in losses since 2016. And pivoting to consumer banking comes with its risks, including high loan default rates that could dampen its chance for profitability, or the potential of tarnishing its reputation as an upmarket bank.
But the firm's consumer division expenses could slow as its customer base scales, and the goal is to offset them altogether.Goldman Sachs CFO Stephen Sherr said on the firm's Q2 2019 that 2019 and 2020 represent the depth of the bank's investment cycle for building new businesses and digital platforms, and that as businesses like Marcus and Apple Card scale in the coming years, they should come to contribute positively to the bank's return on equity .
Goldman is betting that a Banking-as-a-Service play, like the relationship it's developing with Saga, could prove lucrative. White-labeling its product to provide another company with the back-end infrastructure for targeted products, like Saga's savings accounts, could be an effective path to monetization and scale for Goldman.
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