Salute the New Age

Legacy-free Transaction Banking at Goldman Sachs

A consumer-grade experience is at the heart of Goldman Sachs’ first ever transaction banking platform. It’s a bold new venture, but the bank’s digital-first agenda has given it a flying start – worthy of TMI’s 2020 New Technology Innovation Solution Award.

When Goldman Sachs announced that it was entering the global transaction banking arena, anticipation among the treasury community ramped up a notch. Not least when the bank revealed it would be offering a ground-up digital build, having called upon a “cognitively diverse” global development team to respond to the escalating needs of its corporate clients.

Time will tell if Goldman Sachs’ Transaction Banking (TxB) will change the playing field for corporate treasurers, as the bank hopes it will. But the TMI Awards judges unanimously agree that the solution is the worthy winner of the New Technology Innovation Solution category for 2020.

As a newcomer to transaction banking, but an established and well-respected financial institution, Goldman Sachs is uniquely positioned to launch this product. It leverages more than 150 years of financial and risk management expertise, being totally unencumbered by legacy transaction banking infrastructure. Without that baggage, the bank has been able to adhere to the driving notions of agility and client-centricity, delivering a fully configurable experience that gives treasurers control over a full suite of products from a single, central, streamlined and transparent platform.

Digital first

Goldman Sachs describes its ‘banking-as-a-service’ platform as a legacy-free application programming interface (API) solution, having built it from the ground up to a strict digital-first agenda. The platform aims to leverage the advantages of Open Banking, seeing this as a catalyst for a wealth of new products and services to be delivered by software partners.

Indeed, Chad Wallace, Global Head of Digital Product & Design, Transaction Banking, Goldman Sachs, says the platform will enable partners to offer a “consumer-grade experience” for their clients, and treasury workstations and enterprise resource planners (ERPs) to deliver integrated solutions to treasurers.

The platform itself is the result of many conversations over several years with corporate treasury clients, many citing dissatisfaction with existing systems. Goldman Sachs listened, then embarked on a two-year journey to build a modern transaction banking platform.

The rapidity of its progress was unprecedented, but it had set the course fair. Operating under a Global Head of Transaction Banking, teams from Strategy, Engineering, Operations, Product, and Sales were united under a single leader, enabling easier communication and quicker decision-making. The teams began by developing a product delivery roadmap, deploying agile methodology that prioritises quality and speedy delivery.

The focused effort culminated in the launch in June 2020 of Goldman Sachs TxB, a suite of payments, liquidity, analytics, and escrow products. In addition to its enhanced analytics, and deposit account options with varying yield and liquidity backed by Goldman Sachs Bank USA, TxB also incorporates a unique Virtual Integrated Accounts (VIA) concept, the first platform ever to do so.

Among other key features, TxB’s platform offers domestic and international payments from a single centralised solution, with real-time payment tracking and intelligent routing. It also provides intelligent cash concentration, using rule-based sweeps for additional yield on excess corporate cash. 

Keeping things clear

“Simplicity, transparency and savings” are cited as key customer benefits of TxB. Simplicity is derived from the “consumer-grade user experience”, based on “human-centred” design. For payments, for example, a single workflow is usable for all transactions, whether local or international. 

Transparency comes from the robust data made available to clients. As well as full payment tracking, for pricing, for example, analytics and reports are generated and published on client dashboards.

Both time and money savings can be made by users with, for example, streamlined processes, and competitive foreign exchange (FX) rates and transaction fees, respectively. In fact, for FX payments, no transaction fees are charged, whereas the industry standard is to levy lifting fees, drawdown fees, access fees, connectivity fees, and access fees. TxB’s Virtual Integrated Accounts (VIA) set-up also allows clients to operate via one physical account, opening virtual accounts for all other global entities. This creates potential for significant process and cost efficiencies.

Ease and simplicity

According to Eduardo Vergara, Global Head of Product and Sales, Transaction Banking, Goldman Sachs, the bank’s in-depth conversations with100+ clients before entering this space revealed a level of frustration with current products and offerings. “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,” he explains.

“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.”

Goldman Sachs has delivered a solution that meets the demands put forward by its panel of clients and various partners. TMI salutes the bank’s bold disruptive efforts, presenting it with the well-earned 2020 Award for New Technology Innovation Solution.