Can Amazon Help Goldman Sachs Get its Groove Back?

According to reporting in both the Financial Times and on CNBC, Amazon and Goldman Sachs are discussing a partnership that would enable the investment bank to offer loans directly to merchants via Amazon’s platform. Goldman Sachs has yet to comment on the report.

The collaboration could begin as soon as March. Amazon has not commented on the report either, other than to affirm that lending is one of the services it provides to its merchant partners. In a statement, the company praised its merchants for “account(ing) for more than half of everything sold in Amazon’s stores.”

Goldman’s potential alliance with Amazon follows news of the investment bank’s 2019 partnership with Apple and Mastercard as part of the Apple Card launch. It also comes as the firm makes a number of moves that suggest it is serious about financial technology. Financial News London noted that in addition to partnership changes in recent years that have led to fewer traders and more investment bankers, Goldman Sachs is also “clearing out space for leaders in the new consumer business (it) is building.” The article highlights a pair of new Goldman Sachs partners – the founder of PFM app Clarity, which Goldman acquired in 2018, and the CEO of United Capital, a recent wealth management acquisition – as evidence of this trend.

Another example of Goldman Sachs interest in fintech, of course, is its digital bank offering, Marcus, launched in 2016. At the company’s first investor day last week, Goldman affirmed its commitment to Marcus, pledging to add a digital wealth management component and a checking account to the platform in 2021. Goldman also unveiled a new mobile Marcus app that enables accountholders to check balances, schedule transfers, and make loan payments. As reported in the company’s fourth quarter results, Marcus has $60 billion in consumer deposits.

A possible partnership with Amazon is not the only fintech headline Goldman Sachs has picked up this week. Yahoo Finance is reporting that Goldman may seek to build its own financial services cloud platform as part of a “transformational, multi-decade effort.” The report quotes Goldman Sachs co-Chief Information Officer Marco Argenti who suggested that the company would leverage it own “core technology services” for external uses in the same way that Amazon has with its Amazon Web Services platform, and potentially provide a significant new revenue stream.

The actual scope of Goldman’s initiative is what has most observers and analysts buzzing. Does the company’s stated “transformational, multi-decade effort” essentially mean Goldman-Sachs-as-a-Service? Or a full-fledged AWS competitor? Bank of America and IBM announced their intention to develop a financial services public cloud platform last fall. It will be interesting to see if Goldman’s ambition is to meet, or exceed, that goal.