In this clip from "The Future of Fintech" on Motley Fool Live, recorded on Feb. 10, Motley Fool contributors Matt Frankel and Jason Hall discuss why they think Goldman Sachs (GS -0.78%) has underappreciated potential in its consumer banking business and how its brand name gives it an edge among the competition.
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Matt Frankel: What are your thoughts on Goldman Sachs and Marcus? I would argue that Marcus is SoFi's (SOFI 3.88%) biggest direct competitor in the sense that they are an online bank. They can offer checking and savings products. They offer investment products. They offer credit cards. They're Apple's (AAPL 0.71%) credit card partner. They are an actual bank and have been since the 1800s. I think Goldman has very underappreciated consumer banking potential. I've written about this many times. It's a very small percentage of their revenue right now. Most of it is still their core investment banking business. I think Goldman Sachs has a lot of potential to be one of the big banks in 10 years or so because they are the only company that has the combination of a brand name like Goldman Sachs, which is synonymous with money. They're one of the most valuable brands other than like Visa (V -0.30%) and MasterCard (MA -0.54%) and the entire financial sector. They have that brand name and they don't have a legacy branch infrastructure they have to deal with like Bank of America (BAC -1.27%) or Wells Fargo (WFC -0.71%)does. They are the only company with that combination right now. Guys, any thoughts on Goldman?
Jason Hall: I think you're mostly right. The more they can continue to build up that consumer banking business, the stronger they're going to be because that core investment banking business, it's a cyclical business and it's going to have its ups and downs. It'll be interesting to see, as the interest rate environment changes and deal-making changes as cost-of-capital change, how it affects their results. I think it's smart that they're looking to build a consumer banking business.