The Rise And Fall Of Goldman Sachs' Marcus

Saying the name out loud conjures images of Ivy League-educated investment bankers in tailored suits managing money for the wealthiest of the wealthy. Or closing deals in high-rise corporate offices. Advising the wealthiest of the wealthy. Navigating the corridors of power across the world’s financial capitals — New York, London, Singapore.
So, why did Goldman Sachs — the 150-year-old investment bank — try to get into checking accounts and credit cards? And, what’s more, how did Goldman Sachs’ fail at that? Watch the video above to find out more.

Chapters:
00:00 — Introduction
01:13 — Introducing Marcus
03:31 — Goldman’s trouble with consumer banking
05:29 — What went wrong?
07:04 — What’s next?

Produced by Jeff Morganteen
Reporting by Hugh Son
Edited by Dennis Donovan
Graphics by Mallory Brangan
Narrated by Jordan Smith

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The Rise And Fall Of Goldman Sach’s Marcus

[TiannaTrunnell]

Absolutely love it!!! I'll have to be finan-cially stable in every sense before purchasing my first supercar. The best thing to do with your money is to invest rightly because money left saving will end up with no returns

[connorscanlon]

I think it’s important to disambiguate Marcus from Apple Card— Marcus is a good product that I think is differentiated well from the competition in terms of user experience, primarily used for deposit accounts. I see no real issue with this business.

The problem is Apple Card, which has had startlingly high losses versus other major CCs. GS got played by Apple, and with a large percentage of purchases on Apple Card going toward Apple purchases, Apple, in effect, got Goldman to put ~1.5 billion into Apple revenues over the last year. A huge blunder for GS and a boon for Apple. This is where the focus should be.

[julienwater]

Times are weird. The US dollar is losing purchasing power due to inflation while strengthening against other currencies and assets. The stock market, real estate, crypto AND precious metals are down because people are fleeing to the "safety" of the dollar. where else can we put our investment money? I can't afford to see my savings of around $320, 000 turn to dust in front of my eyes

[chickenceiling]

no where in this video does it explain how Marcus is actually a failure, wtf?

[GHTZ]

The way it works in big banks is, a big guy sitting at his lake house one fine day thinks, let's do something different. From that time on, they push all the resources and money into it without really validating if the idea is good or not. Juniors are under pressure to please the big guy so they never question him.

[harry]

Marcus is a good product but gets destroyed by online banks and higher rates. They also messed up with the Apple Card, they thought about the numbers first rather than Credit Scores, and I’m surprised because I’ve read and heard that most Apple Card Customers have like 670 or 680. They’ve been supposedly bleeding because of defaults and clients not paying their credit card debts.

[maddy]

I don't understand, where did they fail in consumer banking? Its like any other online bank Amex Savings, Ally etc., Just no physical branches, checking accounts and ATM cards

[gfuterfas]

I still don't understand... Marcus failed? I have a Marcus online savings account and I like it so far. Should I be worried about it? It's FDIC insured.

[CalienteFrijoles]

Of course, the Wells Fargo analyst had criticisms and advised that Goldman Sachs stay where they were bc they don’t want a competitor on the consumer side that can do it better.

[Technobitz]

Ngl I was definitely expecting him to give some bs answer but he said that it was a mistake and that it was poorly executed. Proper response to a situation that is not favorable.

[verynick]

I think they are in a ok position. Most banking and investment firms are in a red in 2023, nothing new. If they announced that they are cutting down Marcus then that would have been a different scenario haha

[spicypickle]

Would hate to see Marcus go. As someone who worked on the launch of the product– it was all too much, too quickly. Only 18 months before launch? dumbbbb. Why? They still wanted their cushy million dollar salaries for a startup and they were too many egos.

In the end, I believe they actually OVER leveraged their brand and expertise. They should've done more to cement themselves culturally before ballooning their offerings+spendings. I love the apple card but it was just too easy to get. They went through multiple brand re-designs in the first 5 years.... in design, it can be better to slow down and do it right – the first time – instead of spinning your wheels. Don't get me started on the engineering. Oh well... hopefully they'll keep their sole offerings until a competent shepherd comes along.

[abhishekkoley]

They should've used their own name instead of marcus. And let users maintain an account balance starting from $100k. Serving only high quality users at a low scale and slowly increasing the user base.

[tvm]

The commentator failed to mention that Goldman brought a high profile guy from Discover to run the business and he successfully ran it to the ground! How can a B grade business executive run a business for an A grade investment bank?

[sheh.]

He didn’t really explain how GS failed. Marcus is a great product and so is the Apple credit card and savings account. Consumers like both. So just because they haven’t made investors happy it’s a failure? They’re going to abandon the consumers that enjoy the products?

[GeorgiaMade]

Marcus was savings account only. That was the problem when the average American don’t even have $500 in their savings

[Naviss]

I enjoy my Apple Card, and Apple Savings Account.

[MrBrewman]

I hope they keep the Apple Card and Apple Savings Account partnership.

[luxushauseragency]

Ah, the old "Rise and Fall" routine, CNBC. That title really conjured up a "Game of Thrones" level drama about Goldman Sachs. The way it was phrased, you'd think we were about to witness the Wall Street equivalent of the Titanic sinking, or the meteor that took out the dinosaurs. But the reality was far from it.

Goldman Sachs dipped its toes in the unfamiliar waters of Retail Banking and sure, it was a bit like watching an Ivy League valedictorian try their hand at stand-up comedy - entertaining, but not quite the desired outcome. Yet, does that spell the end of Goldman Sachs, the 150-year-old Wall Street Titan? Far from it. It's like saying a tennis player has fallen from grace because they missed one backhand shot in an otherwise stellar career.

Of course, we do hold Goldman Sachs to an arguably high standard, after all, they're usually the ones dishing out advice on these matters. It's a bit like a Michelin Star chef burning their toast - it's not the end of the world, but you do expect better from them. You'd think they'd follow their own cooking recipes, right? But hey, everyone has an off day!

Still, the video does bring up a good point, despite its clickbait title - even the giants can stumble when stepping into new arenas. It's a healthy reminder that not even Goldman Sachs can just waltz into a new industry segment and make it rain profits from the get-go.

Lastly, though we've poked fun at the title, let's not forget that CNBC videos are typically on point, concise, and factual. They're like the golden retrievers of financial reporting - sure, they might chew up your favourite shoe (or in this case, title) from time to time, but you can't help but love them for their reliable and straightforward nature. Keep it up, CNBC, but maybe ease up on the doomsday titles.

[JeromeDimairho]

7:25 They wouldn't even take their own advise... Wow! Even the big guys make costly mistakes!