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Is Goldman Sachs brewing a Mega Strategy?

Here are the pieces of the puzzle that was built meticulously over the last decade.

With more lay-off news coming in, this time around from Wall Street, inorganic growth strategies are now being questioned.

One such acquire and pivot strategy, part of a larger growth moves by one of the largest investment banks in the world could be in hot waters.

Goldman Sachs ambitious direct-to-consumer business model – Marcus, created to compete with the likes of J.P Morgan’s Chase and Citi, now merged with the wealth and asset management division, has raised questions on its retail banking strategy.

Notably, the bank acquired more than 22+ companies over the last couple of years, to largely build and complement its consumer banking segments. Some of these acquisitions include:

1/ NextCapital - a fintech company that provides automated advice to corporate retirement plan participants

2/ GreenSky® - the world’s largest fintech platform for home improvement consumer loan originations

3/ United Capital and by extension FinLife CX – the former a registered investment advisor with $25 billion AUM and the later a digital platform that helps independent advisors grow their business and enhance relationships with their clients.

4/ Clarity Money - an app that uses machine learning to help consumers better manage their personal finances and offer actionable insights.

While the bank aimed to diversify its revenue streams and strengthen its balance sheet with this strategy, all things point to another strategy pivot with “platform play” lining-up beside the wealth & asset management and trading & investment banking divisions.

Maybe a better approach to help GS take a step forward would be

1/ To understand how existing and acquired businesses complement each other

2/ Knowledge of the possible cross-selling opportunities within platform ecosystem

3/ Hard lessons learnt from its’ Marcus venture.

What are your thoughts on this? Leave a comment.


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