What Does $1 Get You? A Goldman Sachs Account

Goldman Sachs will now offer online savings accounts to consumers through GSbank.com with a deposit requirement of one dollar. The move shows how dramatically the financial world has shifted since the credit crisis of 2007.

The deepening push into consumer banking comes at a time when the company’s traditional lines of institution-serving business have not been as profitable, reports the Financial Times. Once lucrative (and risky) activities such as proprietary trading—a bank using its own money to trade in markets—have been jettisoned or shrunk dramatically to comply with regulations such as the Dodd-Frank Act or Basel III capital requirements. Longtime bank analyst Dick Bove has gone so far as to call the past 10 years of performance the "Lost Decade." 

In an effort to adapt, Goldman is making inroads into consumer banking. Recently the company acquired $16B of consumer deposits from GE Capital. Goldman chief strategy officer Stephen Scherr told the paper retail funds open a new source of cash for the company. Regulators have favored banks funding their continued operations through retail money since they are seen as the least volatile source of funds. The bank held $98B in deposits at the end of last year.

Goldman’s push into retail banking comes at a time when fintech companies—those that attempt to leverage technology to address inefficiencies in banking—have become much more prominent. Mosaic, the bank’s online lending platform, is due to be launched later this year and will compete against companies such as Lending Club and SoFi. GS Bank's retail funds will support Mosaic as the company charts out a new strategy. [FT]