Staying in one’s lane

The new year has opened with a number of reassessments of business priorities decided prior to the rise in rates. The era of free money is over. Also, TINA, is the belief that There Is No Alternative kinds of novel investment decisions.

An example of a foray into a new lane is told in an article, Paradise Lost, Why Goldman’s Consumer Ambitions Failed.

The story in brief: In 2014, as a means to further its long-term growth objectives and participate in the emerging fintech sector, Goldman’s leaders decided to transform the Wall Street investment bank into a Main Street player. Despite its success in corporate finance, advising heads of state, and serving the uber-wealthy, it had no consumer finance presence.

In 2016, it launched Marcus (the first name of Goldman’s founder) and quickly attracted $50 billion in online deposits and an emerging consumer lending business. The distinct brand separated the firm from any lingering reputation fallout from the 2008-2010 financial crisis.  It also positioned the effort, if successful, to be spun off as a separate fintech business, like Chime.

 

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