Goldman Sachs’ move into consumer lending may seem like a bit of a departure for the investment banking giant. But CEO Lloyd Blankfein says its expertise in fintech makes the business a good fit.
“If you are lending money to 5 million people, it’s a little bit more math, a little bit more algorithmic, a little bit more about digital delivery,” the executive told Cheddar.
“And in this new world that we’ve entered into, to be a good consumer lender, it’s advantageous not to have legacy assets like branches, to have lower costs, and to be able to engage with your client and offer them flexible products digitally, and then to manage that with skills that everybody recognizes we have.”
The company launched “Marcus by Goldman Sachs”, a digital consumer loan platform, in October 2016. Through November, the business had already issued $2 billion in loans.
Blankfein says Goldman Sachs offers an advantage competitors can’t.
“We already have deposit taking where we give a very high interest rate, because you don’t have to pay for branches,” he said. “And the consumer business, where we’re certainly charging people a lot less than what they’re paying on their credit card balances. So it’s good for the consumer, good for Goldman Sachs, and probably good for the country.”
Blankfein says the business will “move the needle for Goldman Sachs.”
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