What's going on?

Goldman Sachs plans to further its push into retail banking by offering people in the UK bank accounts beginning next year (according to an interview between a senior Goldman executive and the Financial Times).

What does this mean?

During the financial crisis, Goldman Sachs shifted its official status to a �bank holding company�, meaning it could start taking deposits from people � partly in order to give it a new source of funding (the same way high street banks use money from customers� bank accounts to give out loans). Fast forward to eighteen months ago and the firm was preparing for its first foray into US retail banking. First came the acquisitions of an online deposit platform and an online retirement savings platform before the US launch of its online lender �Marcus� in October 2016. Now, Goldman Sachs is aiming to launch a deposit-taking bank in the UK under the Marcus brand.

Why should I care?

For the stock: Retail banking could become a significant source of revenue and make Goldman Sachs� business model less vulnerable.

Goldman Sachs� traditional money-making divisions, like trading, have been unpredictable and performing poorly recently. Taking deposits from people and giving out loans, which is a relatively straightforward business, makes its business model more secure when its riskier business lines aren�t doing as well. Marcus has shown promising signs, already issuing over $1 billion in loans in the US.

The bigger picture: The growing digital banking industry is attracting traditional banks.

While Goldman Sachs will begin with taking deposits in the UK, the executive said that over time it may also lend money to UK consumers via Marcus (as it is already doing in the US). Goldman Sachs is not the only bank responding with digital initiatives in Europe � recently RBS and Santander made similar moves, putting major banks in competition with the likes of online lenders Lending Club and Zopa. Big banks may have the resources, credibility and existing user base to compete in this area, but their ability to streamline the digital infrastructure and processes required will be put to the test.