Marcus won’t suffer fate of JPMorgan’s Finn: Goldman exec

Goldman Sachs is not planning to follow JPMorgan Chase's lead and wind down its digital-only bank, a top Goldman executive said Monday.

Omer Ismail, the head of U.S. consumer business for the bank, said its digital brand Marcus is set up differently than JPMorgan's Finn; JPMorgan said last week it would terminate the brand in August. For starters, he said, Goldman doesn't consider it just a digital venture, but a whole new line of business. Unlike at JPMorgan Chase, Goldman has no competing consumer bank in its primary institution.

“In the consumer space we do this from a clean sheet of paper,” Ismail said on the sidelines of a fintech conference hosted by Business Insider. “There are no channel conflicts, no self-cannibalization. We were ready to create something from scratch that our customers are looking for.”

Marcus, which currently has more than 4 million customers and had $30 billion in deposits at the end of 2018, has no origination targets and can adjust its credit model more quickly than a traditional bank in the case of a downturn in the credit cycle, Ismail said.

Marcus strikes a balance, he says, between maintaining some of the main bank's attributes while being digitally savvy. Roughly a third of Marcus' team are Goldman employees, another third are from consumer finance organizations and the rest are tech employees with no prior banking experience.

Marcus represents something different for Goldman, which historically has focused almost exclusively on its investment banking business and has not generally dealt with large volumes of low-ticket customers.

Last October, Marcus announced a wealth management product that would serve consumers, a product that Ismail hopes customers can upgrade to after getting out of debt and building a Marcus savings account.

But even as Marcus has been set up on a different floor and non-Marcus employees have been denied access to it, the digital unit has had an impact on the main institution. A few months after the development of Marcus, Ismail began to see other teams within Goldman follow Marcus' lead in having weekly huddles instead of monthly town halls and start to write on the walls instead of doing traditional PowerPoint presentations.

“There are lessons to be learned about how we develop product and work in agile squads that are applicable to the rest of Goldman,” Ismail said.