Goldman Sachs is spearheading an effort among Wall Street’s leading banks to develop a chat tool called “Babble” that could replace the instant messaging service on Bloomberg LP’s ubiquitous terminals.

The project is the starkest sign yet of growing strains between big banks and the company founded by Michael Bloomberg, the former New York mayor.

Bloomberg LP dominates the financial news and data landscape on Wall Street, charging more than $20,000 a year for use of its terminals at a time when banks are under intense pressure to cut costs and comply with new regulations.

The company’s internal messaging service, known as Instant Bloomberg, is one of the main ways for bankers and traders to keep in touch with their customers at pension funds, hedge funds and asset managers.

Goldman’s chatroom project comes after tensions between big banks and Bloomberg were also heightened last year when senior executives at the bank confronted the company over its reporters allegedly using private terminal data to track bankers.

Since then Bloomberg has apologised and it and Goldman have attempted to repair their relationship, but the bank’s efforts to create a viable alternative to Instant Bloomberg risk reviving tensions.

A spokesman for Goldman refused to comment on the project, which has been given the working name of “Babble”, according to people familiar with the effort.

Other banks including JPMorgan Chase – which also raised concerns last year about Bloomberg journalists allegedly using proprietary terminal data to inform their reporting – are said to be involved. A spokesman for JPMorgan declined to comment.

The “snooping scandal” sparked sweeping changes to Bloomberg’s data compliance and journalism practices following independent reviews.

The Babble project is said to be less about concerns over data privacy issues, and more about creating an alternative network which comes at a much lower cost and can also be plugged in to different systems and used by both banks and their clients.

Rival companies have tried for years to break Bloomberg’s dominance in messaging with little success, and it is unclear whether a chat tool backed by multiple banks will flourish where others have failed. At least 320,00 Bloomberg subscribers use Instant Bloomberg.

Bloomberg declined to comment.

Babble is separate to the open messaging network developed last year by Markit, the London-based data provider, which is owned by several banks. The company created the network, known as Open Federated Chat, to link together different internal messaging platforms.

Bloomberg’s proprietary terminals can be found at almost every large bank but bankers are said to be wary of Bloomberg’s growing financial ambitions and see potential conflicts of interest between its data and news businesses.

The company has created a broker-dealer, as it seeks to diversify its revenues away from terminal sales, further straining relationships with banks as Bloomberg gains market share in the business of executing trades on behalf of investors.