Next Up From Goldman: Checking Accounts?
April 27 2016 - 10:00AM
Dow Jones News
Goldman Sachs Group Inc. is weighing additional banking services
for its new online deposit-taking platform, including checking
accounts and electronic-bill payments, people familiar with the
matter said.
Goldman launched its deposit website last week following the
close of its acquisition of GE Capital's platform, along with some
$16 billion in deposits. The Wall Street firm opted to make few
changes to the site, and kept rates on savings accounts and
certificates of deposit the same, to help retain existing
customers.
Before the unit's sale, though, GE Capital had considered
broadening the site's offerings to include other popular banking
services. Goldman is now looking at how it might expand beyond the
three products it now features: a savings account and two CDs, the
people said.
The additional services aren't imminent, the people said.
Goldman intends to wade slowly into additional offerings and may
ultimately choose to stick with savings products. It's unclear if
Goldman would issue debit cards or paper checks, though the firm
isn't interested in pushing into credit cards, one of the people
said.
"Over time we are going to take stock of what our customers want
and the products to meet their needs," a Goldman spokesman
said.
The additional services—and the idea of pairing them with
savings accounts—are far from novel. Many firms such as Discover
Financial Services and Ally Financial Inc. already offer such
services to customers online.
But going deeper into retail bank products could introduce new
complexity for Goldman's efforts and may also attract added
regulatory interest. The firm's debut in Main Street banking has
caused a stir, raising questions from bankers at other Wall Street
firms, including rival Morgan Stanley.
The deposit-taking site, a major departure for a firm
historically more focused on billionaires and large clients,
launched a few months before the planned offering of Goldman's
other foray into retail banking: an online lending platform slated
to make its debut later this year.
The deposit site is part of a strategy at Goldman to improve its
funding options and to diversify its business lines while its core
sales-and-trading business has at times struggled. Regulators have
told banks in recent years that having more retail deposits will
improve their resilience in times of economic stress.
This week, Goldman executives have scrambled to keep pace with
the volume of site traffic and inquiries about deposits at its call
center in Cedar Rapids, Iowa. Some would-be customers said they
have struggled to sign up for the accounts.
"We are focused on integrating the platform, ensuring its smooth
functioning and delivering high levels of customer service," the
Goldman spokesman said.
On Monday, the firm drew thousands of new accounts, or roughly
four times more than GE Capital had signed up on any day since its
launch, people familiar with the product said. They acknowledged
that the site may have slowed as traffic surged, but didn't blame
technical glitches. The firm has taken steps to handle more traffic
on the site, and into its call center, the people said.
Write to Justin Baer at justin.baer@wsj.com
(END) Dow Jones Newswires
April 27, 2016 09:45 ET (13:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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