Born Digital: Reimagining Treasury with Goldman Sachs

After much anticipation, Goldman Sachs has entered the transaction banking arena – firing on all cylinders. Taking a digital-first approach to its cash management platform, the bank looks set to change the playing field for corporate treasurers. Eduardo Vergara, Global Head, Product and Sales for Transaction Banking and Chad Wallace, Global Head of Digital Product & Design for Transaction Banking share the inside track on what treasurers can expect from the bank, including intelligent digital design that also delivers on practicality.

Eleanor Hill, Editor, TMI (EH): First things first, why did Goldman Sachs decide to shake things up in the transaction banking world?

Eduardo Vergara (EV): We had in-depth conversations with circa 100 clients before entering this space. The feedback was loud and clear: current products and offerings were not meeting their needs. One of the major pain points for treasurers was the fact that industry providers had built their platforms in a bygone era, and many are still using legacy technology.

As such, we saw an opportunity to do something very different – unhindered by legacy. We wanted to bring the digital corporate user experience into line with that of the modern consumer, offering ease and simplicity, together with the expertise and excellence that clients already expect from the Goldman Sachs name.

EH: How did you go about building this digital corporate user experience?

Chad Wallace (CW): This is where my interest in the user interface and experience of all of our customer-facing channels comes into play. As Eduardo mentioned, we conducted significant research among treasury clients to help fully understand, and address, their current wants and future needs.

As well as asking them about the challenges experienced with existing providers, we also shadowed some clients – with their permission of course. The plan here was to see if there were any hidden pain points; those aspects that treasurers simply accepted as the norm without realising that they could be so much better.

Bank account opening, for example, can take up to 120 days, only then is the account number allocated to the client. We thought, ‘why not give the account number at the start of the process?’. By using service design principles, we have been able to think how we could make simple changes to our overall process methodology.

As part of that evolution, we gave ‘personas’ to different functions within our clients – the treasurer, the compliance officer, the engineer who is integrating with our products – and from here we created customer journey maps. We visualised the individual processes each person uses, and that enabled us to find the best operational fit. We built workflows based on ‘customer first’, and then retrofitted our operational processes within that.

Its creation has been about building a consumer-grade experience, providing the best and most powerful means necessary to give treasurers precisely what they need now and in the future. Whether it’s payment settlement or liquidity options, or being able to better manage cashflow projections, we knew these tools had to be more advanced, yet also had to be easy to use. In 2020, we see no reason why treasurers should have to resort to a platform manual and training sessions just to use transaction banking products.

Many of the concepts behind the platform are based on human-centred design. Our product & design team partners closely with our engineering teams to deliver customer value every sprint. We also focus on talent, pairing expert commercial banking managers with digital product managers; it’s how we have successfully reimagined treasury products. And this is also how we will continue to evolve the platform going forward.

EH: Two quick questions before we move on: does the platform have a name? And is it live right now?

CW: Actually, we made a conscious decision not to name it! It’s our transaction banking platform, and we think the functionality speaks for itself. It is live in the US, and we will expand the same multi-currency, digital-first, transaction banking platform around the world including Europe and the UK next year.

EH: Could you elaborate a little more on the advanced capabilities that users can expect?

EV: We’ve created a number of advanced factors that highlight the difference between our offering and others. As well as being cloud-based, it has also been built around application programming interfaces [APIs], making it the most advanced Open-Banking platform in the corporate treasury space. We’re opening up these APIs to partners and fintechs so they can integrate with us, using our servicing platform, and begin leveraging the tools we have built but still giving them complete control over the user experience they want to create. 

Fundamental to the offering, and a big differentiator, is our virtual accounts platform; this is not the typical bolt-on offering but a fully integrated core component. Being multi-currency, our virtual accounts provide users with so much more flexibility, mirroring exactly the functionality of a physical account but with all the virtual account advantages. These include as instant opening and closing of as many virtual accounts as needed, the simplification of reconciliations, and the centralisation of liquidity with virtual pooling structures and releasing trapped cash.

