Gold­man Sachs plans dig­i­tal lend­ing for con­sumers; moves from blue chips

The China Post - - WORLD BUSINESS -

Gold­man Sachs in­tends to launch a dig­i­tal bank­ing di­vi­sion to lend to small busi­nesses and con­sumers, broad­en­ing its clien­tele from its blue- chip base.

The move r eflects t he 146- year- old Wall Street gi­ant’s belief that new tech­nol­ogy al­lows it to in­crease its lend­ing pool with­out be­ing weighed down with branches and other tra­di­tional costs as­so­ci­ated with lend­ing to smaller par­ties.

“The tra­di­tional means by which fi­nan­cial ser­vices are de­liv­ered to con­sumers and small busi­nesses is be­ing fun­damen- tally re- shaped by ad­vances in tech­nol­ogy, ma­tu­rity of dig­i­tal chan­nels, use of data and an­a­lyt­ics and a fo­cus on cus­tomer ex­pe­ri­ence,” the bank said in a May in­ter­nal memo re­viewed by AFP.

“To­day, we see an op­por­tu­nity to lever­age our com­pe­ten­cies in tech­nol­ogy and risk man­age­ment to cap­ture this op­por­tu­nity at ac­cre­tive re­turns and with­out the bur­dens of legacy costs and fixed in­fra­struc­ture.

“In this way, GS Bank can ef­fec­tively ex­tend cap­i­tal to this im­por­tant seg­ment of the mar­ket and econ­omy.”

The fledg­ling ini­tia­tive

fol- lows the growth of dig­i­tally ori­ented fi­nanc­ing com­pa­nies such as Lend­ingClub and PayPal, which pro­vide loans to small busi­nesses and in­di­vid­u­als.

How­ever, such a ven­ture marks a de­par­ture for Gold­man, which has minted its for­tunes by ad­vis­ing ma­jor com­pa­nies on mega- merg­ers and han­dling fi­nan­cial trades for big- money clients.

Gold­man ap­pointed for­mer Dis­cover Fi­nan­cial Ser­vices ex­ec­u­tive Harit Tal­war to lead the di­vi­sion. Tal­war will be based in New York and work with other bank ex­ec­u­tives on the ven­ture, Gold­man Sachs said.

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