Goldman Sachs Online Bank?

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There have been news reports that Goldman Sachs, which recently became a bank holding company, might be considering opening an online bank as a means to generate deposits. Yesterday, Marketplace did a story about the report and here were some interesting quotes (and you should’ve heard these two guys too):

HOWARD DAVIDOWITZ (retail consultant in New York): This is a company that deals at the highest levels with America’s largest corporations, in the most sensitive sorts of deals, with the wealthiest people in the world. I don’t see how this enhances their brand.

JON OGG (investment advisor): If they want to do that, then they might as well start selling stamps online too.

I loved how these two guys seemed to look down at people who use online banks as somehow beneath them. I’ll take my 100% safe, government guaranteed high yield savings account thank you very much.

There was one quote that I did agree with:

RICHARD SPEER: There’s no shortage of Internet banking offerings. In general, most of those have been very successful in attracting high-rate deposits. They have not been successful in building relationships.

There are a lot of online banks and there isn’t much relationship building going on. I’m going to send my deposits to whichever bank will offer me the highest rates. However, I’d argue that I have no relationship with Bank of America, the bank that I have my checking account with, either. I’d also say that outside of my business checking accounts with M&T Bank, I’ve never had a relationship with any bank I’ve done business with.

Speer is right, if they want deposits, they’ll have to pony up a good interest rate.

{ 2 comments, please add your thoughts now! }

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2 Responses to “Goldman Sachs Online Bank?”

  1. I would have to agree with Mr. Davidowitz and Mr. Ogg. Goldman Sach has build a successful business on its ability to cater to high-end clientele. That being said, I feel the comments were not meant to be taken as a knock against people that use online banks, but rather as a commentary on the desperation that Goldman appears to be showing by branching out into a market in which it is unfamiliar with.

    Mr. Speers’ comments corroborate this viewpoint, since Goldman is a relationship-based business, whereby all of their clients have a close relationship with their individual brokers. This is evidenced even further by the fact that Goldman does not offer any kind of self-service options; it is a full-service broker/wealth-management firm which is what high-net-worth clients desire. Personally I don’t see the point in their new plans, but at the same time there must be some sort of benefit for them to go that route.

  2. Juan says:

    Maybe I’m an outlier (or just young, at 25), but I’ve developed a strong relationship with my online bank – Schwab. I hated the bank I grew up with – Chevy Chase – they’d charge me for everything, had me maintain annoying balances… Schwab’s investor checking account has no fees, a good interest rate, and no minimum, and I plan on staying with them for life (or until they change it). I also ended up opening my first Roth IRA with them.

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