Goldman returns to retail banking
Goldman Sachs could reorganize for the fourth time in three years as it rolls up the welcome mat on consumer banking for all and redistributes those products to its already strong wealth management business.
The former bank has invested billions in its FinTech Markwith the CEO david solomon has dedicated his time since 2019 to building a full-service digital bank. But after racking up losses, Goldman plans to reshuffle its management team to lead a combined asset management and wealth management business unit, Bloomberg reported Monday, October 10, citing unnamed executives with inside information.
Related: Goldman Consumer Banking revenue rises 25% as loss reserves rise 497%
According to the report, this decision shows that Goldman is moving further away from its dreams of a struggling retail bank and also suggests that there could be exits from the top, as has happened in the past when leadership has been reconfigured.
See also: Goldman puts former lenders under scrutiny with plan to offer digital checking accounts
Just six months ago, Marcus was touting consumer verification plans aimed at the masses despite cost overruns and missed profits, PYMNTS reported at the time. As of its first quarter earnings call this year, plans to turn Marcus into a thriving mall were still in place.
“In terms of our aspirations to build the world’s first digital consumer bank, many pieces of the puzzle are in place at this point,” he said. “A lot of those investments have been made.”
Verification, he said, will be an “important part of the product roadmap for us.”
Read more: Goldman’s ability to absorb Marcus unit losses keeps neobanks on edge
The technical issues of incubating a FinTech within an incumbent bank turned out to be more costly and longer than expected. Checking accounts will now only be offered to select consumers with cash as well as employees of partner companies rather than the masses. The bank’s robo-advisor, Marcus Invest, is also restricted to elite clients, as are Goldman’s savings accounts, Bloomberg reported.
See: Report: Federal Reserve reviews Goldman retail unit Marcus
Marcus also faces Federal Reserve scrutiny over his mounting losses and a Consumer Financial Protection Bureau investigation into his credit card offering, PYMNTS reported last month.
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