Goldman Sachs is beta testing a robo-advisor among its employees and is within months of publicly offering a digital retail wealth management service.
The robo-advisor is part of Goldman's strategy to make Marcus appealing to young and mass-affluent consumers.Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry with the Banking Briefing.Making good on its year-old promise, the bank is beta testing a robo-advisor among its employees and is within months of publicly offering a digital retail wealth management service, per CNBC.
The robo-advisor is part of Goldman's strategy to make Marcus appealing to young and mass-affluent consumers. The bank will integrate Marcus Invest with its Marcus Insights personal finance management tools, which it made available to noncustomers and across digital platforms in October.An attempt to frame the brand as a go-to for digitally savvy, mobile-first consumers fuels the development of these digital tools. Those are on top of the trendy Apple Card launched in August of last year.
Automated investing is a value-add for mass-affluent consumers, but the firm faces fierce competition. Goldman built Marcus to diversify its business into staid deposit-taking and consumer lending—putting it in a crowded space where it had little expertise. That alone was a gamble, with heavyweights Bank of America and JPMorgan Chase holding the lion's share of consumer deposits; Marcus also had to compete with incumbent online banks like Ally on savings account rates.
Despite the crowded field, wealth management could be a profit play for Goldman. Goldman has lost billions of dollars on Marcus since its 2016 launch, primarily from soured loans. As Goldman's consumer underwriting becomes more effective, it could ultimately make a profit on its consumer banking business. And by pushing into retail wealth management, it enters a relatively stable, fee-based business that the firm had previously only been exposed to through its private bank.
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