With growing market share and low costs, it's no wonder the online retail banking industry is booming — and that's good enough for Goldman Sachs.
Goldman announced recently it would start its own retail bank, effective immediately, after acquiring the online deposit platform of GE Capital.
With the explosion of financial technology, this is an opportunity for Goldman to compete for low-cost deposits to boost the bank's funding, said Kenneth Leon, global research director with S&P Global Market Intelligence.
"It doesn't surprise me that a firm like Goldman would get into this business," added Charles Schembri, vice president of financial services at market research company TNS. "There's massive amounts of growth potential."
"Direct banks are earning a larger share of new primary bank relationships, and a good part of the growth they are experiencing is coming from the millennial generation," Schembri said. It's "a more desirable demographic of younger and more affluent customers."