OpenBB wants to be an open source challenger to Bloomberg Terminal

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Anyone who has worked in the financial services industry is familiar with Bloomberg Terminal, a research, data and analytics platform used to gain real-time insights into financial markets. Bloomberg Terminal has become something of an industry standard used by more than 300,000 people at just about every major financial and investment-related company worldwide — but it costs over $20,000 per user per year to license, a fee that is prohibitively high. is for many organizations.

This is something that OpenBB wants to address, by democratizing an industry that has been “dominated by monopolistic and proprietary incumbents” for the past four decades – and with a fully open source approach.

After initially being launched last year as an open source investment research terminal called Gamestonk Terminal, the founding team of Didier Lopes, Artem Veremey and James Maslek was approached by OSS Capital with a view to an investment to set up a commercial company. build on top of the terminal. And so OpenBB is formally launching this week with $8.5 million in funding from OSS Capital, with contributions from notable angel investors including early Google backer Ram Shriram, entrepreneur and investor Naval Ravikant, and Elad Gil.

Open for business

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The newly named OpenBB Terminal is largely an alpha-phase product, one aimed at the more technically minded. It is presented as a “Python-based integrated investment research environment”, giving any trader access to data science and machine learning smarts to extract raw, unrefined data.

In its initial guise, OpenBB is implemented through a command line interface (CLI), although there are plans to build a proper GUI for regular users. The platform collects its investment data from publicly available sources, or sources that require an API key – these include Alpha Vantage, Financial Modeling Prep, Finnhub, Reddit, Twitter, Coinbase, the SEC and many more.

OpenBB relies on machine learning in numerous use cases. For example, it can look at Apple’s stock price over the past week, then make headlines through one of Finnhub’s APIs and derive sentiment from the headline using natural language processing (NLP), then evaluate the impact of news on the stock price of Apple. correlate apples. †

OpenBB: Natural Language Processing (NLP) is used to correlate the impact of news headlines on corporate stock pricesOpenBB: Natural Language Processing (NLP) is used to correlate the impact of news headlines on corporate stock prices

Elsewhere, OpenBB may also leverage deep learning to predict price movements using historical data, though in reality the model can be applied to just about anything, including economic data, cryptography and more — and the company plans to make this predictive smart.

“The idea going forward is that we don’t just rely on historical data from the past to train the model, but use further data available in our platform,” Lopes told VentureBeat. “For example, building powerful models using stock prices, news, social media sentiment, insider trading… basically anything.”

Industry standard

While Bloomberg Terminal is the industry standard for countless financial organizations, there are other alternatives on the market, such as Refinitiv Eikon and Factset. But OpenBB hopes its open source credentials and foundations in Python will come in handy to win the hearts and minds of many – flexibility is the name of the game after all.

“Being open source, affordable and highly customizable through the use of Python sets us apart from these platforms and tailors them to the specific needs of small to medium-sized institutions,” said Lopes. “The advantage we have over competitors is our open source nature when it comes to incorporating external data sources.”

Indeed, being open source means that the wider community can add their own flavors to the OpenBB mix – for example, a contributor who was interested in the foreign exchange market (Forex) added an Oanda integration to the project.

Since the entire source code can be modified by anyone, companies can create their own version of the terminal with customizations to suit their own niche usage. If they want to remove all clutter and work purely with one type of asset, they can create some sort of lightweight version of the terminal with a much narrower focus on Forex or cryptocurrency, for example.

But who exactly is the intended end user? In reality, it could be anyone from regional investment banks and hedge funds to venture capitalists, family offices and mutual funds. But the product isn’t quite at that stage yet – that’s where the initial seed money comes into play. It’s about building the product into something that can serve a potentially large market.

“Long-term, we could also target companies like Morgan Stanley, JP Morgan, Blackrock, Vanguard, UBS, Goldman Sachs, Deutsche Bank and the like,” explains Lopes. †[But] we understand very well that this is not possible now.”

There’s no escaping the ubiquity of Bloomberg Terminal, and it’s clear that it won’t be knocked down anytime soon – but that’s not OpenBB’s immediate goal.

“Because it’s a product that’s been around for over 40 years, it’s [Bloomberg Terminal] has become a staple for many of the larger institutions,” admitted Lopes. “OpenBB realizes that it cannot compete directly with this industry standard. One of the big caveats about the Bloomberg Terminal is that costs are relatively high for a small to medium-sized institution, an area we can capitalize on.”

OpenBB also wants to differentiate in areas such as portfolio optimization and attribution (reports), and align more with the needs of smaller institutions. In addition, it also aims to target different asset classes that may not be covered as well on alternative platforms – these could be cryptocurrencies, NFTs, fintech lending services, and so on.

“Digital assets is a niche area that is not covered extensively, for example by providing insight into movements within this sector, but also more advanced areas such as valuing loans to a farmer in Africa,” Lopes said. “These are topics that we can distinguish quite easily if we notice that there is a lot of interest in this area. That’s one of our advantages of being open source and developing in Python.”

And then there’s academia, an arena that OpenBB can capitalize on: educators can use the terminal to explain market movements to students using real data, or PhD students can develop their dissertation to build products or features that accessible to everyone in the area. the world. And this could all work in OpenBB’s favor as well.

“Since our product is free and open source, we can easily reach academia, keeping us at the forefront of innovation as students and researchers can develop new features to further enhance the capabilities of OpenBB Terminal,” said Lopes.

End point ascent

For now, OpenBB Terminal will be a completely free proposition, but with full commercial activity now behind it and $8.5 million in the bank, there will be a concerted effort to monetize it. Some of the ideas currently under consideration include building a “slick 21st century user interface”, as well as developing a SaaS model, with OpenBB providing the computational power to run machine learning models on large volumes. data.

In addition, OpenBB is also exploring ways to build bridges between data sources and investors. For example, an investor probably wouldn’t want to pay for raw data from a particular source, but if OpenBB Terminal could extract insights from that data using machine learning or data science techniques and deliver it with context, it’s something that an individual or organization would like to pay.

It’s still early days for OpenBB, but the early traction it gained in its original form last year suggests there’s real demand for what it promises – which is why OSS Capital is betting on Lopes and Co.

“The investment research industry has been dominated by monopolistic and proprietary incumbents since the 1980s, and it has taken anyone until now to develop an open source, democratized platform for the current and next generation of market makers, traders and stock professionals,” OSS Capital Founder Joseph Jacks said. “OpenBB is the right idea, at the right time.”

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This post OpenBB wants to be an open source challenger to Bloomberg Terminal was original published at “https://venturebeat.com/2022/03/30/openbb-wants-to-be-an-open-source-challenger-to-bloomberg-terminal/”

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