Goldman Sachs Consumer Banking Grows

Issue 105

Goldman Sachs Group announced a new credit card with General Motors adding another Main Street brand to its consumer business.  Since Goldman transitioned from an investment bank into a full-service financial institution with a consumer bank facing business, Goldman has been quietly pursuing a unique customer acquisition strategy.  Partnering directly with America’s largest brands in an entirely new way.

The agreement is Goldman’s second major co-brand deal, following the launch of a high-profile credit card with Apple in 2019. Banks use such partnerships with name-brand companies to attract their customers as borrowers.

Goldman, which emerged as the front-runner for the GM partnership in 2020, is taking over the card business from Capital One Financial, which has been offloading some of its smaller portfolios.

“The average person in the U.S. spends an hour in their car. This is just something they engage with all the time,” Stephanie Cohen, who helps lead Goldman’s consumer and wealth business, said in an interview. “People want to experience financial services in ecosystems that they love and that they trust.”

The bank’s consumer line, marketed as Marcus, has also paired up with the likes of Walmart to offer small-business loans, and finances vacation purchases with JetBlue Airways New York-based Goldman also agreed to buy GreenSky, adding a company that offers payment plans to customers with home-improvement projects or health-care needs.

In an October earnings call, Goldman Chief Executive Officer David Solomon said that in addition to adding other partnerships, the bank also has “the opportunity for a proprietary card that’s in development.” Such a standalone card would be more similar to popular offerings from the country’s consumer-banking giants.

Source: Bloomberg