Goldman Sachs Expands into UK Transaction Banking Market
(22 June 2021 – Europe) Goldman Sachs has announced it will start offering transaction banking services in the UK this week, as the Bank continues its drive to diversify beyond its dominant trading and advisory businesses.
It is the first international expansion of the division after it opened last year in the US. Goldman says the transaction bank, which offers services such as cash management and treasury to businesses, has already won 250 clients and $35bn in deposits, putting it ahead of schedule on a five-year plan to attract $50bn of client money and win $1bn of new revenue, according to the FT.
Chief executive David Solomon has made it a priority to generate more stable and predictable revenues from commercial banking, to offset the volatility of the trading businesses.
Goldman faces a tough challenge to break into a crowded sector. It lacks the huge global reach of top-10 incumbents such as Citigroup, JPMorgan Chase, Deutsche Bank and HSBC, which share roughly $26bn in annual revenue from global cash management.
However, Goldman believes it can poach clients with a new technology platform — “TxB” — which can open accounts in minutes rather than months, the bank said, and has a sleek, easy to use customer interface.
The Bank also hopes to distinguish itself from rivals by running an open technology platform and partnering with fintechs, such as its treasury services deal with Stripe in the US.
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