Goldman Sachs is seeking to boost its presence in virtual currency, among other areas of payments technology. Financial Times reported on Wednesday (Dec. 9) that the Wall Street behemoth had “applied to patent a virtual currency settlement system” known as SETLcoin. The patent filing is part of the emerging growth of blockchain-as-a-ledger systems that can help offer real-time settlement of trades across a number of securities exchanges.
FT noted that the project is “among dozens that emerge” annually from the Goldman tech group, which houses more than 9,000 engineers and remains among the biggest divisions at the bank.
Goldman has had healthy competition in spending big dollars in a bold way on tech, and the emphasis has been on more cost-effective ways of doing banking. Yet, there have been only a few “hits” in the Goldman Sachs tech pantheon.
Despite the meager portfolio of bank-changing technologies, as the financial publication noted, Goldman has scale that other banking peers do not. The firm will spend between $2.5 billion and $3.2 billion on technology initiatives in 2015 alone, which translates to a high single-digit percentage of sales, a ratio about twice that of other large banks. Such relatively high spending on technology initiatives, both new ones and developing programs, means that cost and time savings will translate into a better system to harness profits in the future.
In an interview with FT, CFO Harvey Schwartz said Goldman’s tech group is there to “play defense” and help navigate through post-crisis regulations — not to mention, what he dubbed as “the ongoing electronification of finance and the constant threat of cyberattacks.” And, in a relatively new development, the firm has been grappling with playing offense against upstart competitors.