Retail banking is in large measure about the personal touch. Customers, so the logic goes, want to know that their local branch manager is taking an interest in their personal needs, even if they never actually step foot in a physical bank. It’s a relationship, more than merely a financial transaction.
One wonders how Goldman Sachs will fare selling that line, now that the vampire squid has unexpectedly entered the personal savings market, for the mass market (minimum deposit $1). Goldman and the other I-banks have done a lot to clean up their image since the crash, but they’re never exactly going to be NatWest, are they? That lingering doubt that the wolf of Wall Street might ring you up at 6am to convince you to put your life savings into an exotic derivative asset bundle is going to put a few people off.
On the other hand, of course, savers might find something appealing in the idea that their money is being looked after by one of the world’s most effective financial institutions. A Goldman Sachs credit card could be as desirable as an American Express Black, and indeed the online-only, US savings account from Goldman subsidiary GS Bank (not fooling anyone there) does offer a highly competitive 1.05% interest rate.
One does have to wonder about Goldman’s motives though. The FT reported that the company launched its online retail bank on the back of its acquisition of GE’s $16bn deposit book, but in the scheme of things this is unlikely to represent a major diversification. Who knows though – maybe offering services for the man and woman in the street will help with its public image. Stranger things have happened.