The announcement last week that Goldman Sachs – the institution once dubbed “a great vampire squid wrapped around the face of humanity” by Rolling Stone magazine at the height of the financial crisis in 2010 – is entering the mainstream savings account market in the UK through their online-only brand Marcus, will send ripples through the banking sector, not least because the account offers a market-beating 1.5% interest for the first year.
The new account from Marcus (named after one of the founders of Goldman Sachs, and launched in the US in 2016) is explicitly aimed at stealing market share from the established high street banks, who are already suffering from intense competition and low profit margins as well as trying to fend off a swathe of digital first start-ups such as Monzo and Revolut.
Whilst the generous rates will no doubt cause an immediate flurry of account openings, as an online-only provider with no ATM card (though the account can be managed by phone if required) ease of usability of the brand’s website, mobile site and app will be vital for the long term success of the enterprise.
However, at present, the brand doesn’t actually offer an app; a notable omission in the UK market where high street behemoths such as Barclays, Nationwide and Lloyds have been offering clients useful and well-performing apps for several years. In April, Goldmans acquired personal finance app Clarity Money, but have yet to pivot it into serving Marcus customers.
Part of the account’s appeal is the freedom to deposit and withdraw funds as many times as you like with no charges, unlike most savings accounts, but a frustrating online experience in doing so will soon have investors jumping ship, if market incumbents can quickly move to match the rates on accounts that users know can be easily managed through existing apps.
In short – a headline grabbing rate from one of banking’s most well-known (if not well-loved) brands will garner deposits from savvy investors in the short term, but long term success in transaction-based accounts will require rapid investment in easy to use digital experiences.
Get in touch to find out more about the experience demands UK consumers have when it comes to banking and how Goldman Sachs is positioned to shake up the market.