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Goldman targets credit-card borrowers with new lending business

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Goldman targets credit-card borrowers with new lending business

Goldman Sachs Group Inc has launched a new online lending business that targets borrowers saddled with credit-card debt, the bank said on Thursday.


FILE PHOTO — A view of the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid/File Photo

NEW YORK: Goldman Sachs Group Inc has launched a new online lending business that targets borrowers saddled with credit-card debt, the bank said on Thursday.

The business, called Marcus, represents Goldman’s first major foray into consumer lending as it tries to earn more from the US$124 billion in deposits it has on its balance sheet.

Marcus, which kicked off on Thursday, will offer uncollateralized personal loans of up to US$30,000 to borrowers who meet certain credit requirements, according to a press release. The business will focus on customers who want to manage their credit card debt, Goldman said.

The bank hired former Discover Financial Services executive Harit Talwar more than a year ago to help formulate a digital lending strategy. It surveyed thousands of consumers about their borrowing experience and found they were frustrated by hidden fees, changing interest rates, boilerplate payment options and difficulty in reaching a human customer-service representative when they encountered problems.

As a result, Marcus does not have any fees, has a fixed rate, allows customers to create their own payment dates and offers live customer support representatives. Goldman noted they are based in the United States.

Marcus aims to be a “simpler solution” for borrowers than cards, Talwar said in a statement. Goldman plans to tweak the platform in response to customer feedback.

Marcus represents part of Goldman’s long-running effort to reinvent itself after the 2007-2009 financial crisis, during which it obtained a banking license and came under scathing criticism for profits it earned from the U.S. mortgage market’s collapse.

Earlier this year, Goldman launched a complementary deposit-taking platform after acquiring GE Capital’s online bank. Its moves are similar to those of chief rival Morgan Stanley .

Although Marcus is a digital platform, borrowers will initially only be able to apply for a loan after receiving a code in the mail. As of Thursday, borrowers can use those codes at Marcus.com.

(Reporting by Olivia Oran; Writing by Lauren Tara LaCapra)

Source

http://www.channelnewsasia.com/news/business/international/goldman-targets-credit-card-borrowers-with-new-lending-business/3203780.html