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The investment bank plans to begin offering its new online lending platform to consumers this fall, according to comments made by CFO Harvey Schwartz, during the company’s Q2 earnings call .
It originally announced the platform in July of last year .
The bank is moving away from its traditional market and targeting retail customers. This is not Goldman’s only venture into the retail banking market — it began offering savings accounts with no minimum deposit in April . Goldman is likely looking to diversify its revenue streams — Goldman Sachs’ revenue has declined by more than a third since H1 2010, and it saw its worst quarter in four years in Q1 2016.
Goldman Sachs has a plan to ensure it doesn’t suffer the same problems as startup online lenders. It has been surveying consumers about their borrowing priorities and what they want from a lender and incorporating those responses into the new platform design. Goldman says it’s taking its time to develop the product in order to ensure it is based on a robust business model. Harit Talwar is leading the initiative — Talwar was head of US cards at Discover before joining Goldman in June of last year.
But a change in US government could complicate Goldman’s plans. The Republican Party has added reintroducing The Glass-Steagall Act to its economic platform. Glass-Steagall prevented commercial banks from engaging in investment banking activities. If the Republicans were to win the US election in November and this law were then reinstated, it could stall Goldman Sachs’ forays into the retail banking market.
No matter what happens, it’s clear that we’ve entered the most profound era of change for financial services […]
