Goldman Sachs overnight reported that its fourth-quarter profit had tripled. Credit:Getty Images Extraordinary moment It is the crystallisation of an extraordinary moment in the halls of US finance. Goldman, like other marquee banking companies, is hunting for new business as its traditional ones falter. Regulations rolled out since the 2008 financial crisis have put a crimp in deal-making, Wall Street's traditional expertise. The high-powered bond trading desks that generated most of Goldman's pre-crisis profits now make only a fraction of what they did before. Over the past year, Goldman executives have been preparing to introduce 401(k) accounts (employer-sponsored retirement savings accounts), loans for people saddled with credit card debt and new investment funds that can be purchased by anyone with an E-Trade account. It will all be online only. In fact, Goldman thinks one of its advantages will be that it does not have the historical baggage - read, expense - of traditional branches and tellers. All of this has prompted some head-scratching in the industry, given that Goldman has so little experience in the hotly competitive field of retail banking. Not least among the challenges: getting Americans to warm to a bank that has been maligned as a symbol of Wall Street greed during the 2008 crisis.

'The Nike of finance' At least one new customer dismissed that worry. "Of course they get blamed for stuff," said Daniel Sigal, a 24-year-old college student in the Los Angeles area who calls himself a Wall Street hopeful. But "Goldman Sachs is the Nike of finance," he said - a brand everyone knows. Its foray into banking is "very, very positive," he said. He also liked the 1.05 per cent interest rate on savings accounts that Goldman offered, which dwarfed the 0.01 per cent he was getting from Wells Fargo. The average is 0.54 per cent, according to Bankrate.com. Goldman will have to pull in many people like Sigal to make even a tiny difference in its annual revenue, which tends to be measured in the tens of billions of dollars. The senior Goldman executive overseeing all of this said that none of these businesses were lines that he could have imagined the firm getting involved in even five years ago. "We had an opportunity to take a clean sheet of paper and draw out what we might do," said that executive, Stephen Scherr, the chief of strategy for Goldman and the chief executive of its federally insured bank.

'Great potential' Before the crisis, Goldman did not even have a federally insured bank; it was forced to open one as a condition of receiving bailout funds during the financial crisis. Initially, the bank was viewed by executives as a drag. More recently, though, Goldman has come to view the bank as one of its brightest opportunities. "Over the years, it became clear that the bank had greater potential to help grow the firm," Scherr said. Behind the scenes, Goldman executives have been debating how far they want to expand their new retail offerings and if they eventually want to end up with something that would look more like a full-service online bank. The company is in the earliest stages, and it could back off if the initial experiments fail. So far, interest has been strong. Scherr said that the bank had opened tens of thousands of new accounts in its first few weeks, in addition to the 150,000 accounts it acquired from GE Capital. (Goldman bought the online banking arm of General Electric's financial services subsidiary this year, acquiring about $US16 billion in deposits as part of the deal.)

Surge of interest Although Goldman has a 50-person call centre in Iowa, it was unprepared for the surge of interest in its fledgling retail bank. Soon after the bank's debut, a columnist at The Wall Street Journal wrote about the many hiccups he encountered while trying to open an account, including error messages and confused call centre representatives. Goldman's' way forward is likely to be anything but easy, even with billions backing it. It faces lots of entrenched competitors and has almost no experience in the human elements of this kind of banking, such as customer service. Jay Sidhu, the founder of one of the many new competitors Goldman is facing, BankMobile, is sceptical of Goldman's prospects, given the importance of customer service in retail banking and Goldman's lack of experience in the area. He said it would have to offer something more than good prices to attract and keep customers. "I have a lot of respect for Goldman - but you cannot be great at everything," said Sidhu, who is also the chairman and chief executive of BankMobile's parent company, Customers Bank. Goldman is betting that its investments in technology will help it take advantage of big changes in the financial industry over the last five years, during which banks have moved away from a business model based on relationships and branches and toward one that is more reliant on smartphones and software.

Technology disruption Scherr said that Goldman was looking broadly at businesses where it could use its technology to provide a cheaper banking product. He cited small-business lending as a particularly attractive area for potential expansion, calling it "ripe for technology disruption". The strategy of offering what are essentially discount financial products is a somewhat unexpected one for Goldman, given that it has long been known as the most upscale firm on Wall Street. This is somewhat like Maserati making a push into the motorised bicycle market. But the offerings, if successful, could provide a valuable public perception payoff for Goldman by softening the firm's image as a remote bastion of power and wealth. The first big test will come later this year when Goldman starts offering a lending product targeting people who need relatively small personal loans of around $US15,000 to $US25,000. Overseeing that effort is an executive hired from the credit card company Discover, Harit Talwar, who runs a team of about 50 people working on the so-called Mosaic project on the 26th floor of Goldman's headquarters in Manhattan. Many of the employees are coders working on sophisticated ways to gauge the credit quality of potential borrowers. Last fall, Goldman introduced its first low-cost exchange-traded funds, which are managed according to computer algorithms and can be purchased through any brokerage account. Then, a few months back, Goldman purchased a small startup, Honest Dollar, that offers inexpensive accounts for retirement savings, aimed at freelancers and other part-time workers in the so-called gig economy.

These products are not all being run out of the bank. But Scherr said that the new offerings were being built with a common technological infrastructure that will make it easier for them to interact and potentially integrate. Scherr is working closely with the head of technology at Goldman, Marty Chavez, who has been trying to open up the bank to new customers and business strategies. Sidhu, of BankMobile, said he was not expecting big things but was watching with curiosity. "If Goldman wants to be a retail bank for every six-pack Joe, I wish them a lot of luck, because they will need it." The New York Times