Goldman Sachs is looking to create a spinoff of its 2-year-old web app Simon, but it needs rival banks to get on board in order to be successful, according to a report from Dow Jones.
Simon sells complex financial products to retail investors, and acts as an online marketplace for structured notes, the story said.
The bank is seeking investments valuing Simon at around $75 million, Dow Jones reported, citing people familiar with the matter. However, the initiative will be slow to take off without other banks' adoption. The story said that a shared platform like Simon would be efficient overall, but without other banks on board it will be expensive and hard to gain client trust.
Rival JPMorgan Chase, one of the largest issuers of structured notes, chose to partner with IBM to develop its own competing platform, the Dow Jones story said.
However, if Goldman can get multiple investors to buy stakes in the platform, other banks could potentially see it as more neutral and distanced from Goldman, and want to join in, the report said.
This isn't the first time Goldman has sought to monetize software it initially developed for internal use only, Dow Jones said. In 2015, it spun out a series of apps that allowed its employees to access their work email on mobile devices, according to the story. One of the apps, Live Current, became the basis for the Symphony message service now available across Wall Street.
The Dow Jones report said this trend is likely to continue considering R. Martin Chavez, formerly Goldman's top engineer, is now the company's new chief financial officer. He has pushed for the sharing and monetization of Goldman software.
JPMorgan declined to comment, and Goldman Sachs did not respond to a request for comment.