Ainsley Harris reported in Fast Company today that Goldman Sachs is acquiring the employees who built Final, a credit card startup based in Oakland. Final offered a unique kind of credit card, one that would create a different virtual card number for every merchant, thereby reducing the risk of credit card fraud. The company announced in December that they were shutting down.
According to Fast Company:
Goldman gains about a dozen engineers and product managers with experience building a consumer finance product from scratch. When they arrive at Goldman in the spring, they will join a growing roster of consumer-oriented employees, all part of the bank’s new Consumer and Commercial Banking division.
It has been a busy couple of years for Goldman Sachs when it comes to their consumer facing business. This latest deal follows a long list of acquisitions for Goldman recently:
- Acquisition of GE Capital Bank – this jumpstarted GS Bank giving it a huge deposit base.
- Acquisition of Honest Dollar – the digital retirement savings app was acquired in March 2016.
- Launch of Marcus with debt consolidation loans.
- Acquisition of Genesis Capital – not really consumer facing but could add a real estate development arm to the bank.
- Bond Street – employees of the online small business lender moved to Goldman Sachs.
- Addition of home improvement loans to the Marcus offerings.
Marcus to Offer a Full Suite of Banking Products?
It isn’t much of a stretch now to think that Marcus is at least considering launching a credit card. Judging by this list above they are clearly looking at several different areas to grow their bank. They now have expertise in all three verticals: consumer lending, small business lending and real estate. With the addition of the employees from Final they have expertise in building a new credit card business from scratch.
Goldman has made it clear that GS Bank (soon to be called Marcus Bank) is a major initiative for the company and they have gone on the record as saying that they expect more revenue to come from lending than trading activity by 2020. Given this commitment it would only make sense that they would offer a full suite of banking products for their customers. A logical step in that journey would be to add a credit card to their offerings at some point.
Maybe this is the prototype for a 21st century bank. Acquire a large deposit base and then create or acquire various businesses to put this money to work. When you have deep pockets, like Goldman has, you don’t need to rely on outside sources of capital to get your business going. To a large extent they are in control of their own destiny and if they continue to execute well I expect they will be very successful.