Goldman Sachs has a new model: Apple –

For the first time, it is so that rivals their own investment products by a Goldman web application to sell, according to several customers and the Bank.

The move will Goldman to do more than just to sell their own products. It provides an online platform used by others to create – even competitors -. Customer reach

Just as iPhone users Google Maps or Spotify music streaming service instead of Apple’s own applications, retail brokers throughout the country can choose select portfolios for their clients a Wells Fargo debt, using the web tool Goldman.

There is a new example of investment banks are looking for new ways to make money as Superlow interest and stricter regulation squeeze profits. In some cases, banks like Goldman transition are of audacious merchant fees take middlemen who earn less risk of small fees.

For Goldman is urgency behind the shift: Earned The debt-trading desks $ 5600000000 to September. This is the smallest distances at this point in the year since 2003 and a fraction of the approximately $ 20 billion debt-trading desks produced in this period of 2009

“The business of Goldman Sachs model is disturbed by regulatory changes,” said Guy Moszkowski, an analyst at the Autonomous Research. “You need to replace lost income with other things.”

Goldman software, called Simon, Financial Advisor combines complex debt investigated with known banks as structured bonds that they issue. These notes are usually bank bonds with payments based on the performance of other measures, such as the S & P 500 or the oil prices.

While the products generate revenue for the banks, they in a new regulatory spotlight shifted Goldman potentially. The Securities and Exchange Commission has scrutinized whether structured bonds to investors, who do not understand their risks are sold.

Simon was developed in a portion of Goldman trading floor, the glass walls which double as whiteboards and a putting green in the corner. Within the app, helps a cartoon character broker to understand the debt and make their own structures.

Simon is part of a planned family of Web-based applications collectively Marquee, a play on “Marty”, according to the chief technologist of Goldman, R. Martin Chavez. called Early application in 2012 launched block helps the company traders move large chunks of Exchange Traded Funds. A newer tool, Studio, experiments with designs for specialized indices.

Simon – formal, structured investment marketplace and Online Network – is the first app with customers are shared, usually financial advisors at other firms. It’s part of the job four years ago started, said the Goldman CEO Lloyd Blankfein, the Bank is a “low-cost provider” of banking services to be technology to enhance revenue.

This openness is a remarkable shift for Goldman, which has closely guarded its technology in the past. For example, by Goldman in the early 2000s, a trading platform called REDI developed clients connected only to Goldman trading desk, no trader at competing companies. The exhibited some customers who wanted more options.

This experience nudged open Goldman as Simon new software offerings to external partners. The company is also outside Coder allows to build their own functions in Marquee applications.

Simon launched two years ago as a private connection between Goldman securities desk and own approximately 400 financial advisors who become rich just looking for the company.

start last year, the bank Simon retail brokerages began to give away. Some 14,000 consultant at companies like Raymond James Financial, TD Bank and LPL Financial Holdings, can now Simons Browse deals or their own design, as compared to 2,300 at the end of 2015

And in recent months, Goldman began competing banks their own notes for sale by Simon. Wells Fargo and TD Bank Group have done so, and Goldman negotiated five other companies to bring on board. In these cases, Goldman takes a small cut of the fee.

Goldman has not reached its fiercest rivals agreements, such as Morgan Stanley and JP Morgan. A deal with either would greatly enhance Simons reach and would be a clear sign that post-crisis challenges even shares the bitterest bridge.

But Goldman has already reaped rewards. The company has historically been a small player in the structured notes market, because it is the massive broker Salesforce to connect with retail customers is missing.

in a structured note issuance in 2013 for the first this year, according to Bloomberg data

starts since Simon, Goldman has risen from fourth. And while the company far less exposed to competitors notes by Simon makes, as it does to its own notes that additional revenue is not needed additional capital to take risks or to hire more dealers or advisers.

to Telis Demos letter to telis.demos@wsj.com and Liz Hoffman in liz.hoffman@wsj.com

This article was published The Wall Street Journal


Our Source: http://www.efinancialnews.com/story/2016-10-31/goldman-sachs-new-model-simon?mod=rss-fintech

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