Stephanie Cohen, Global Co-Director of Consumer and Wealth Management at Goldman Sachs, is well aware of where the new robotics advisor the bank launched this week, Invest, fits into its mainstream banking ambitions. .

The Automated Investment Tool, which places clients’ money in exchange-traded funds that match their risk tolerance and investment preferences, is the latest phase in a multi-faceted effort to transform its unit Marcus into a fully-fledged digital bank.

Overall, Marcus’ growth and development is part of a two-pronged technology strategy for Goldman Sachs.

On the one hand, it wants to be the leading digital bank for consumers, providing everything they need for their financial lives through Marcus, who has already amassed $ 97 billion in global deposits and $ 8 billion in card balances and of loans. The unit generated $ 1.21 billion in revenue in 2020.

On the other hand, it is a banking partner as a service for large companies like Apple, Stripe, Amazon and Walmart, allowing them to integrate banking products and services into their offerings.

American Banker asked Cohen to share some of Goldman’s plans to use technology to compete with traditional banks, fintechs, and big tech. Cohen, who was promoted to her current role of chief strategy officer in September, is reportedly a possible successor to CEO David Solomon.

With this new robot advisor, are you taking Marcus by Goldman in a new direction? Would you say that you are expanding Marcus so that he can cover all the financial needs of clients throughout their lives? Would you say Marcus is becoming a more important part of Goldman as a whole?

STEPHANIE COHEN: If you think about what we’re trying to do in the consumer sector, our goal is to create a leading consumer digital banking platform and to do that through two self-reinforcing strategies. The first strategy is our direct-to-consumer market strategy. We started with the loans, and then we saved money. We have [the money management app] Insights, and now we have Invest. Later this year, we plan to do a check. The idea is that we can be your main bank. We can be the digital bank on your phone.

The second part of our strategy is to be a platform: to take our capacities and integrate them into the ecosystems of our partners. The first way we started doing this was with Apple – we launched the Apple Card. We signed an agreement with General Motors to provide them with a common brand credit card as well. But the idea is much broader than that. The idea is to take our banking technology platform that we built and integrate it into other ecosystems in a multi-product way. With Apple, for example, we have the credit card, but we also have the Apple Card monthly installments, which allows you to buy an Apple product and pay for it over time.

We think we have a real competitive advantage in what we do, because first of all, we have a technologically clean sheet of paper. We have developed our technology over the past five years or so. We have a trillion dollar balance sheet. We have 150 years of risk and compliance experience, but we do everything in a new and modern way. And then we have the investment banking, where we have established long-term relationships with companies like Apple and with General Motors. This allows us to have global conversations with these companies about how we can deliver banking products in a way that helps them with their end customer. This helps them to strengthen their bond with their end customer and to develop their core business.

Not everyone likes the idea of ​​supporting integrated banking in other people’s sites and portals and working behind the scenes. What do you think of the fact that Goldman is almost invisible? Does it matter?

I like that other people don’t like it because it’s part of our strategy that other people don’t like it. We think we are in a unique position because we are new. We are excited about both strategies.

The obvious analogy for our platform strategy is what Amazon Web Services does with data and compute. But there are other examples, if you think of a Stripe or a Plaid in terms of what they allow in fintech and commerce. There are several reasons why we really like it. First, we believe it is the future. We don’t think people want to go to banks. We think people want their banks to look to them. It’s part of our two strategies: being the bank on your phone and being integrated into the ecosystems where you already operate. We partner with Amazon and Walmart to provide loans to their merchants within the ecosystem the merchants operate on. The merchant tries to sell products on the Walmart site or on an Amazon site, and we lend to them to help them grow their business. So they don’t have to make a separate trip per se, whether it’s a trip to the website or a physical trip to a bank to get that loan; they do well in this ecosystem.

In our transaction banking business, with the partnership we announced with Stripe, we are taking the transaction banking platform and enabling small businesses to use it. In our business in global markets, we bought a company called Folio Financial, which has a custody platform. At several companies we are our own custodian and can now offer custody to investment advisers registered outside of Goldman Sachs. And so you see this idea of ​​Goldman Sachs becoming a technology platform where we figure out what kind of technology it makes sense for us to build in a way that we think is really differentiated, to use it ourselves, and then to build it. ‘outsource.

The technology has come to a point where it is possible. Application programming interfaces are available so that someone can use them to integrate something like a financial product into their own business.

Have you hired more technologists and has the technician to banker ratio increased?

The percentage of engineers in relation to the total number of employees has increased over the past five years. For a long time, we have focused on different types of engineering talent, including the data side of technology.

One of the things we do, like Amazon does, is use memos, which allows us to make sure we’re all aligned before we start creating a product. This is one of the things that [Co-Chief Information Officer] Marco Argenti brought with him [his former employer] AWS to Goldman Sachs, instituting some of these mechanisms.

We had a hiring recently [to lead Goldman’s direct-to-consumer business], Swati Bhatia, who is from Stripe and before that PayPal and Capital One. She is an example of the cross pollination of what I consider to be cutting edge companies with us.

When you say you use Amazon’s memo approach, do you mean you start each meeting with everyone silently reading a six-page memo, like Jeff Bezos does?

These are not all meetings. But we use it.

You are deploying a robotic advisor this week. What do you think it would take to get a lot of people interested in the robot advice, which usually didn’t take off? And is that even what you are looking for, or do you just want to satisfy a need of your existing customers?

Our strategy is that this is part of a holistic solution that a consumer needs to manage their financial life. So once we start checking, we can be someone’s primary bank. Thus, they will be able to bring their direct deposit to Goldman Sachs, they will be able to pay their bills. But if you combine that ability with things like Insights, which is smart about how you should think about budgeting and other things, and then a product like Investing and a product like Savings, we think that combination makes sense. And we believe Goldman Sachs has unique capabilities in this area. We have been helping people manage their wealth and invest in diversified portfolios for decades in our advisor-led wealth management business.

In a sense, do you see Investing as a transition to being a human advisor and becoming a full-fledged wealth management client?

We are happy that people are moving between our different wealth management products. The idea is to provide holistic advice. I know everyone tries to divide this stuff by how much money people have, and that’s definitely one way to do it, but sometimes it just depends on what kind of experience someone wants. The Marcus client who signs up with Marcus Invest is interested in diversified portfolios and is focused on growing and maintaining their wealth over time. If over time they wish to have access to advisors, we have them both in our personal money management group and in our private wealth management team, and we would be happy to speak to them.

Returning to this idea of ​​working with Big Tech and competing with fintechs, Jamie Dimon, CEO of JPMorgan Chase, recently said that bankers should be afraid of fintech. And he was talking about companies like PayPal, Square, and Ant Financial. What do you think about this comment?

We believe that the financial industry is large and complicated, and that there are many opportunities in many ways to help consumers and businesses, large and small, manage their finances better. There are definitely places where we will be competing, but more often than not we think there are fantastic partners in all of our businesses. There are countless examples where we integrate their products into our platform and work with them in our consumer activities and other parts of the business.