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Automatic TRANSCRIPT

Now our main story this morning it has to do with the future future of Goldman Sachs. The Investment Bank has been trying to attract a very different type of customer lately. These are people who are looking for traditional banking services like savings accounts. It's the retail banking effort is called Marcus but it's been struggling. Charlie Turner Has Been Finding out why from Peter Ruediger Peter Goldman Sachs has been known as the bank focused on stock trading mergers. IPO's but isn't the company pinning its hopes or at least more of its hopes on Marcus. It's consumer lender always marcus done done really since it launched in two thousand sixteen so this was a big departure from Goldman and it's been an expensive one so far so since it started making its first loans and deposits about three years ago. Marcus's ACAS lost one point three billion dollars and that's gonNA things like buying a couple of other startups data can leapfrog some of the other competitors to hiring a lot of people to staff call centers to really just sending out pieces of mail to get other people to take out one of their loan so it's been an expensive proposition so far. Goldman has had to find customers in a bid to compete with other consumer banks. Isn't it doing this through acquiring or partnering with other companies. That's right biggest banks in the country think of J. P. Morgan Chase or wells Fargo. have thousands of branches is all across the country. Goldman is a much newer bank. it's a digital bank. There's a website it doesn't have any branches so rather than kind of hang shingle on the corner and hoping somebody walks by an opening savings account it kind of has to go find the customers where they are so a credit card that with apple is one good example of that apple has one hundred million iphone users in the US what better way data can tap into a a base of young tech savvy consumers who are willing to spend then kind of offer credit card through apple some other examples that we're reporting the story. Is they're actually talking into. Aarp about maybe extending some banking services to their thirty eight million senior citizens who are AARP. Are they really counting a lot on this partnership on a credit had a card with apple where do things stand right now as it had to concede a lot of the business partnership to apple so this woman's I ever credit card because of that in order to kind of get into where some of the other big banks that have issued cards for folks like Amazon and American Airlines if Gomo wants to be on that level it in new needed a partner and apple knew it needed it it kind of get to where it wants to be so because of that there was some leverage in their relationship that apple could extract over Goldman so where do things stand with Marcus right now is Goldman in some sort regret stage or is it in the toddler stage with Marcus which is only three years old. I mean what has to happen for Marcus to stop losing so much money which I believe you. Mentioned was one point three a billion dollars one point three billion they're definitely in the toddler phase right there three years old so toddler so far what do they have to do they they have to kind of get beyond the build phase as of the programs just kind of let it run for a couple years so when you're making your first loan you have to build all kinds of systems to you know send out those pieces of mail to actually collect the payments to actually early go after delinquent borrowers and once those are built you can kind of sit back and hope that you've made the right choices in Europe models and the money could come a little bit more but you know because I've never done this before before. There are some self inflicted wounds. They've made that they may be would do differently if they had to do it over again so for instance when Marcus launched its loan program one choice that they made was not to have a team of if specialists committed to the act of collecting payments from delinquent borrowers now part of that was motivated by the fact that this is Golden Sachs who famously was called the vampire squid after the financial angel crisis headlines like Goldman Sachs sues grandma to try to recover you know delinquent loans is not something that the PR department they are really wanted to see so they're. They're a a little gun shy on doing some of that otherwise there's you know in the category of rookie mistakes. I would also say that apple card was a huge build and maybe maybe they didn't anticipate the resources that it would entail so you know in order to get this thing launched on time which debuted in August they actually had kind of repurpose in hundreds of engineers all around Goldman's projects. They are working on in other parts of the firm to be put on hold. Everybody added to come to Marquess to kind of get this apple credit card launched on time we should say that apple and Goldman declined to comment