Goldman pushes further into retail with online lending platform
Goldman Sachs plans to launch its new digital lending platform in the autumn, according to comments made by Harvey Schwartz, the firm's CFO, during its 2Q earnings call last week. The move comes as the bank seeks to diversify its revenue streams and follows its move into the savings accounts arena earlier this year.

Reuters/Lucas Jackson

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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 companies since the 1970s brought us index mutual funds, discount brokers and ATMs.

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Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees

Traditional Lenders vs. Peer-to-Peer Marketplaces : P2P lending marketplaces are growing much faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful

Traditional Asset Managers vs. Robo-Advisors : Robo-advisors like Betterment offer lower fees, lower minimums and solid returns to investors, but the much larger traditional asset managers are creating their own robo-products while providing the kind of handholding that high net worth clients are willing to pay handsomely for.

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Retail banking

Lending and Financing

Payments and Transfers

Wealth and Asset Management

Markets and Exchanges

Insurance

Blockchain Transactions

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Why financial technology is so disruptive to financial services—it will soon change the nature of almost every financial activity, from banking to payments to wealth management.

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