Eighteen months after launching its online lending platform, Goldman Sachs is beginning to reveal the wide scope of its ambitions in consumer banking.

The investment banking heavyweight is moving speedily to build a broad-based retail franchise that will eventually offer a whole range of consumer products and services. Goldman has mentioned credit cards and wealth management products as specific possibilities, while also making clear that there is likely more to come.

The company’s latest move was its acquisition last week of Clarity Money, the maker of a mobile app from which numerous products will be offered under the Marcus by Goldman Sachs brand.

In recent months, Goldman has also hired teams of employees from the credit card startup Final and the online small-business lender Bond Street. And it has integrated its online deposit franchise — which is offering some of the most attractive rates in the U.S. market today — under the Marcus umbrella.

Harit Talwar, head of Marcus, Goldman Sachs' online lending business.
Harit Talwar, head of Goldman's Marcus unit.

During the bank’s first-quarter earnings call on Tuesday, Chief Financial Officer Marty Chavez dispensed with the caution that has characterized Goldman’s public comments about its long-term plans for Marcus.

“We’re looking at a very large number of opportunities,” Chavez said. “So we’re evaluating credit cards, as you’ve heard us say. We’re looking at wealth management. We’re looking at retirement products. We’re looking at personal finance. And we’re looking at the adjacencies in and among our various businesses as we build all these things out.”

Goldman’s growth strategy in consumer banking is not even confined to the United States market. The firm plans to start offering an online savings product in the U.K. during the second half of this year.

The acquisition of Clarity Money, which has signed up more than a million users in a little over a year, fills a key gap in Goldman’s push to build a digital retail bank from scratch.

Goldman does not currently offer a mobile app to its retail customers, though it had reportedly been building one internally. The free app from Clarity Money will fill that void. Consumers currently use the app to cancel unwanted monthly subscriptions, choose a credit card and maintain a household budget.

The app will give Goldman Sachs the opportunity to establish deeper relationships with its online depositors and borrowers, a strategy that is being pursued by numerous digital lenders.

Harit Talwar, the head of Marcus, said that the mobile app will make the bank’s retail customers, many of whom come to the platform to refinance existing credit card debt, more likely to stick with Goldman Sachs. He added that the app gives the bank the opportunity to offer more consumer products, and he downplayed the short-term potential for making money from the consumer data that Goldman has acquired.

“I think we want to be very clear that this is a long-term strategic acquisition,” Talwar said Monday during a conference call with reporters. “This is not trying to be shortsighted in terms of monetization.”

Since its launch in October 2016, Marcus has originated approximately $3 billion in consumer loans, according to Goldman. Its online deposit franchise surpassed $20 billion in retail deposits last month.

“Our long-term vision for Marcus is to create the leading platform for millions of consumers to take control of their financial lives, offering personalized products to save and borrow that are simple, transparent and provide value to customers,” Chavez said Tuesday.

Goldman’s push into retail banking was born out of a quandary about what to do with the banking license that it obtained in the fall of 2008, when it received federal bailout funds at the height of the financial crisis.

The bank’s lack of history in consumer banking gave it the opportunity to build its technological architecture from the ground up.

Still, many Americans are not yet ready for a full-fledged digital bank. A recent study by J.D. Power found that overall customer satisfaction is higher among customers who visited a bank branch in the past 12 months. Although mobile banking is becoming more popular, even millennials are averaging almost one branch visit per month, according to the study.

Wei Ke, who heads the financial services practice at the consulting firm Simon Kucher, said that the jury is still out on whether digital-only banks can achieve mass scale.

“People still want to go to branches from time to time,” he said.

Kevin Wack

Kevin Wack

Kevin Wack is a California-based reporter for American Banker who covers the U.S. consumer finance industry.