Meet the Barclays MD working to transform finance through distributed ledgers and quantum computing

Lee Braine_By Barclays
Dr. Lee Braine, director of research and engineering in Barclays’ Chief Technology Office

Dr. Lee Braine has spent the past seven years working across Barclays’ wealth management, markets, and corporate and investment banking divisions – but his job couldn’t be further from that of your typical City of London broker or trader.

A managing director in the bank’s chief technology office, London-based Braine is responsible for research and engineering across corporate, investment, and retail banking. He has a special focus on distributed ledger technology, like blockchain, as well as quantum computing.

Insider sat down for a virtual chat with Braine – who was named one of Business Insider’s 100 Transformers – to discuss what he’s working on and where the industry is going next.

Transcript has been edited for clarity and length:

Insider: You’re not an average banker. You’re a computer scientist by training. Can you tell me a bit more about your background?

Braine: I have a PhD from University College London in computer science-the particular topic was object-oriented functional programming. I used that research knowledge in banking, and that included, for example, working with financial market infrastructures when I was in my twenties to produce new architectures and new optimization algorithms. In this case, it was for securities settlement. After that, I spent quite a few years working in technology management.

Within Barclays, for these last 7 years, I’ve been working on technology innovation. The typical thing I’ve been working on is responsibility for advanced technologies that Barclays needs to be up to speed on. We work closely with a variety of stakeholders, not just [technology] vendors, but also very closely with official institutions, including central banks, regulators, and the government on the potential of these new technologies, and the risks and any issues that may lie with them.

Insider: Let’s talk about distributed ledgers-you lead Barclays’ efforts there. Why is Barclays interested in distributed ledgers like the blockchain?

Braine: Interest was initially sparked about 5-6 years ago when we were looking at bitcoin from a technology perspective. That means not as an investable asset, but at other interesting, novel technologies underlying bitcoin that could be repurposed in more traditional financial services. There are several features of bitcoin that inspire a different way of working: at the lowest level, there may be things such as consensus algorithms, hashing technique, the chain of blocks-all of those types of low-level technical things that everybody learned about in the last few years from blockchain. But higher up, there are new ways of working, almost new market models that get inspired by cryptocurrency.

For example, currently, financial market infrastructures are centralized financial institutions, and their technology is centralized-they’ve got centralized databases and centralized processing. The decentralized nature of something like bitcoin has inspired people. Could we have a different model of the market? Could we imagine decentralizing, not just the technology, but also some of the rights and obligations of participating in such a network? So to make that abstract idea a bit more concrete: imagine if you’ve got a clearing house, and currently we send all our trades to the clearing house, it performs the processing and sends us back the result. Imagine if, instead, each of the participants formed a network, they operated peer-to-peer, and that peer-to-peer model then gets translated down into the technical solution. So that’s a different way of working-you can call that a distributed financial market infrastructure.

It’s a big infrastructure change to the market-so why bother? What we see is quite a few potential benefits. These include radical simplification and rationalization. Another thread is you’re able to speed up settlement times.

Insider: Tell me about Utility Settlement Coin and the Fnality investment.

Braine: The consortium was originally called Utility Settlement Coin, and then, about 2 years ago, a group of financial institutions – so 14 banks and one exchange – strategically invested to create the new entity, which was Fnality International. They’re building a new payment system, and this is going to offer peer-to-peer settlements using an underlying blockchain platform. The money that moves on it will be one-to-one backed by funds that have been pre-deposited at a central bank, so it’s effectively a pre-funding model. It allows a number of benefits in terms of settlement.

For example, you could continue operating outside of the window when the real time gross settlement-RTGS-is closed at the central bank. You could, for example, connect to other tokenized assets to allow atomic swap between them. If you had Fnality representing the payment leg on a payment blockchain, you could imagine a security leg on a security blockchain and the two of them could do instant settlement with the appropriate interconnect between the two. A key point here is that the money being backed by funds at the central bank means that there’s lower risks associated with such payments.

