As we reported in June of this year, we will likely see Goldman Sachs enter the online lending market with their new platform next year. There haven’t been many details surrounding their plans, but a new article out of Bloomberg last week reports that Goldman is seeking employees from Lending Club and Prosper, the top two marketplace lenders in the United States. According to the Bloomberg article, Goldman has been reaching out to employees in San Francisco and New York to join their credit, marketing and engineering teams. A recent article in Reuters also stated that Goldman was ramping up staff for their consumer lending business.
While it is hard to say whether Goldman is directly trying to poach employees from Lending Club and Prosper I was able to find two employees of Goldman Sachs who both worked previously at Lending Club and have been at Goldman Sachs for just 3 months. The point is that Goldman is serious about starting their own platform and they are doing it themselves. It makes sense to hire experts from the two most successful marketplace lending companies in the US.
Last week Peter was at the American Banker conference in New York where he asked Scott Sanborn, COO of Lending Club about Goldman Sachs getting involved in online lending. This is what Scott said:
Clearly some banks are going to want to build their own operation. We are looking forward to competing with Goldman Sachs on customer experience.
Scott went on to say that plenty of large banks are rumored to be starting their own operation so clearly there is going to be some lively competition here. And based on what he said, Lending Club is ready to take on these new competitors. The bottom line is that Lending Club, and Prosper for that matter, has many years head start on these new entrants and with that a wealth of marketing history about what works and doesn’t work.
Not only that but banks don’t exactly have a history of excellence when it comes to user experience or customer satisfaction. Their Net Promoter Score is something that Lending Club executives often talk about and they always compare very favorably with the banks here. As Scott points out, customer experience is going to be key differentiator and it will be interesting to see whether a big bank can build a compelling customer experience that 21st century consumers demand.
Regardless, it seems that we will be seeing large banks like Goldman Sachs create an online lending business in the near future. It will be fascinating to see how this shakes out as lending startups tend to focus on the tech in fintech and banks have long been known for their inability to innovate. It is hard to imagine at this point a bank leading in fintech, but it’s clear that large financial institutions are getting involved, Goldman Sachs just happens to be one of the first.
This content was created by one of our content team members. You can pitch a news story — including guest contributor requests — using our story portal.