Goldman Sachs' upstart digital consumer bank, Marcus by Goldman Sachs, will help boost the reputation of its parent company, one of its leaders told Yahoo Finance recently.
The financial services platform that caters to younger, technology-savvy consumers made its debut three years ago. It’s named after the bank's founder, Marcus Goldman, and is described by the bank as "a startup within a 150-year old firm.” This summer, Marcus received a J.D. Power award for U.S. personal loan satisfaction.
It underscored what a top Goldman executive described as clients rewarding “consumer products that they like...[and] of course, we are creating a business that will be financially accretive to Goldman Sachs, but over time it will be reputationally accretive to Goldman Sachs,” Omer Ismail, Goldman’s head of U.S. consumer business, told Yahoo Finance in a recent interview.
"Consumers that do business with Marcus by Goldman Sachs have an even higher favorability of Goldman Sachs, the parent brand, than they did before," Ismail said. "We're really excited about what we are doing and the benefit that Goldman Sachs has brought to the business."
Traditionally, Goldman's clients had included corporations, financial institutions, governments, and high-net-worth individuals, but not Main Street consumers.
During the 2008 financial crisis, Goldman was required to convert from a broker-dealer to a bank holding company, to gain access to the Federal Reserve's discount window, a source of liquidity. In that time, internal discussions began on how to grow the consumer side of the business— which resulted in the formation of Marcus.
The online bank currently offers its savings account customers an annual percentage yield (APY) of 1.9%, and customers can open an account for as little as $1. They can also get access to fixed-rate, no-fee loans of up to $40,000.
To date, Marcus has over 4 million customers, and it's given out north of $5 billion in consumer loans and accumulated close to $55 billion in deposits.
More recently, Marcus partnered with Apple for Apple Card, a digital and physical credit card that launched this summer.
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.