Insider: You also work with the International Swaps and Derivatives Association (ISDA), right?

Braine: Yes. One of the things we’ve been progressing for a few years relates to a new standard for data and processing, and it’s called the ISDA Common Domain Model. This model effectively provides a standard industry representation for events in the lifecycle of a trade. Currently, each institution builds their own solutions, so effectively, there’s variation in how you code it-some may code in Java and others may code in C++, so different programming languages. They may store the data in different types of databases, and they may enrich the data with extra fields. So you’ve got variation there. Then, over time, each institution must manage and maintain its data stores. So across the industry, the same high-level functionality is implemented slightly differently on slightly different data sets. And each time there’s a lifecycle event, they all need to sync up and reconcile to make sure that, yes, what’s been affected in terms of an event, the before and after, is consistent.

That’s incredibly inefficient as a solution. Imagine we had a browser for the internet, and each bank built their own browser, right? Of course we don’t do that. We have a common browser, Chrome or Internet Explorer, we download it, we use it. So that same philosophy is being applied here. A distributed ledger de facto defines the common data structure that you all must use. And smart contract technology is a common process that they must all follow.

You then start getting the opportunity to transform the industry, and all the participants. And those opportunities don’t come up very often. So I think we’re living in interesting times where this technology is just reaching the right degree of maturity, and there’s also appetite from the market participants to reduce costs.

Insider: Ok, tell me more about smart contracts, which I know you also research.

Braine: There are many, many business processes that could benefit from the rigor and standardization that smart contracts would bring. To give one example, interest rate swaps. So a few years ago, about 4 years ago, my team prototyped an interest rate swap from end to end. Complete end-to-end processing naturally fits with the idea of a smart contract, meaning the data that you construct at the beginning just flows through-you don’t transform it, you don’t switch it into completely different systems.

The way I like to view it is, smart means automatable, and contract means enforceable. Other good use-cases include trade finance, loans, bonds, and syndicated loans. It’s easy to identify 101 use cases for smart contracts; the challenge is identifying viable business cases where the industry can move together in concert, given that these are consortium plays, so you need your peers to be similarly motivated at the same time to grasp at the same propositions.

Insider: What sort of work are you doing in quantum computing?

Braine: Barclays started exploring quantum computing back in summer 2017. We did that by partnering with IBM. We set up a joint development project, and our goal initially was to learn more about quantum computing. It’s a phenomenally complex topic, where even those that have quantitative research backgrounds find it challenging to understand the details.

We decided for our first proof of concept that we would look at a settlement optimization problem. This is a particular challenge where a market infrastructure looks to optimize the settlement of a batch of securities transactions. A typical batch may have 50,000 transactions, you’ve got many potential combinations that you could settle, and you need to work out what is the best combination. It’s a problem that you typically can’t solve perfectly, so you often run an optimization algorithm for long enough in order to solve it well enough, and then you repeat the batch later.

We were inspired by [the question]: could a quantum algorithm on a quantum computer solve that problem perfectly, or perhaps better than the classical ones? We looked at candidate quantum algorithms, we worked with IBM to implement an algorithm, we constructed candidate scenarios to run through test data, and we got the results. The key takeaway is that, for the first time, an algorithm has been run for settling securities transactions on a quantum computer. Obviously, it’s only just test data and very small scale, so it’s more of a proof of concept, but we’ve demonstrated that the proof of concept works.

In terms of next steps, we’re currently exploring quantum machine learning. How many more buzzwords could you get into one conversation, right? We’ve run our first experiment comparing quantum and classical versions, and in the next couple of months, we’ll be looking to publicly release our initial findings.

Insider: In real terms, what benefits might quantum computing bring to Barclays? And when?

Braine: We need to extrapolate for when we think the hardware will be sufficiently mature to be able to run real-world use cases. For perspective, we think that will be in the range of 4-8 years from now.

