Goldman Sachs May Open Online Bank

Goldman Sachs announced it apparently weighing opening an internet bank, according to the Wall Street Journal.

Goldman Sachs’ reported plans to open an internet bank is evidence that the bank's current business model will no longer work, but it also gives some insight as to how Goldman will define itself going forward.  As a bank holding company, Goldman may chose the internet as its means to attract capital from depositors, rather than traditional brick and mortar operations.

Goldman already has about $20 billion in deposits, which are held by its bank subsidiaries. Attracting more deposits, typically a low-margin business, will give Goldman a more-stable funding base amid tumultuous market conditions.  Moreover, building a viable online banking business fits with Goldman's wider push to diversify itself. 

Investors today cheered the WSJ article, driving ticker GS higher.

Depositors will hopefully be able to cheer the launch of another competitive online bank, driven by a company that has always strived to compete and compete hard.

See the best online savings rates here.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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