Goldman Sachs plans rebranding of online consumer bank

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Last year Goldman Sachs found a warmer, fuzzier way to connect with the U.S. public, and now it’s doubling down on that approach.

Marcus by Goldman Sachs is the brand name for the Wall Street bank’s one-year-old digital consumer-lending business. The name is a reference to Marcus Goldman, who founded the company in 1869.

The new moniker has resonated well enough with the general public that Goldman is planning to adopt the same brand for its digital consumer deposit franchise, which is currently known as GS Bank.

“By the end of the year, the online deposit business ... will be part of the Marcus brand,” Omer Ismail, the chief commercial officer of Marcus, said Friday.

In addition, Goldman is planning to export the Marcus brand to the U.K., where the bank is currently building another online deposit franchise.

Launching an approachable, consumer-facing brand has been part of Goldman’s effort to polish its image, which was tarnished by the financial crisis. In 2010, a Rolling Stone writer memorably dubbed Goldman Sachs “a great vampire squid wrapped around the face of humanity.”

During remarks at a conference in New York, Ismail said Friday that the Marcus brand has provided a boost to the firm’s reputation.

“One of the things that we’ve seen,” he said, “is that folks who engage with the Marcus brand, it actually helps with the favorability of the Goldman brand.”

Marcus, which offers loans of $3,500 to $30,000, mostly to consumers who are looking to refinance their credit card debt at a lower rate, was built in 11 months. In its first year, the platform generated loan volume of $1.7 billion.

Until the last few years, Goldman Sachs did not have any retail banking operations, so it had to build its customer-service operation from scratch.

That operation is based in Salt Lake City and staffed by Goldman employees who focus on answering calls quickly. Following Hurricane Harvey, borrowers who live in affected regions were offered the option of deferring payments for three months.

“Customers want to do things digitally, but debt is something that is very emotional for them,” Ismail said. “If they want to reach someone, they want to reach someone right away.”

Some Wall Street analysts are skeptical about Goldman’s foray into consumer lending, both because the bank has dedicated a lot of resources to a business that is barely a speck on its balance sheet, and also because of concerns that consumer default rates are likely to rise over the next few years.

Ismail responded Friday to both of those concerns.

He said that risk management is a core competency at Goldman Sachs, and noted that the firm has hired experts in consumer credit. “We’re very aware of where we are in the credit cycle,” he said.

Ismail also predicted that over time Marcus will become a meaningful part of Goldman Sachs’ overall business.

“We think that we’ve got to focus on quality. We’ve got to do this right. We don’t want to rush into growth here,” Ismail said. “But the plans are over time for this business to scale and be a contributor to Goldman’s earnings.”

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