Wall Street titan Goldman Sachs set to roll out its own retail bank Marcus in UK
Goldman Sachs’s new consumer bank aims to lure savers with an attractive 1.5% interest rate before the end of September. Currently the average offered by competitors sits at 0.55%.
The idea of offering the highest interest rate in the UK is to entice savers to discover the first international retail expansion by the Wall Street giant, better known as an investment bank specialising in trading, and mergers and acquisitions.
Marcus – named after Marcus Goldman, one of the bank’s founders – became available to Goldman’s 6,000 UK-based staff last week, but is due for a national rollout to the rest of the population “in the coming weeks”. An internal memo to Goldman staff says the bank wants “feedback before officially going to market”.
Marcus launched in the US two years ago and since then it has lent US$3 billion to its American customers, while accumulating more than US$20 billion in deposits.
According to the Financial Times, Goldman is planning further expansion of Marcus into Germany and then other European countries. The plan is for the bank to increase revenues by US$5 billion between now and 2020. According to Moneyfacts, a 1.5% rate puts Marcus ahead of the current highest-yielding instant-access savings account available to UK customers by nine basis points. However, the bank has cautioned that this rate could be subject to changes “depending on market conditions”.
When the rollout occurs, Marcus will begin by offering online-only “easy-access” savings accounts. The plan is to introduce lending products next year. Marcus also intends to start offering mortgages as well as current accounts, though there are apparently no plans to have bricks-and-mortar branches. Marcus has recruited around 150 British employees, who are being led by Des McDaid, who switched from TSB in 2017.
New technology has driven the new digitally-focused banks to launch into the UK market with a view to shaking the dominance of the big five – Barclays, HSBC, Lloyds, Royal Bank of Scotland, along with Santander. In the past two years, the number of financial operators offering easy-access savings accounts has increased by 10%.
Savers should welcome the Marcus move because increasing competition will add to the pressure on the UK’s largest lenders to follow suit. Launching Marcus in the UK is another sign of Goldman Sachs flexing its muscles with new ventures. As we have reported, the investment giant is also actively considering offering custodial services to cryptocurrency funds.
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Picture: Goldman Sachs/Marcus