Goldman Sachs brings in AmEx to upgrade digital cash management

Goldman Sachs, one of the largest investment banking enterprises in the US and the world, is partnering with American Express to upgrade its digital cash management offering, according to CNBC.

The partnership is set to integrate AmEx’s virtual card technology into Goldman Sachs’ platform and automate the process of sorting and paying bills. It will also give both firms’ customers a more complete view of their payment structures across corporate cards and commercial banking, according to Business Insider.

The move is important for Goldman, which has been growing its cash management business in an attempt to handle retail banking.

“This [is] a one-stop solution to a highly fragmented business-to-business payments landscape for large corporates. It lets CFOs and treasurers have better financial planning because now you have a seamless way to track the flow of funds, irrespective of the payment rails used,” Goldman Sach’s global head of transaction Hari Moorthy banking told CNBC.

Goldman Sachs’ retail banking initiative is part of a larger plan to add more stable sources of revenue, with transaction banking already beginning to play a more important part in its business.

This portion deals with holding client companies’ deposits and helping them to make payments, and Goldman reports it already reached $50 billion in deposits in the third quarter of 2021, years ahead of its target, according to Goldman Sachs’ CEO David Solomon.

This partnership further expands on this gameplan for the investment bank, as it works to digitize and improve its systems to gain an advantage over competitors still using legacy technology.

“These large companies in the Fortune 250 are dealing with big banks that tend to have legacy, more fragmented solutions that don’t provide the capabilities that Goldman Sachs and American Express can provide,” AmEx EVP of global commercial services Dean Henry told CNBC.

The two companies are also using the project, which took approximately nine months to complete, as a way to accelerate their growth to the point they can compete with upcoming fintech challengers.

Those signing up for Goldman’s retail banking technology will be less likely to move to a competitor, such as Brex and Ramp, who have been steadily taking customers from AmEx according to the report, and will help to stave off any movement from existing customers who are looking for digital cash management solutions.

“There are fintechs attempting this style of solution, but American Express and Goldman Sachs have the brand, the trust and the balance sheet to really help these big companies, and that’s what fintechs don’t have,” Henry said.

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