In terms of the type of benefits, it’s almost like adding a special maths co-processor, and it’s able to perform a number of functions-it’s able to perform an optimization process faster than a traditional classical computer, or it’s able to perform the process and get a higher-quality result. So this could be optimizing which assets you put in a portfolio, or running a number of Monte Carlo optimizations as part of a risk model. These types of things often require huge compute resources.

And that’s why we’re exploring this for research-not because we think it could be perfectly used in the next year or two, but because we’re learning, building a foundation. I would almost call it quantum awareness, where we’re raising our awareness so that we could leverage it when the powerful machines come along in a few years’ time that we could use for real world use cases.

Insider: Where is financial technology going next? How does that fit with traditional banking?

Braine: There are a number of key themes, one being machine learning and artificial intelligence. So the application of that technology, we’ve seen it deployed with fantastic effect, whether that’s search or shopping or similar. There’s great opportunity for those technologies to also be applied within financial services, particularly to further improve the customer experience.

Other key technologies include cloud computing.

Insider: Are you worried about disruption from tech startups?

Disruption is at the heart of my day job. We’re often looking to see what technologies have potential for disruption, and to see how we could leverage or partner with third parties that have such potentially disruptive technologies-and also to understand the risks and potential issues that are associated with them-so that we’re able to have a sensible position in order to be able to advise the business.

Often if we’re going to pick certain technologies, it may well be the case that what’s viewed as a potential disruptor to Barclays could also be viewed as a potential partnership opportunity in terms of optimizing and improving some of our own internal processes.

Read the original article on Business Insider

Goldman Sachs is going through a big transformation under CEO David Solomon

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon.

Goldman Sachs is going through some massive changes under CEO David Solomon.

The Wall Street bank has taken big steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is looking to execute on targets including multi-year cost-cutting plans. And it’s making big pushes into wealth management and consumer banking.

Solomon, who took the reins as CEO in 2018, has also looked to reduce the number of partners overall at the firm to make the status more elite and exclusive. In 2018, there were 484 partners. But as of the newest partner additions, Goldman’s total partners amounted to fewer than 440.

Goldman Sachs reported first-quarter earnings on Wednesday, April 14, and turned in blowout performance on trading and dealmaking. Stephen Scherr, Goldman Sachs’ chief financial officer, said on the earnings call that the firm is increasingly leaning into cloud technology.

“Our new builds are largely, perhaps not exclusively, but largely cloud-based,” he said.

“We’re riveted and focused on doing that so as to eliminate legacy technology,” Scherr added.

Here’s a rundown of the latest news at Goldman, including the latest hires and exits, deep dives on its Marcus consumer bank, and how Goldman investment banking analysts are reacting after a year of rapid-fire deal while WFH.


The lastest news on Goldman’s Marcus

Marcus Goldman Sachs
Marcus offers savings and credit products online and through its app.

Goldman Sachs has built its consumer-banking arm into a $1 billion business over the past five years.

But it’s seen a wave of recent departures including the exits of top Marcus bosses Omer Ismail and David Stark. And JPMorgan has poached the head of product at Marcus to join the bank’s digital and product leadership team for consumer and community banking.

Insiders explained how Goldman Sachs’ hard-charging culture had contributed to exhaustion and high turnover within Marcus, and a Goldman spokesperson told us that the firm is eyeing beefing up the ranks by hiring some 200 to 300 new engineers.

Read more:


Who are the top leaders at Goldman?

Goldman Sachs org chart 2x1

Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

Read more:


Goldman’s junior bankers are feeling the heat

wall street burnout young talent junior analyst 2x1

A grueling year of increased demands while working from home has some Goldman Sachs junior talent reaching a breaking point.

In March, a presentation created by 13 analysts within the firm’s investment bank grabbed headlines. Meanwhile, the bank is prepping its latest cohort of young bankers for a return to in-person work.

Read more:

Goldman’s dealmakers

When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.

