Name: Insights: Goldman Sachs' Strategy for Success
Uploaded: 2020-04-23
Duration: 3 min 33 s
Description: The chief strategy officers explains how the 150-year-old Wall Street institution continues innovating and making long-term plans.

 STEPHANIE COHEN: We really think about it as three things. And one is growing and strengthening our existing businesses. If you think about our traditional market making businesses, our advisory businesses, our asset management, and wealth management businesses we're focused on growing those businesses globally. But you talked about a transformation when you introduced me, and that's really about diversifying our revenue and what we'll call growing more fee based recurring revenues. And that will be what we're doing and things like transaction banking, which is payments, or in our consumer business, or as we combined all of our alternative investing businesses and our growing third party fundraising. And then the last piece is operating more efficiently. I think when people hear that, they start to think that that just must mean cost cutting. And that's not what we're talking about. What we're talking about is we're a bank, we became a bank right after around 2008. And when you become a bank, you actually can take in deposits and lend out money. And deposits are a really nice way to fund ourselves. So one of the ways we're operating more efficiently is changing our funding mix, but it's also doing things in a one GS client centric way. And so I'd like to say that no one cares about our internal divisions except for us. What our clients care about is us servicing them. And so the ultimate part of our strategy is that we're focused on clients, and we're focused on serving corporate, institutions, and individuals. And in doing that, we want to do that no one Goldman Sachs way. And that's better for clients but also more efficient. ADAM LASHINSKY: From an external perspective, the biggest strategic move that Goldman has made in the last handful of years was starting Marcus. A consumer bank in the United States. Why Marcus? Why go to consumers for the first time in Goldman Sachs as 150 year history? STEPHANIE COHEN: People want banking to be part of their daily lives. They don't want it to be something separate and apart that they do, they want to embed it in what they do. And a lot of that is on the phone that I'm sure all of you are carrying with you. And so while entering consumer banking would have been an exercise in opening branches. Many decades ago, today, it's very different. So we felt that we could take the fact that we had a clean sheet of paper, a real excellence in technology and combine that with all the balance sheet risk compliance functions that we have and built it really a new and different consumer bank for the future. Which we started with loans. We have deposits, but our real goal is to build a digital consumer bank. The future and really help people manage their financial lives and deliver products that are transparent and really put the customer first. The way that we think about M&A, and actually the way that we think about all ways to execute our strategy is one question is what in the world is your strategy? And then you do you buy build partner invest. So we think about it as a continuum of how to do things. And so I'll talk to you about what we did and Marcus is an example of generally how we're thinking about M&A. So we talked about our consumer business, and that business people would generally consider in an organic built that we built that ourselves. But the reality is that we bought the G deposit platform, that we bought a business called Clarity Money which is a personal financial management tool, and we've partnered with Apple in order to do our credit card. So Marcus is a really great example of how we want to do things going forward, which is we're not going to do everything ourselves. It's going to be a mixture of everything. And what we'll look at things. I think the chances of us doing something really large is pretty low probability. We're really focused on more bolt on opportunities, another thing that we did recently in the US is that we bought United capital, which is a wealth management business. 

Insights: Goldman Sachs' Strategy for Success

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How the Wall Street institution continues innovating.

Goldman Sachs' Strategy for Success

The chief strategy officers explains how the 150-year-old Wall Street institution continues innovating and making long-term plans.