And, as I mentioned, instead of being a separate function bolted on to a legacy platform, as is the norm, in our case, the virtual account platform is the platform. Through this, we’ve effectively created a bank-agnostic payments overlay offering users a single workflow for domestic and cross-border payments, with full transparency around payment status. Here, we leverage not only SWIFT gpi but also a set of additional networks so we can pinpoint the most efficient payment routing.

What’s more, as one of the largest market-makers for foreign exchange [FX] in the world, we’ve automated behind-the-scenes FX at best-in-class pre-agreed pricing. Essentially, we’re making it as easy to pay a supplier on the other side of the world as it is to pay one just around the corner.

EH: As digitisation gathers pace, so cybersecurity rises up the agenda. How are you meeting the requirements of corporate treasurers in this respect?

CW: As part of the new platform, we have rolled out a three-pillar authentication strategy. Firstly, we’ve considered the individual logging in. We can apply credentials through hardware such as device fingerprinting, and then we’ve enhanced client entitlement structures so we can offer simple self-service capabilities and the option to manage their own entitlements and users.

We’ve also introduced multi-factor authentication, having devised ways to deliver it in a digital mobile-first environment. Here, an app can be downloaded, and users can log in with various means of authentication. For push authentication, for example, those that initiate and then need to seek approval for a high-risk transaction – a wire transfer or setting up a new user or new account for example – that authentication can be escalated to the relevant level of seniority. At the sharp end, by pairing the mobile solution with the web solution, we are able to prevent man-in-the-middle attacks, which can happen with traditional hard tokens.

EH: With treasurers increasingly needing to use the best and most timely data, how does the new platform address this?

EV: We can absolutely supply actionable real-time data and analytics. The user experience has been designed to be highly contextual. Depending on data provided in a cash flow forecast, for example, it may present an option to transact – a transfer or sweep, perhaps. Those options may be presented on screen, but actionable options can also be set up as mobile alerts for those on the move.

Another major difference demonstrated through the platform is our approach to data ownership. Unlike common industry practice where it is customary to charge clients for reports and access to their data, we fundamentally believe that the data really does belong to the client; they should not be charged for it. The purpose of the platform’s design is to leverage analytics of real-time data to provide our clients with actionable insights and options, not to look for revenue opportunities around their proprietary data.

EH: You’ve created something fresh and exciting, but how might you specifically take the platform forward, so it keeps meeting client needs?

CW: As we look to evolve the platform, we’re constantly considering how we want to innovate. Whether it be developments within our new digital self-service suite, or our Entity Visualiser product that allows clients to see right across their entity and corporate structure to demonstrate how funds roll up to a master structure, or any other aspect, we’re always looking for tools that will make our clients’ lives easier. Our roadmap over the next 12 to 24 months is focused on global expansion, and we’ll be adding fresh analytics capabilities, and finding new ways for our customers to transact securely and easily.

EH: Do your plans include deeper integration with systems that your clients might already have?

CW: A core part of the integration strategy for our Open Banking team is indeed to think about the different tools that our corporate clients use now, and how we can best integrate with them. We’re even exposing APIs for a wide range of different servicing functions that typically banks would have their team manually do, so that clients don’t necessarily need to log into the banking platform because we can run the pipeline in the background for them.

EH: Finally, how do you see the platform, and Goldman Sachs Transaction Banking, shaping the future of corporate treasury?

EV: In launching the platform, we’ve set out to do something completely disruptive in the industry. There has been dissatisfaction with offerings based on legacy technology and new technology is enabling us to do something fundamentally different. We have late-mover advantage; we’ve never played in this space before and so don’t have a legacy hangover stopping us from building from the ground up and using the latest technology stack. But we also have the Goldman Sachs legacy to build on – so we’re delivering the best of both worlds.

Our plans will continue to evolve, and we will naturally look to expand the platform’s functionality. As Chad mentioned, we’ve launched in the US, and we’re moving into other countries, including UK and Europe in 2021, and we will continue to work with clients to understand their developing needs. We have hundreds of customers on the platform already, and we have an opportunity to do even more to help the corporate treasury profession reach new heights.