In this clip from "The Future of Fintech" on Motley Fool Live, recorded on Feb. 10, Motley Fool contributors Matt Frankel and Jason Hall discuss why they think Goldman Sachs (GS -0.03%) has underappreciated potential in its consumer banking business and how its brand name gives it an edge among the competition.
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Matt Frankel: What are your thoughts on Goldman Sachs and Marcus? I would argue that Marcus is SoFi's (SOFI -1.49%) biggest direct competitor in the sense that they are an online bank. They can offer checking and savings products. They offer investment products. They offer credit cards. They're Apple's (AAPL -0.87%) credit card partner. They are an actual bank and have been since the 1800s. I think Goldman has very underappreciated consumer banking potential. I've written about this many times. It's a very small percentage of their revenue right now. Most of it is still their core investment banking business. I think Goldman Sachs has a lot of potential to be one of the big banks in 10 years or so because they are the only company that has the combination of a brand name like Goldman Sachs, which is synonymous with money. They're one of the most valuable brands other than like Visa (V 0.66%) and MasterCard (MA 0.02%) and the entire financial sector. They have that brand name and they don't have a legacy branch infrastructure they have to deal with like Bank of America (BAC 0.34%) or Wells Fargo (WFC 0.89%)does. They are the only company with that combination right now. Guys, any thoughts on Goldman?
Jason Hall: I think you're mostly right. The more they can continue to build up that consumer banking business, the stronger they're going to be because that core investment banking business, it's a cyclical business and it's going to have its ups and downs. It'll be interesting to see, as the interest rate environment changes and deal-making changes as cost-of-capital change, how it affects their results. I think it's smart that they're looking to build a consumer banking business.
