Goldman Sachs could be reorganizing for the fourth time in three years as it rolls up the welcome mat on consumer banking for all and redistributes those products to its already-strong wealth-management business.
The legacy bank sunk billions into its FinTech Marcus, with CEO David Solomon dedicating his time since 2019 to building a full-service digital bank. But after mounting losses, Goldman is considering overhauling its management team to lead a business unit combined with asset management and wealth management, Bloomberg reported on Monday (Oct. 10), citing unnamed executives with insider information.
Related: Goldman Consumer Banking Revenues Grow 25% as Loss Reserves Surge 497%
According to the report, the move shows Goldman’s further distancing from its struggling retail consumer banking dreams and also hints there could be exits from the top, as has happened in the past when leadership is reconfigured.
See also: Goldman Puts Legacy Lenders on Watch With Plan to Offer Digital Checking Accounts
It was just six months ago that Marcus was touting plans for consumer checking geared toward the masses despite cost overruns and missed profits, PYMNTS reported at the time. On its first-quarter earnings call this year, plans for turning Marcus into a thriving retail center were still in place.
“In terms of our aspirations to build the leading global, digital consumer bank, a lot of the pieces to the puzzle are in place at this point,” he said. “Many of those investments have been made.”
Checking, he said, will be an “important piece of the product roadmap for us.”
Read more: Goldman’s Ability to Absorb Losses at Marcus Unit Keeps Neobanks on Edge
The technical issues of incubating a FinTech within a legacy bank ended up proving more expensive and drawn out than expected. Checking accounts will now be offered only to select consumers with money as well as to employees at corporate partners instead of to the masses. The bank’s robo-adviser, Marcus Invest, is also being reserved for elite customers, as are Goldman’s savings accounts, Bloomberg reported.
See: Report: Federal Reserve Reviews Goldman’s Retail Unit, Marcus
Marcus is also dealing with a review from the Federal Reserve over its mounting losses and a probe by the Consumer Financial Protection Bureau into its credit card offering, PYMNTS reported last month.
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