The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.

Goldman has also been riding the SPAC boom, which went into overdrive in the first quarter. It ranked No. 2 among banks in terms of SPAC IPOs year-to-date by mid-March.

Read more:

Read the original article on Business Insider

Revolut, the $5.5 billion fintech startup, says it will let its 2,000 staff work abroad for 60 days a year

Revolut's London office.
Staff working in Revolut’s London office.

  • UK fintech Revolut, valued at $5.5 billion, plans to let its more than 2,000 staff work overseas for up to 60 days a year.
  • The policy, announced Thursday, follows demand from staff to work abroad, and is due to roll out once travel restrictions lift.
  • In a survey, Revolut staff said working from home hadn’t reduced their productivity.
  • See more stories on Insider’s business page.

Staff at UK fintech Revolut, one of Europe’s biggest startups, will soon be able to work abroad for up to two months each year, the company said Thursday.

The policy would apply to all of the company’s more than 2,000 employees, it said.

“Revolut staff members who wish to work outside their country of employment for personal and non-business related reasons, will be able to do so for a period of up to 60 calendar days over a rolling 12 months,” Revolut said in a statement shared with Insider.

Bloomberg first reported on the news.

The policy was set to start once COVID-19 travel restrictions are eased, and would comply with guidelines from national health authorities, Revolut said.

Read more: If you want to ask your boss to let you work from home forever, use this script

Revolut, which was valued at $5.5 billion last year, making it the UK’s most valuable fintech, said it designed the policy following requests from staff who wanted to visit family abroad.

“Our employees asked for flexibility and that’s what we’re giving them,” Jim MacDougall, Revolut’s VP of people, said in the statement.

Revolut has faced criticism for the way it treats its staff. A 2019 Wired report into the company’s work culture found high staff turnover and burnout among workers. Some applicants were also asked to work for free, according to the report. Revolut declined to comment at the time on specific points in the report, but said its “culture is evolving as rapidly as our business.”

In February, Revolut piloted a hybrid working model that let staff choose between working from home and in the office, and said it was repurposing all its offices as flexible collaborative spaces.

After a survey of its staff, Revolut said more than one-third wanted an entirely remote job, and just over half wanted to work from home between two and four days a week. Just 2% of staff said they would like to return to the office full-time.

Revolut's London office.
Revolut said its survey found that working from home didn’t affect staff’s ability to work as a team.

It added that 95% of respondents said that working from home either didn’t impact their personal productivity or had a positive impact on it, while the figure was 89% for team collaboration.

There is growing momentum for companies to let employees work from home permanently, leading to some companies canceling office leases.

Google is taking the opposite approach: In March, the tech giant announced plans to invest $7 billion in US offices and data centers, including new offices in Houston, Texas, and Portland, Oregon.

As the COVID-19 vaccine rollout ramps up across the US, some companies are considering making vaccinations mandatory for staff, which the Equal Employment Opportunity Commission says they’re within their rights to do.

Read the original article on Business Insider

Credit Suisse is reportedly weighing the replacement of high-profile executives, including its risk chief, following Greensill and Archegos crises

Credit Suisse
Several Credit Suisse employees are reportedly facing scrutiny.

  • Credit Suisse’s risk chief Lara Warner is at risk of being replaced, Bloomberg reported.
  • The role of Brian Chin, CEO of its investment bank, is also reportedly under scrutiny.
  • Credit Suisse has been involved in both the Archegos and Greensill crashes.
  • See more stories on Insider’s business page.

Leaders at Switzerland-based Credit Suisse are discussing replacing chief risk officer Lara Warner, after the bank was caught up in several high-profile incidents, leading to large potential losses, Bloomberg reported. The outlet cited people briefed on the matter.

Despite chief executive officer Thomas Gottstein’s commitment to a clean slate in 2021, after a previous spying scandal at the bank, Credit Suisse has been one of the worst-performing major bank stocks in 2021.

