Goldman scales back retail business

Goldman Sachs has announced a revamp of its operating segments which will see a reduction from four divisions to three – Asset & Wealth Management, Global Banking & Markets and Platform Solutions. The US bank is bringing asset and wealth management together again after separating them in 2019.

The bank is also pulling back from retail banking and has announced that the technology underpinning its consumer finance unit Marcus will now be embedded into the unified asset and wealth management division ‘given the growing convergence of wealth and consumer banking’.

We are excited about the role that asset and wealth management will play in our forward growth plans - David Solomon, CEO

‘Changes will further strengthen our core businesses accelerate our ability to scale the growth platforms and improve efficiency,’ said CEO David Solomon during the presentation of Goldman’s fourth quarter results. ‘We are excited about the role that asset and wealth management will play in our forward growth plans across asset and wealth management. We are operating a fully scaled and integrated franchise providing advice, solution and solutions and execution for institutions and individuals across both public and private markets.’

The US bank will also create a new segment called platform solutions that will consolidate its fintech platforms from across the firm, including transaction banking, consumer partnerships, and loan origination fintech GreenSky which was acquired in 2021.

‘This segment will enhance our focus on building platforms that deliver digital financial services capabilities to corporate and institutional clients,’ said Solomon (right).

Running these businesses together will allow Goldman to drive towards its US$10 million and US$2 billion management fee targets.

Solomon said the bank will continue to bolster its position as a market maker and risk intermediary for in markets across the globe and leverage the synergies across global markets and investment banking to meet clients demands.

‘Synergies across these businesses from advice, financing risk distribution and hedging allows us to deliver differentiated solutions to our clients,’ he said.

Visual structuring

The announcement comes on the heels of the launch of Visual Structuring, a new pre-trade analytics tool aimed at helping institutional clients to streamline workflows for options analysis.

Offered via Goldman Sachs’ Marquee platform, the new functionality offers ‘a visual, dynamic, and intuitive way to discover derivatives prices’.

The tool which supports a wide range of option structures, combines all the information that traders need in option price discovery into a single chart view that is easily shareable. Starting with FX options, Visual Structuring provides a mobile-first way to quickly price variations, assess scenarios, run back-testing analysis, and collaborate with colleagues wherever they are.

According to the US bank, much of the historical focus of technology providers to the buy-side has been on optimising the point of execution.

However, most of a trader’s time is spent during the ideation process - pricing different trade variations, assessing scenarios and back-testing to determine historical performance of a strategy, monitoring of current positions and considering restructures or hedges.

‘Visual Structuring aims to create a new paradigm in options trade idea generation; a new language of derivatives trading,’ said Chris Churchman (pictured), head of Goldman Sachs Marquee. ‘Instead of spreadsheets, emails and chat, we wanted to build a mobile-first analytics and collaboration platform that revolutionises the way that people think about options.’

SRP data shows that J.P. Morgan took over Goldman as the number one issuer group in the US retail market in the first nine months of 2022.

The US bank has more than 4,450 live tranche products worth US$15.9 billion and almost 55,000 flow/leverage products with US$4.4 billion outstanding.