the banks’ fold. Gurlé says 360,000 users are signed up from the various bank clients to use Symphony. “This is ground zero for us.”
Gurlé founded the company in 2014 with a view to addressing the post-financial crisis emphasis among banks for risk, compliance and security. It completed a $67 million Series D round of fundraising in April, bringing its total funding to $296 million. Gurle says the company is now valued at $1.1 billion.
Barclays and Citic CLSA were among the latest backers. Earlier stakeholders include Bank of America, Citi, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Natixis, Nomura, Societe Generale, UBS and Well Fargo, along with private equity and venture funds.
Gurlé held senior sales roles at Skype and Microsoft before founding a precursor to Symphony in California, which was then transformed into a consortium with 15 founding banks. Afterwards, he based himself in Europe and Singapore to oversee rollouts in other regions. Now he is situated in Hong Kong in order to run the Asia business; Queenie Chan, head of North Asia, drives Hong Kong sales.