The recent collapse of Greensill, along with chaos at Archegos, has potentially left investors facing another quarter of losses.

The role of Brian Chin, CEO of Credit Suisse’s investment bank, is also under scrutiny, two of the sources told Bloomberg. They added that the bank is planning a review of its prime brokerage business, which is housed under its investment bank.

Credit Suisse declined to comment.

Credit Suisse
Credit Suisse stock price.

The bank was one of the main lenders to the Softbank-backed Greensill, a supply-chain lender that was recently forced to file for bankruptcy. A $140 million collateralized loan to Greensill is now in default, although $50 million has been recently repaid by administrators, Bloomberg reported.

This is essentially pooled debt that is taken to market via a single security. Investors receive scheduled payments from the loans but assume most of the risk in the event that borrowers default.

The Swiss bank’s asset management unit also ran a $10 billion group of funds with Greensill, which are being wound down.

On Monday, the Swiss firm had $4.8 billion wiped from its market capitalization on Monday. Its shares tumbled as much as 14% when the bank warned it could suffer a major blow to its first-quarter profits after Archegos, a US-based hedge fund liquidated.

It said the losses could be “highly significant and material” to its first-quarter earnings, due next month.

Archegos, the family office of trader Bill Hwang, was forced to liquidate more than $20 billion of leveraged equity positions last week. The fire sale hammered stocks such as ViacomCBS and Baidu, and set off alarms at multiple Wall Street banks.

The bank could face a loss of $3 billion to $4 billion, the Financial Times reported, citing two sources. The top end of that estimate would be almost triple its net income in the first quarter of 2020. From the Archegos trades, the banking sector could take a collective hit of up to $10 billion, JPMorgan analysts have estimated.

Bloomberg noted that this is only adding to the scrutiny on management, after several other miscues at the investment bank and beyond, including exposure to the Luckin Coffee Inc. fraud.

Gottstein is expected to remain CEO, the people told Bloomberg.

The latest issues for the bank could also put its planned share buyback at risk, potentially pausing it for a second time, Bloomberg reported, as losses could threaten the bank’s dividend distribution.

Credit Suisse declined to comment on the potential fallout of the trades.

Read the original article on Business Insider

Jack Dorsey’s Square kickstarts in-house banking services nearly a year after receiving conditional approval

Screenshot 2021 03 02 at 11.03.56

Digital payments processor Square said on Monday it has launched in-house banking operations after completing the approval process with a US insurance agency and Utah’s financial regulator.

Square Financial Services, the industrial bank based in Utah’s Salt Lake City, is now ready for business after receiving conditional approval nearly a year ago.

“Moving forward, Square Financial Services will be the primary provider of financing for Square sellers across the US,” the company said in a statement.

The first few actions for the bank will include underwriting and offering business loans for Square’s existing lending product. Its primary purpose is to offer business loans and deposit products.

“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved,” Square CFO Amrita Ahuja said.

Square is headed by longtime cryptocurrency advocate Jack Dorsey, who is also chief executive of social media platform Twitter. With a product line that includes the Cash App and Square Point-of-Sale, the company is known for its easy-to-use mobile payment services.

Shares in the company rose 3% to $248.80 in pre-market trading on Tuesday.

Read the original article on Business Insider

Goldman Sachs is losing 2 consumer banking execs to Walmart. Here’s a look at how the powerhouse Wall Street bank has been making a Main Street push.

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon.

Goldman Sachs has been going through some massive changes under CEO David Solomon.

It’s taken big steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is looking to execute on targets including multi-year cost-cutting plans. And it’s making big pushes into businesses like wealth management and consumer banking

Now, the elite Wall Street bank is finally launching its do-it-yourself wealth management offering to the public, marking a milestone in the elite firm’s quest to appeal to Main Street.  Goldman rolled out Marcus Invest, its automated investment tool with a $1,000 account minimum, in February after having previously faced delays.

