After my presentation last week, I thought it would be a good idea to expand a bit on the other fintech platforms that Goldman Sachs’ is implementing, which I did not get to in my presentation. As I said in my presentation, GS is at the forefront of innovation in this area and are really working towards having a great digital product for all customers to use. With that being said, I will be focusing on their bond sales application and their lending app, both of which are becoming much more important and popular in their digital business.
Marcus, named after the founder of Goldman Sachs, is the consumer lending application for the company. Through Marcus, you can take out personal loans and create a savings account, while incurring much lower rates on those loans than other personal loan financiers. This is because the bigger banks (such as Goldman and JP Morgan) can undercut typical loan rates due to their larger influxes of capital and the large amounts they tend to borrow anyway. This has been very popular for banks in general to start to expanding into consumer lending due to regulations in both trading and lending alike.
Loans Range from $3,500-$40,000 and the online savings accounts have built in saving goal settings for you to customize. This application is also heavily marketing to those with credit card debt. As of December 2017, Marcus had lent out over $2 Billion dollars to consumers and Goldman is anticipating that it will be its fasting growing sector/app, and bring in a substantial amount of revenue ($1 Billion in the next 3 years.) This is on par with their trading operations revenue over a similar time frame, so it’s clearly a sector that will be growing.
Simon is built for those selling bonds through Goldman Sachs. SIMON stands for Structured Investment Marketplace and Online Network. It is another online option for clients, rather than calling bond traders and analysts to help them work through complex problems, they can use the app to create and work through tools that can help them analyze risk themselves. Most define the assets that SIMON works with as “structured products,” which are assets that essentially allow traders and customers to have highly customized risk-return objectives for their trade or investment. Before this app, you would have to call a structured products expert and discuss on the phone. Through SIMON, you can analyze and execute trades all on your own.
In my presentation, I showed how this is also integrated into the Marquee platform as a whole, while Marcus is in its own sphere of personal savings and lending. This program will be particularly disruptive to structured products and bond experts, who were previously needed by customers to understand what was even offered to them. Now, they can look, learn, and trade all on their own through the app, cutting out some of the needs for those experts, especially for trades on smaller scales.
This blog is a bit more technically than my other blogs and this topic was one that I did not know a lot about. I am a marketing major and have no intention of working in finance after graduation, but thought this was an interesting industry to look at with digital disruption, not only because of the traditional, old school nature of the industry but also because money seems to be (obviously) a driving factor for digital change and disruption and banks tend to be at the forefront of that (duh). Goldman has already done big research into crypto currencies and the like so this is an interesting topic to look as as the industry structure changes and shapes the future of work in finance.