By: Luc Teboul – MD, Head of Engineering, Transaction Banking
We knew from the outset that Goldman Sachs Transaction Banking (TxB) would be unlike any existing transaction bank. Today, close to three years into our initiative, we can see just how differentiated our business and our platform are—and can see how that benefits our clients.
We differ from our banking and fintech competitors in three main areas: technology, trust and global consistency.
Technology
The TxB platform is entirely on the cloud, with no legacy tech infrastructure complicating processes.
The TxB platform is entirely in the cloud. We have no legacy tech infrastructure to hold us back, and that’s a key reason why we fundamentally differ from other transactions banks. Cloud-based technology enables our engineers to design horizontally scalable and highly resilient applications. And it means we have a platform that delivers 99.5% uptime.
Our system is designed around a single payment and deposit platform, interacting with a single data platform. This gives us, in the language of the data engineers, a single source of truth. What it means for clients is that we have the ability to provide them with real-time data and functionality in ways most other banking systems cannot.
Our API-first approach is core to what we do.
We partner with market leading treasury management platforms to allow our clients to make the most of our tools within their existing workstations, and our API architecture allows us to turn around integrations for clients in a fraction of the time compared to the lengthy turnarounds of our competitors. Our API-based design is also the cornerstone of our banking as a service (BaaS) offerings.
We are, of course, obsessed with security, and here too our modern technology allows us to do things differently. Our engineers are trained to develop secure applications from the start: A lot of our controls are managed as code; all our communication and storage are encrypted; and each application has its own cloud account, allowing for fine grain entitlements and controls. That’s how we achieve both speed and security. And then we do the more typical things that keep a system safe, with our technology risk team performing extensive penetration tests and code reviews. We conduct many different types of audits, involving both our internal control team and external auditors.
Trust
Companies need banking partners they can trust.
Cash management relationships represent long-term investments for corporate treasury clients. That’s why companies need banking partners they can trust: banks with financial strength and clear, consistent, long-term strategies. They also need their banking partners with the necessary expertise to understand how complex a client’s businesses and banking needs can be.
The need among treasury clients for this level of trust is one reason, we believe, why the fintech revolution has made less progress in corporate cash management than it has in consumer financial products. Leading fintech companies are growing and changing quickly. They are dynamic companies, but they are subject to shifts in direction and strategy.
As much as we capture some of the best elements of a “startup” culture at Goldman Sachs TxB, we are nonetheless part of a large and stable financial services firm, a key point of difference.
We have a track record working with complex corporate clients, we execute on our plans, and we manage a complex balance sheet. We have expertise in how to leverage a deposit base and manage liquidity, capital ratios and counterparty exposure.
Corporate cash management clients also need to be assured that their transaction bank has extensive compliance and regulatory experience and knowledge and can provide robust anti-money laundering, fraud and sanctions screening. This is another area of strength for us.
Global Consistency
We have a relentless focus on client experience.
Another important aspect of our strategy at TxB is a relentless focus on client experience. To this end, our core principles include an emphasis on keeping things simple and removing friction. In practical terms, that means clients potentially can go through know-your-customer verification in a few days, for example, or open an account in hours. But there’s more that differentiates our client experience.
We are committed, in particular, to the idea of global consistency.
We want our products to behave the same whether a client is based in the U.S., Europe or Asia and regardless of the currencies involved. As straightforward as this sounds, at scale it’s a significant challenge.
Large corporates often have many different accounts and legal entities. They operate across multiple jurisdictions and have their own distinct flows and unique treasury systems. When you add to that the global variation in compliance and regulatory requirements, it often becomes difficult to deliver products and services that are consistent and frictionless. Still, we don’t accept that meeting global security, compliance and regulatory needs should come with a high level of friction for the client—and that’s another difference that helps make TxB unique.
All In One Place
It’s important to note that we don’t do things differently for the sake of being different. The distinct features of our technology and our business approach are all about the benefits that accrue to clients.
Any one feature or difference described here can probably be found from a competitor in some part of the financial industry or fintech world. But the combination of our technology and capabilities, all in one place? We’re confident that cannot be found anywhere else. And that’s a big benefit to our clients.