But its consumer banking arm is losing two key execs: Omer Ismail, a partner at the firm and the head of Goldman’s consumer bank, and David Stark, one of his top deputies, are both heading to Walmart to work on a new fintech venture. 

Solomon, who took the reins as CEO in 2018, has also looked to reduce the number of partners overall at the firm in order to make the status more elite and exclusive. In 2018, there were 484 partners. But as of the latest announcement of the newest partner additions, Goldman’s total partners amounted to fewer than 440. 

Meanwhile, the upper echelons of one of Goldman Sachs’ most prestigious businesses, its investment banking division, has seen some high-profile exits in recent months. 

Who are the top leaders at Goldman?

Goldman Sachs org chart 2x1

Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.

The change eliminated the former consumer and investment management division, which held the consumer business and the asset-management unit known as Goldman Sachs asset management.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

Read more:

Consumer banking; wealth and asset management 

In Goldman Sachs’s quest to move down-market, part of its wealth management division is preparing to expand by hiring dozens of financial advisors. Goldman has been on a quest to manage money for clients less wealthy than the multi-millionaires to whom the bank has long catered. 

Goldman launched Marcus, a digital-only consumer bank, in 2016. And in 2019, it took the plunge into the consumer credit-card business by teaming up with Apple to launch both brands’ first consumer credit-card offering. Amazon has partnered with Goldman Sachs to offer loans to its merchants. And Stripe is partnering with banks including Goldman Sachs and Citi to offer business-banking services. 

The Wall Street bank in January named two executives to spearhead a newly formed group devoted to consumer and wealth-specific strategy and acquisitions.  Jemma Wolfe and Stephan Lambert will head up the new team, according to an internal memo seen by Insider. It also tapped six people to lead product development for the consumer and wealth group. 

And Swati Bhatia, a former Stripe exec, is joining as a partner to lead Goldman’s direct-to-consumer strategy. Bhatia was most recently the chief payments risk officer at Stripe, the online payments startup last valued at $36 billion.  Meanwhile, David Stark, a partner at Goldman that helped lead the Apple Card launch and the firm’s purchase of General Motors’ credit-card business, was tapped to take over responsibility for large partnerships within the consumer business. 

Bhatia and Stark were set to report to Omer Ismail, partner and head of Goldman’s consumer business. But as Bloomberg first reported this weekend, Ismail and Stark are now leaving the bank to join Walmart and work on its venture into financial services. 

Read more: 

Dealmakers 

When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.

Goldman Sachs’ entire investment-banking business ranks number one in mergers and acquisitions and bookrunning for equity capital markets, according to Dealogic

Goldman has worked on some of the hottest IPOs of 2020, including DoorDash. It’s also got a pipeline of big names lined up for this year – as Business Insider first reported, the bank has been tapped to lead cryptocurrency exchange Coinbase’s planned offering. 

The firm also played a role in massive debt financings for travel-related companies during the coronavirus pandemic. One of the solutions was a first-of-its-kind deal helping United raise $6.8 billion in debt in June by leveraging its frequent flyer program. 

The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.

In February, Susie Scher, previously co-head of global financing, was named chairman of Goldman’s global financing group. Scher is a member of the firm’s partnership committee and its executive committee for the investment-banking division. Vivek Bantwal, who was previously the chief operating officer of the global markets division, is returning to the investment bank to assume the role vacated by Scher. 

Read more: 

Recent news on exits from Goldman Sachs

Ram Sundaram, the head of currencies and emerging-markets business at Goldman Sachs, is planning to exit the firm. Sundaram is a Goldman partner who was closely involved in the design and sale of the trades the bank did for the Malaysia development fund known as 1MDB. The bank reached a $3.9 billion settlement last year over its role in the trades. Sundaram has never been implicated in the scandal. 

Last June, Sundaram solidified his position as a senior leader in Goldman’s mighty markets division when a colleague’s departure made him the only executive running the emerging-markets and currencies business.

