Podcast Summary
Focusing on people in leadership roles: Successful leaders prioritize the growth and development of their team, whether managing a small team or a large division, by implementing systems and structures to ensure their success.
Stephanie Cohen's experience at Goldman Sachs, transitioning from a career banker to the chief strategy officer and now co-head of the consumer and wealth management division, highlights the importance of focusing on people in leadership roles, whether managing a small team or a large division. While the responsibilities and challenges have changed, her commitment to making those around her successful has remained consistent. In investment banking, she honed her ability to help individuals excel, but with a larger team, she had to implement systems and structures to ensure the success of thousands. The consumer and wealth management division at Goldman Sachs, which she now leads, requires a different approach compared to the rest of the firm due to its operating nature. Through it all, Stephanie's emphasis on the value of people has been a constant theme in her career.
Goldman Sachs prioritizes effective communication of strategy: Goldman Sachs reorganized to better serve clients, improve investor relations, and provide transparency through a focus on main client groups, growing existing businesses, and diversifying into disruptive fee-based businesses.
Effective communication of strategy is crucial for the success of any organization, especially one as complex as Goldman Sachs. The firm's leadership recognized the need for clarity on strategy and organizational structure to better serve clients and improve investor relations. Goldman Sachs' mission is to advance sustainable economic growth and financial opportunity, and they prioritized getting organized around their main client groups: corporates and governments, institutions, and individuals. The firm focused on growing and strengthening their existing businesses, while also diversifying into fee-based and recurring businesses where they can be disruptors. Ultimately, the goal was to provide transparency and simplicity in a complicated institution, making it easier for people to understand and work with.
Goldman Sachs Shifts Focus to Fund-Based Businesses and Client-Centricity: Goldman Sachs is transforming its business model by focusing on fund-based businesses in alternative investing, integrating non-traditional employees, and viewing technology as the business itself.
Goldman Sachs is shifting its focus towards more fund-based businesses in the alternative investing space and placing greater emphasis on client-centricity. This transformation is reflected in the setting of clear targets and the integration of non-traditional employees, particularly technology and engineering talent. The firm's perception of technology has evolved significantly, with engineers now running businesses and a growing focus on serving developers directly. While progress has been made, there is still work to be done in fully embracing this new way of operating. The firm is no longer just using technology to facilitate business, but technology itself is becoming the business.
Goldman Sachs focuses on integrating businesses instead of building everything in-house: Goldman Sachs strategically collaborates and integrates external solutions to deliver a diverse customer experience and achieve speed to market in its consumer and wealth management business
While there are certain areas where building things from scratch can provide a competitive advantage, such as in the development of proprietary trading systems, there are also instances where it's necessary to collaborate with or acquire solutions from external sources to achieve speed to market and deliver a desirable customer experience. For instance, in Goldman Sachs' consumer and wealth management business, the firm has deliberately chosen not to build everything in-house but instead focuses on a singular technology platform to integrate various businesses and offerings. The consumer business, which includes private wealth management, Personal Financial Management Group, and a digital consumer banking platform, has over $1 trillion in client assets, 13 million customers, and 10,000 employees. By combining these businesses, Goldman Sachs aims to leverage digital capabilities across all offerings and cater to a diverse client base. The firm continues to work on striking the right balance between building and collaborating as it evolves its consumer and wealth management vision.
Goldman Sachs: Offering a Platform for Clients to Build On: Goldman Sachs is not just focusing on owning the end client experience but also offering their firm as a platform for clients to build on, through offerings like Marcus and partnerships, aiming to make financial services invisible and trusted.
Goldman Sachs is not just focusing on owning the end client experience but also offering the firm as a platform for clients to build on. This strategy, which they call their self-reinforcing strategies, includes Goldman Sachs Marcus, where they aim to be someone's primary bank on their phone, and embedding these capabilities in the ecosystems of their partners. Goldman Sachs believes they have a competitive advantage due to their long-standing corporate relationships and their goal is to help their partners grow their business by managing their financial decisions. Additionally, they have a business called AECO, which focuses on wealth management for corporates and their employees. With the ongoing war for talent, Goldman Sachs recognizes that most people's wealth is created at their place of employment and expect their employer to help them manage their finances. By offering a deeper, multiproduct relationship, Goldman Sachs aims to make the bank piece of it invisible and provide financial services in trusted ecosystems.
AECO's Acquisition and Digital Solution for Financial Wellness: AECO's acquisition of United Capital and development of a digital solution enable them to offer financial wellness benefits to a wider range of employees and companies, improving both financial stability and mental health.
AECO, a financial services company, recognizes the connection between mental health and financial stability, and they aim to help employers offer financial wellness benefits to all their employees, not just executives. With their acquisition of United Capital and development of a digital solution, they can now serve a wide range of companies and employees, creating an environment where financial issues can be discussed with experts who have intimate knowledge of the company. This benefits both employees and employers, and it's an example of how AECO combines its investment banking and wealth management capabilities. Their open-architecture approach allows them to offer a range of wealth management services, and they plan to evolve their private wealth business to meet changing client expectations and stay relevant in the industry. With a long-standing client base and high adviser tenure, the private wealth business is a valuable asset for AECO.
Focusing on digital enhancement and catered services for underrepresented clients: Goldman Sachs is investing in technology and tailored services to improve digital experiences for underrepresented clients and expand capabilities through partnerships and acquisitions.
Goldman Sachs, a leading financial institution, recognizes the importance of both longevity and evolution in their business. They are focusing on enhancing their digital experience for clients, particularly those from underrepresented groups, through new technology and catered services. Regarding mergers and acquisitions (M&A), while the people side of the business is challenging, they are open to partnerships and acquisitions for capability expansion. For Fintech entrepreneurs, Goldman sees potential partnerships in areas like financial cloud banking as a service. They aim to be the go-to partner for growing businesses and encourage direct communication for feedback and problem-solving.
Communication and quick decision-making for successful fintech-Goldman Sachs partnerships: Effective communication and collaboration between fintechs and Goldman Sachs can lead to successful partnerships, particularly in areas like transaction banking, consumer businesses, and digital platforms. Understanding each other's strategies is essential for successful collaborations, even in volatile markets.
Effective communication and quick decision-making are crucial for successful partnerships between fintech companies and financial institutions like Goldman Sachs. The interview highlights Goldman Sachs' efforts to provide swift answers and improve businesses through their network and requirements, particularly in areas like cybersecurity. The closest connection between fintechs and Goldman Sachs lies in areas such as transaction banking, consumer businesses, and digital platforms. The interviewer expresses a desire for more organic interaction between product teams and encourages founders considering public markets to understand the strategies of both parties for successful collaborations. Despite the current market volatility due to inflation, interest rates, and geopolitical issues, the interviewer believes that effective communication and collaboration can lead to fruitful partnerships.
Staying customer-focused and long-term goal oriented during IPO process: Focus on customer needs and company goals during IPO process, build relationships with investors, and navigate challenges with a strong foundation.
While it's important for businesses to stay informed about current economic conditions, it's equally important to focus on the needs of the customer and the long-term goals of the company. When considering an IPO, it's crucial to go public for the right reasons, such as access to capital or potential acquisitions. Building relationships with investors beforehand is essential for establishing credibility and maintaining a loyal shareholder base. Although networking with potential investors may not be every entrepreneur's favorite activity, it is a valuable investment of time. Remember, the journey is just as important as the destination. By focusing on the relationships and the reasons for going public, companies can navigate the challenges that inevitably arise and maintain a strong foundation for growth.
