Goldman Sachs will launch an app for UK users of its digital bank Marcus. This app has a main feature to offer automated investment management to clients in the country. This will come into act by the first quarter of the next year.
Des McDaid, the head of Marcus UK said that since launching a savings account in 2018, the U.S. bank has attracted just over $30 billion in UK deposits. This accounts for 30% of Marcus’s deposits globally. He added that they are pivoting more into an investment and wealth provider rather than a full-service digital bank.
Des also said that they have been delighted with how fast and how quickly they have grown. The challenge now is how do they repeat the formula they used for savings to offer their customers an accessible platform for investing products. Goldman is shifting the focus of Marcus UK to wealth management. This demand retail deposits totalling more than 25 billion pounds ($35 billion) be ring-fenced. Ring-fencing would require Marcus UK to become a separate legal entity.
For diversifying its revenue and funding sources by offering savings accounts and personal loans to retail customers, Goldman Sachs opened Marcus in the United States in 2016. Its range has been expanding, in areas such as checking accounts and a credit card with Apple Inc. In United States, the bank also launched Marcus Invest, a robo-adviser that allocates customer funds across managed portfolios made up of exchange-traded funds for stock and bonds.
When compared to other robo-advisers a customer’s risk tolerance and investment timeline and models developed by the firm’s investment strategy group recommend a conservative, moderate or growth portfolio. Marcus is now in the process of adapting its U.S. product for the UK market. McDaid said that they are building on the U.S. platform but making the back end and regulatory changes that are required to make it work. He also added that their opportunity is strong. And they start with a strong investment base of existing savers looking for an opportunity to do more with their money.
In this pandemic, the deposits in Marcus UK has been surged. It offers 0.4% annual interest on its savings account, down from 1.5% when it launched. McDaid said that the British consumers will be able to access their Marcus accounts through an app as soon as possible. He also stated that the local digital retail banking market was attractive. Rival JPMorgan Chase said in January that it would launch a digital consumer bank in Britain under its Chase brand over the coming months.