Goldman Sachs banking-as-service plans accelerate with Amazon, Apple partnerships
The intersection of finance and technology increasingly has Goldman Sachs in the middle as it has lined up a small business lending program with Amazon and its Apple Card efforts. The upshot is Goldman Sachs and its Marcus brand are becoming a banking-as-a-service juggernaut.
In June, Amazon and Goldman Sachs kicked off a lending program for Amazon's third-party sellers. The effort was reported by CNBC and outlined in an Amazon forum. Goldman's Marcus Business Line of Credit is being pitched to Amazon sellers that look like attractive borrowers.
On Goldman Sachs second quarter earnings conference call, CEO David Solomon elaborated somewhat on the Amazon partnership:
We continue to expand our digital consumer business. We were pleased to announce our new small business lending partnership with Amazon, which will allow us to leverage our proprietary digital underwriting decision platform using data shared by Amazon's third-party sellers to provide inventory and operational financing to support their growth. This partnership, which is being launched on a smaller scale at this moment, is another example of our innovation and our ability to partner with leading corporations to deliver differentiated value to our customers. Our consumer partnership also included our recent point-of-sale financing engagement with JetBlue and of course, our credit card with Apple.
The Goldman Sachs digital underwriting platform is being melded with Amazon and Apple data to spur financial services revenue. At a January investor day, Goldman Sachs outlined its objectives for its Marcus platform. The two money slides:
With the Apple Card nearing its one-year anniversary, it'll be interesting to see how the credit business does amid a COVID-19 economic slowdown. Goldman Sachs and other banks have upped provisions for losses and defaults. The back-end algorithms are probably going to skew more toward risk management than ever before.
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No matter how you slice it Goldman Sachs' Marcus business is likely to fare well with Amazon and Apple plugging into it. Apple Card will face consumer spending turbulence. So look for the small business lending program with Amazon to send more deposits toward Goldman Sachs.