Wall Street firms led by Goldman Sachs are close to buying a stake in chat and instant messaging start-up Perzo in pursuit of an alternative to a similar application from Bloomberg, sources familiar with Goldman's plans said.

Banks are trying to cut costs as sluggish trading volumes and higher regulation weigh on revenues. Bloomberg has dominated messaging on Wall Street for years but its application is part of a data, trading and news terminal that costs about $20,000 a year. The Perzo applications are free.

Several banks and asset managers are considering an investment in Perzo, including Morgan Stanley, JP Morgan Chase, Bank of America, Deutsche Bank, HSBC, BlackRock and the hedge fund Maverick Capital, said two sources briefed on the matter who declined to comment publicly.

The companies, which have received term sheets for the deal and signed non-disclosure agreements in recent days, declined to comment or did not respond to requests for comment in time for publication.

Perzo is a California-based startup founded by David Gurle, who declined a request for comment. Perzo's application differs from Bloomberg's in that it is "open-source", meaning customers can plug it into their systems and alter it as they see fit, whereas Bloomberg customers have to buy the entire terminal and can't just buy the messaging system and adapt it.

Banks have been looking for messaging alternatives to Bloomberg’s closed system for years and have had limited success because the Bloomberg system is used by so many on Wall Street.

To succeed, a bank messaging system must be secure, because of the sensitive information transmitted through the application. It must allow for central monitoring, so compliance staff and other officials can monitor conversations to make sure the bank is following securities trading regulations.

– (Reuters)