Much has changed at Goldman Sachs. In September, the 139-year-old investment bank became a Fed-regulated entity, and, just like that, Goldman is now the fourth-largest bank holding company in the nation.
One thing not likely to change is Goldman's appetite for technological innovation, led by Gary Schermerhorn, CIO and co-COO of the technology division. Whether developing proprietary trading systems or investing in bleeding-edge technology companies, the Wall Street giant puts its money where its mouth is to ensure results for the institution.
The past 12 months has seen Goldman Sachs make a $30 million investment into SAP consultancy BackOffice Associates; $23 million investment in social networking site LinkedIn Corp.; lead a $12 million investment into systems management company Nimsoft and help to bail out faltering MoneyGram. And it's casting its innovation net far and wide, taking a 10 percent stake in British spread-betting firm CMC Markets.
That's just what's happened recently. Its 2007 investments in innovation have had a pronounced effect on the company this year, including the launch of Goldman's private electronic trading system GS TRuE, which was later mimicked by a consortium of banks with OPUS-5, and the millions it pumped into compliance leader Perimeter eSecurity. Goldman also bought into management firm Hudson Street Services and Liquid Machines, a leader in enterprise rights management.
The investment in Liquid Machines has enabled Goldman to control who has access to critical documents throughout the workflow process and to monitor and prevent unauthorized attempts to manipulate protected data. It's no wonder, then, that Goldman chief information risk officer Philip Venables was recognized this year by RSA for excellence in the field of information security. Venables, an outspoken industry leader, is credited by RSA executives with leading a group that succeeded with a "full-on data protection, auditing and compliance initiative" and expanded "information protection strategy to ensure that it would travel with the information itself, not just be applied to the containers of information."
Venables's success is just one example of the Goldman touch. Schermerhorn, who was unavailable for comment at press time, is joined by colleagues in what many consider to be the most robust technology organization in financial services. The company is a leader in the intellectual property arena, with more than 40 patents, including a fuel-incentive commodity hedging strategy that Chrysler licensed for its "Let's Refuel America" program. John Squires, the chief IP counsel for Goldman, told BTN earlier this year that Goldman views the patent office as an open market that drives innovation. "Patents are becoming a little bit more important and relevant because there's been a decreasing footprint, or availability of tracing protection, given how much the Internet has grown," he said. But don't expect that to stop Goldman anytime soon.