Send me real-time posts from this site at my email
Motley Fool

Goldman Sachs Has Software Allowing Any Company to Offer Banking Services

Could so-called "banking as a service" become the hot new product in the financial industry? Ever the risk-taker, Goldman Sachs (NYSE: GS) is betting that the answer is yes. The storied financial services company just released software that effectively provides bolt-on banking products and services to companies that want to offer them to their clients.

In Goldman's words, its software empowers a nonbank enterprise to "Embed business bank account experiences within your own applications."

This type of offering falls under a broader category known as "transaction banking," which essentially means providing the wherewithal for companies to conduct a range of day-to-day transactions to keep their businesses running.

Image source: Getty Images.

Goldman officially launched its transaction banking products and services in June; to date, according to a report from CNBC, $28 billion in deposits have been created by more than 200 clients through these offerings. It wasn't clear how much the company has booked in revenue from the activity.

Citing figures from researcher Coalition, CNBC added that the top 10 transaction-banking specialists -- including big U.S. lenders such as Bank of America and Citigroup -- collectively drew $32 billion from transaction banking in 2019.

In recent times, Goldman has been pushing out of its original core competency of investment banking into other areas of finance. It is particularly eager to get into more-traditional and historically less-risky financial segments such as consumer banking.

In the CNBC article, Goldman's global head of transaction banking Hari Moorthy was quoted as saying of the new software: "There's this butterfly effect that will kick in after we roll this out. It allows us to acquire clients of our clients, allows us to seamlessly be integrated in the fabric of banking and corporates."

10 stocks we like better than Goldman Sachs
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Goldman Sachs wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2020

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue