By John Reynolds on Tuesday 11 October 2022
Marcus, which launched in the US in 2016 and the UK in 2018, had a slow start in the UK but has gathered momentum over time. But now amid sky-high losses its future appears to be in doubt.
Goldman’s digital consumer bank, which launched in the US in 2016 and 2018 in the UK, is expected to lose more than $1.2bn in 2022, according to the bank’s internal projections.
In 2020, Goldman executives had suggested to investors Marcus would break even in 2022 but it has suffered this year amid rising costs and a fintech market which is broadly struggling.
Goldman's shares, meanwhile, have dropped by more than a fifth this year.
The report says that Goldman CEO David Solomon is considering shifting Marcus’s products into its wealth management business while Marcus’ checking accounts, devised for the masses, will be steered towards affluent clients and employees at corporate partners.
Consumer lending through Marcus will also be reined in while Solomon is also considering combining the firm's asset-management and wealth management businesses under a reconfigured leadership team, a move that would serve to further undermine its consumer business.
But Marcus still intends to welcome customer deposits, which have been a success for the digital bank.
Bloomberg said it gleaned the proposals by talking to executives with knowledge of the plans at Goldman.
Such was the demand for its savings accounts that at one point it stopped new customers from opening them while it launched its long-awaited app in 2021.
In the UK, Marcus only offers savings accounts and most of its expected losses will come in the US where it also offers loans and the bulk of its $100bn of customer deposits sit.
AltFi reached out to Goldman for comment.