Marcus by Goldman Sachs

Five years on from the 2008 financial crisis, Goldman Sachs remained wounded. Revenues at the global investment bank had stagnated below pre-crisis levels, and the firm had yet to rebound from a substantial decline in securities-trading revenues. Marcus by Goldman Sachs was one response—an effort that operated as a start-up but was sponsored by senior Goldman executives—to grow the firm’s revenues by entering consumer banking with digital-only offerings. The move marked a dramatic cultural as well as product shift: the 150-year-old institution historically served only businesses and the wealthiest of individuals. In 2016, Marcus launched unsecured personal loans for the mass market; it rolled out high-yield deposits in 2017 and a credit card in partnership with Apple in 2019. By autumn of that year, Marcus had $5 billion in loans outstanding and $55 billion in deposits. It also faced a dilemma—ceaseless and rapid expansion had strained its people and infrastructure, yet Goldman expected Marcus to generate $1 billion in revenues in 2020. What now was the better bet, to pause to allow performance to catch up with growth or to seize the additional opportunities that beckoned for Marcus to diversify into consumer finance products?