Goldman Sachs Group Inc (NYSE: GS)
acquired Clarity Money, an app which claims to assist consumers to make the best financial decision under the circumstances. This acquisition is in line with the venerable 149-year-old bank to transition from present Wall Street to Main Street. It will hopefully assist the bank to unlock multiple revenue streams. The bank's present core activities like trading are under pressure due to stricter regulations and intermittent activity of its large institutional clients. The gradual move to electronic platforms has hurt traditional banks badly.
Clarity Money, founded in 2016, is headquartered in New York. It has gathered approximately $15 million of venture finance. The list of investors includes Soros Capital, Citi Ventures, and Bessemer Venture Partners. Adam Dell, Michael Dell of Dell Technologies' younger brother, will join Goldman Sachs as a partner.
Clarity Money was acquired under the Marcus banner. The latter is the name given by Goldman to the specific digital banking business which it began about 18 months before. This acquisition is the latest of many deals made by Marcus. The app claims to enjoy the confidence of one million consumers all over the United States to manage their personal finances.
Clarity Money functions by connecting the credit card accounts to current accounts of its users. It then offers suggestions for any loans which could be refinanced. It advises the users on which subscriptions they should cancel. Bill renegotiation advice is also given. In case a client accepts any offer from any other service provider, a finder's fee will be paid to Clarity.
Stephen Scherr, the chief executive of the banking division of Goldman, said Clarity has pioneered consumer-centric approach to any personal finance which will assist Marcus to continue in its quest to place power in consumers' hands. The digital banking business of Goldman is thriving. The business purchased a lot of retail deposits from their previous owner GE Capital. It has now amassed approximately $20 billion worth of deposits. It gave approximately three billion dollars' worth of unsecured loans. According to Goldman Sachs' chief commercial officer, Omer Ismail, Marcus presently has 500,000 customers spread over its number of products like retirement accounts, credit cards, and wealth management.
Clarity Money is not Marcus' first acquisition. It has earlier bought Final, a start-up working from Oakland, California. Final deals with the business of credit cards. It provides customized card numbers so that fraud can be minimized.