And markets division chairman Michael Daffey is leaving the bank after a 28-year career. Daffey has long been known for managing some of Goldman’s most important hedge fund clients, a role he was freed up to do last September when Solomon tapped him to become the chairman of the markets division. Prior to that, Daffey was the global co-COO of the equities business.

Read more:

What’s next for Goldman Sachs

Goldman Sachs itself is reportedly considering plans to shift asset management operations out of New York, where its headquarters tower over West Street in Manhattan’s financial district, to South Florida. Goldman’s move is not a done deal, but the reported plans echoed other New York-based firms’ recent moves.

And overall, Goldman is forging ahead with plans to divert more employees out of traditional banking capitals like New York, London, and Hong Kong to lower-cost cities including Salt Lake City, Dallas, and Bangalore, India.

Goldman’s relocation efforts are part of a broader strategy laid out at the bank’s investor day last January, which is directed at slashing $1.3 billion in costs over the course of three years.

Read more: 

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Walmart has reportedly lured away two Goldman Sachs bankers to help lead its new fintech venture

walmart store shoppers
  • Walmart has reportedly poached two Goldman Sachs bankers to help it run its new fintech venture.
  • The retailer announced a partnership with Ribbit Capital to offer financial products in January.
  • Walmart’s latest move represents a commitment to forging a path in the financial world.
  • Visit the Business section of Insider for more stories.

As Walmart looks to launch a fintech startup, the retailer is turning to Wall Street veterans to help it move into the banking world.

Walmart Inc. has picked up two senior bankers from Goldman Sachs to help lead the retailer’s new fintech startup arm, Bloomberg reported on Sunday. Omer Ismail, the head of Goldman’s consumer bank, and David Stark, one of his top lieutenants, will leave the bank to help bolster Walmart’s venture into financial services with investment firm Ribbit Capital, people familiar with the matter told Bloomberg. The departure of Ismail, who runs Marcus, was a “surprise,” the sources told Bloomberg. 

Walmart announced earlier this year that it was partnering with Ribbit Capital, the firm backing fintech startups such as Robinhood, Affirm, and Credit Karma, to offer financial products for customers and employees. The startup, which has yet to be publicly named, will be mostly owned by Walmart and will include several Walmart executives on its board.

Customers have “made it clear they want more from us in the financial services arena,” president and CEO of Walmart US John Furner said previously in a statement. Walmart’s current financial service offerings include the Walmart CapitalOne credit card, the prepaid Walmart MoneyCard, and the ability for people to cash checks in stores.

“Walmart’s newly-announced fintech joint venture with Ribbit Capital will provide myriad growth opportunities, with the leveraging of its massive customer base at the center of the initiative,” Moody’s Vice-President and Senior Credit Officer Charlie O’Shea, said in a note to investors, Insider reported previously. “Walmart has been slowly and tactically expanding its financial service offerings to its customers, and measured expansion of these capabilities makes sense as it will deepen these all-important customer relationships.”

Walmart’s latest move represents a commitment to forging a path in the financial world. The retailer could also possibly have an advantage by eventually using its thousands of stores to market its new product and display advertisements to a large array of customers. 

In February, Walmart reported $152.1 billion in total sales, up over 7.3% year over year.

Walmart and Goldman Sachs did not immediately respond to Insider’s request for comment.

Read the original article on Business Insider

Wall Street powerhouse Goldman Sachs is going through a massive transformation under CEO David Solomon

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon.

Goldman Sachs has been going through some massive changes under CEO David Solomon.

It’s taken big steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is looking to execute on targets including multi-year cost-cutting plans. And it’s making big pushes into businesses like wealth management and consumer banking

Now, the elite Wall Street bank is finally launching its do-it-yourself wealth management offering to the public, marking a milestone in the elite firm’s quest to appeal to Main Street.  Goldman rolled out Marcus Invest, its automated investment tool with a $1,000 account minimum, in February after having previously faced delays.

