OpenBB: OpenSource Competing Against Bloomberg
OpenBB , Anyone who has worked in the financial services industry will be familiar with the Bloomberg platform. A research, data and analysis terminal used to obtain real-time information on the financial markets. The Bloomberg terminal has become something of an industry standard, used by more than 300,000 people at nearly every major financial and investment-related corporation globally. But the license costs more than $20,000 per user each year, a fee that is too high for many organizations.
This is something that OpenBB wants to address by democratizing an industry that has been “dominated by monopolies” for the last four decades, and it is doing so with a completely open source approach.
Company evolution
After its initial launch in 2021, as an open source investment research terminal called Gamestonk Terminal, OSS Capital contacted the founding team, Didier Lopes, Artem Veremey and James Masle, to make an investment and build a commercial company on the terminal. And so, OpenBB has been formed with an initial investment of 8.5 million dollars provided by the OSS Capital fund with contributions from notable angel investors, including the initial sponsor of Google, Ram Shiriam, businessman and investor Naval Ravikant and Elad Gil. .
OpenBB is currently at an early stage, aimed at more technically minded people. It bills itself as an “integrated Python programming language-based environment for investment research,” allowing any trader to access data science and machine learning intelligence to unpack raw, unrefined data.
In its initial guise, OpenBB is implemented via a command line interface, although plans are underway to create a more “friendly” interface for less technical users. The platform collects your investment data through publicly available sources and that in some cases requires an API key from which we can make calls to functions that will return the data we are looking for. Some of the financial APIs that OpenBB already works with are: Alpha Vantage, Financial Modeling Prep, Finnhub, Twitter, Coinbase, SEC, Polygon, Coinglass… and many more.
Open source application (Open Source)
OpenBB relies on machine learning for countless use cases. For example, you can look at Apple’s stock price over the last week and then capture news through a Finnhub API and derive the sentiment for each headline using natural language processing (NLP) and then correlate the impact of the Apple stock price news.
OpenBB has developed deep learning models, for example, to predict the price movement of stocks. Using historical data, though in reality the data model can be applied to almost anything, including economic data, crypto, and much more. The company plans to double down on this predictive intelligence.
The idea going forward is that they don’t just rely on past historical data to train the model, but instead use more data available on their platform. For example, building powerful models using stock price, news, social media sentiment, insider trading… anything, really.
While the Bloomberg Terminal is the industry standard for countless financial organizations, there are other alternatives on the market, including Refinitiv, Eikon, and Factset. But OpenBB hopes that its Open Source-based business model and foundation in Python will position it to win over many new users.
Being an open source, affordable and highly customizable application, due to the use of Python, they want to differentiate themselves from the rest of the competition. There is a large community of Python developers. Today it is the standard programming language in finance. For example, one of the many libraries that make up the “Pandas” language is said to have been created by the WallStreet environment. So, for example, an OpenBB user who is a currency trader and wants to integrate some functionality, will connect to the Oanda API in this case and receive the data from there.
Since the source code is available for anyone to modify, companies can create their own version of the terminal with customizations to suit their most specific use cases. If they want to remove part of the application, they can do so and keep only what interests them. For example, if your company is dedicated to cryptocurrency consulting and advice, then you eliminate all aspects of OpenBB that are not related to crypto assets and customize your environment.
For which users is OpenBB intended?
It could be anyone, from investment banks, commercial or product banking, hedge funds (Hedge Fund), to venture capital companies, Family Offices and Investment Funds such as the private investor or more retail. Although the product, as we have mentioned before, is in a seed capital phase, the objective is to scale to large levels.
In the future they want to attract and capture these multinationals that dominate the world today, such as: JP Morgan, Vanguard, Morgan Stanley and some more.
OpenBB seeks to differentiate itself in other areas such as portfolio optimization and attribution (reporting) and to be more tailored to the needs of smaller institutions. Furthermore, they also aim to target different asset classes that may not be well covered on alternative platforms. This may include, for example, cryptocurrencies, NFTs, or fintech loan services, etc.
Among the use cases of the OpenBB application we could find a niche in the field of training. Teachers could use the terminal to explain market movements to students using real data, or for example they could develop their thesis to create products or functions that anyone in the world can access, and all of this could work to the benefit of the students. of OpenBB, since being a free and open source product you do not have that difficult entry barrier, which allows you to be at the forefront and innovate since both students and researchers can scale this product to infinite levels!
Free version
For now the OpenBB terminal will be a completely free proposition, but after the $8.5 million trade deal, it is now a business that needs to be monetized. Some ideas currently being considered include creating a user interface as well as developing a software model where OpenBB will provide its computational power to run machine learning models on large amounts of data.
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 given data source, but if OpenBB could extract insights from that data using machine learning or data science techniques and deliver it with context, then that would probably be something the end customer does want to pay.
It is still early to make a value judgement. Time will tell if OpenBB will become a new standard in finance.
If you want to start experimenting with the platform you can go to the OpenBB website and download it. Then you can consult a series of tutorials that have been created on the application. For example, from the most basic such as its installation to carrying out processes such as the implementation of the APIs and the execution of some initial commands, such as making a comparison of assets based on resolving doubts about whether I invest in one action or another of the same sector and want to compare balance sheets, cash flows or even any aspect of technical analysis.
You can find more information in the following links:
OpenBB installation: https://openbb.co/products/terminal
Video tutorials: https://www.youtube.com/watch?v=8f7cQ-8VxhQ