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  1. Home
  2. / Investing
  3. / Financial Services

Goldman Sachs Bets on Tech to Stand Out

Firm plans to spend $175 million on technology initiatives.
By MARTIN CASSIDY Jul 17, 2018 | 05:45 PM EDT
Stocks quotes in this article: GS

Goldman Sachs (GS) seeks to differentiate itself from competitors via its growing digital banking arm, Martin Chavez, the firm's chief financial officer said Tuesday.

The investment-banking giant is investing heavily in digital products, spending approximately $175 million from investments to drive growth, Chavez said during the company's second-quarter earnings call.

"There's a sizable revenue pool," the CTO said. "It's an exciting opportunity ... and we're seeing it as a two- to-three-year build."

Goldman's online-banking offerings are led by "Marcus," a savings and personal-loan platform named after the firm's founder, Marcus Goldman. The initiative launched in 2016 as an online platform to let customers start low-balance savings accounts or obtain no-fee loans of between $3,500 and $40,000.

Marcus has about 1.5 million customers so far, and Goldman has originated $4 billion in unsecured consumer loans through the platform since 2016.

Chavez said GS will also launch a consumer-deposit product later this year in the United Kingdom. Three months ago, Goldman acquired Clarity Money, a free-to-download application that helps guide members through cutting costs or refinancing credit-card debt.

Sanford O'Neill analyst Jeffery Harte said Goldman's attempts to build up its consumer banking business through Marcus and other online initiatives is a smart move, generating higher-interest loans than Goldman might otherwise get.

"They are focusing on doing it electronically and we're seeing growth there," Harte said. "They can earn a better return of those deposits this way."

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TAGS: Investing | U.S. Equity | Financial Services | Stocks

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