This story was delivered to BI Intelligence " Fintech Briefing " subscribers. To learn more and subscribe, please click here . The legacy investment bank began offering a savings account to retail customers via its online banking platform, GS Bank, in April. The account requires no minimum deposit and has an interest rate of 1.05%. So far, around 33,000 accounts have been opened, and customer deposits are at around $1.8 billion, according to the Wall Street Journal. For context, Bank of America attracted $18 billion in new consumer deposits between Q1 2016 and Q2 2016. GS Bank is using high interest rates to attract customers. GS Bank’s savings account currently offers the highest interest rate of any savings account in the US. This is likely part of a strategy to draw customers away from more well-established retail banks like Bank of America. It may also help consumers overcome reservations they might have about moving to a bank that has historically focused on investment products for wealthy customers. The savings account seems to be the first step in a plan to diversify revenue by increasing loan volumes. Goldman Sachs is planning to launch another retail product, an online lending platform, in the fall, CFO Harvey Schwartz said during the company’s Q2 earnings call . The company is likely trying to attract deposits now in order to have enough capital to be able to fund a significant volume of loans via the new product at launch. We’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs. No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new fintech revolution. The battle already underway will create […]
