Goldman Sachs is scaring competitors in the U.K. with its recently-launched savings account that gives savers a bigger return.
Reuters, citing one of the U.K. banks, reported banks are seeing an increase in customers switching to Goldman Sachs. Others, according to Reuters, have rolled out new accounts or increased the rates they pay in an attempt to stop Goldman Sachs’ Marcus bank from stealing even more market share. Marcus launched a savings account at the end of September that offers a 1.5 percent rate, higher than the 1 percent or less payout savers in the U.K. had become accustomed to. Reuters noted that an analysis from Google shows searches for “savings account” reached a five-year high in the U.K. the week after Marcus launched in the country. “Yes, we are worried about Marcus, we have seen significant outflows from our savings products — although I question if they can keep growing at that speed,” a senior executive at one of Britain’s biggest lenders told Reuters. Marcus managing director Des McDaid told Reuters it signed up 100,000 customers since launching in the U.K. The aim is to amass deposits to fund other activities at Marcus, noted the report.
Marcus isn’t the only one in the U.K. offering better rates on savings accounts. Reuters pointed to Royal Bank of Scotland and Nottingham Building Society, which both matched Marcus following on the heels of its entrance into the U.K. market. Rival banks, however, aren’t feeling the same threat that they do from Marcus. After all, Marcus is backed by Goldman Sachs and all its might brings. “We worry more about firms who start to play that already have capital … big, meaty players that can stay the course are more concerning than what’s going on in a garage in Shoreditch,” the senior executive told Reuters. The executive was referring to the digital-only banks including Monzo, Starling and Tandem that have blasted on the scenes in the U.K. They have brought on hundreds of thousands of customers but haven’t been able to lodge profits.