Goldman Sachs Launches Digital-First Transaction Banking Portal

Need to Know

• In its latest move to compete in the fintech space, Goldman Sachs has launched a new online banking service for large businesses.
• The service, called, Transaction Banking, is a new digital offering that offers self-serve virtual accounts and rich analytics for corporate accounts.
• In the past year, Goldman Sachs has invested heavily in digital service offerings, such as their consumer-facing Marcus app and MarcusPay tools.
• Earlier this year, Goldman Sachs hired its 10,000 computer engineer as it completes its switch to digital-first.

Analysis

Goldman Sachs has launched an online banking service for large businesses, offering digital-first services such as virtual accounts and predictive analytics. 

As more and more banks turn to digital to compete for big-name clients, Goldman Sachs looks to revolutionize their own services with their newest offering, Transaction Banking. In broad terms, transaction banking is any banking that addresses the normal daily needs of large business and institutional clients.

Goldman Sachs’ definition of Transaction Banking offers self-serve account opening and client onboarding, as well as “API-enabled and fully integrated solutions powered by rich analytics, including liquidity management, virtual accounts, payments, and escrow services.” 

Virtual accounts have been growing in popularity in the last five years due to decreasing dependence on cash. 

“Virtual accounts are a foundational product for us and we’re conscious that awareness and understanding of them is inconsistent,” said Mark Smith, Goldman Sachs’ global head of liquidity products in investment banking. “At their most basic virtual accounts are simply a way of organizing and reporting data within a real bank account.”

And though the banking giant’s top competitors (Bank of America, JPMorgan Chase and Wells Fargo) have been invested in digital banking for some time now, Goldman’s late coming may be to its benefit, given the volume of new research available. 

“We did a lot of research going into this,” said Smith. “We are talking to corporates with revenues of $500 million and above, and one-quarter of them were looking to change something.

“Transaction services is a sticky business, but there is now constant churn and turnover, so we were confident that there was sufficient demand out there for moving away from existing providers.”

Goldman Sachs’ investment in virtual banking is the company’s latest move to compete with leading fintech brands and streamline its service offerings into one easy-to-use digital hub. 

In the past year alone, the banking giant has launched a mobile Marcus app, built out its digital payment offerings, and added over 10,000 developers to its team.