Solomon, who took the reins as CEO in 2018, has also looked to reduce the number of partners at the firm in order to make the status more elite and exclusive. In 2018, there were 484 partners. But as of the latest announcement of the newest partner additions, Goldman’s total partners amounted to fewer than 440. 

Meanwhile, the upper echelons of one of Goldman Sachs’ most prestigious businesses, its investment banking division, has seen some high-profile exits in recent months. 

Like all Wall Street firms, Goldman has found itself in an unprecedented era of remote work. But Solomon still sees lots of value in in-person face time – particularly for people just starting out their careers

“This is not a new normal,” Solomon said while speaking at a conference this week, adding that the nature of remote work was in conflict with his firm’s “innovative, collaborative, apprenticeship culture.”

“I don’t want another class of young people arriving at Goldman Sachs in the summer remotely,” he said. A representative for Goldman Sachs told Insider that the firm had yet to make a determination as to whether its 2021 program would be remote, in person, or a hybrid of the two. 

 

Who are the top leaders at Goldman?

Goldman Sachs org chart 2x1

Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.

The change eliminated the former consumer and investment management division, which held the consumer business and the asset-management unit known as Goldman Sachs asset management.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

Read more:

Wealth management, asset management, and consumer banking

In Goldman Sachs’s quest to move down-market, part of its wealth management division is preparing to expand by hiring dozens of financial advisors.

Goldman has been on a quest to manage money for clients less wealthy than the multi-millionaires to whom the bank has long catered. 

Goldman launched Marcus, a digital-only consumer bank, in 2016. And in 2019, it took the plunge into the consumer credit-card business by teaming up with Apple to launch both brands’ first consumer credit-card offering. Amazon has partnered with Goldman Sachs to offer loans to its merchants. And Stripe is partnering with banks including Goldman Sachs and Citi to offer business-banking services. 

The Wall Street bank in January named two executives to spearhead a newly formed group devoted to consumer and wealth-specific strategy and acquisitions.  Jemma Wolfe and Stephan Lambert will head up the new team, according to an internal memo seen by Insider. It also tapped six people to lead product development for the consumer and wealth group. 

And Swati Bhatia, a former Stripe exec, is joining as a partner to lead Goldman’s direct-to-consumer strategy. Bhatia was most recently the chief payments risk officer at Stripe, the online payments startup last valued at $36 billion

Read more: 

Dealmakers 

When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.

Goldman Sachs’ entire investment-banking business ranks number one in mergers and acquisitions and bookrunning for equity capital markets, according to Dealogic

Goldman has worked on some of the hottest IPOs of 2020, including DoorDash. It’s also got a pipeline of big names lined up for this year – as Business Insider first reported, the bank has been tapped to lead cryptocurrency exchange Coinbase’s planned offering. 

The firm also played a role in massive debt financings for travel-related companies during the coronavirus pandemic. One of the solutions was a first-of-its-kind deal helping United raise $6.8 billion in debt in June by leveraging its frequent flyer program. 

The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.

In February, Susie Scher, previously co-head of global financing, was named chairman of Goldman’s global financing group. Scher is a member of the firm’s partnership committee and its executive committee for the investment-banking division. Vivek Bantwal, who was previously the chief operating officer of the global markets division, is returning to the investment bank to assume the role vacated by Scher. 

Read more: 

Recent news on exits from Goldman Sachs

Ram Sundaram, the head of currencies and emerging-markets business at Goldman Sachs, is planning to exit the firm. Sundaram is a Goldman partner who was closely involved in the design and sale of the trades the bank did for the Malaysia development fund known as 1MDB. The bank reached a $3.9 billion settlement last year over its role in the trades. Sundaram has never been implicated in the scandal. 

Last June, Sundaram solidified his position as a senior leader in Goldman’s mighty markets division when a colleague’s departure made him the only executive running the emerging-markets and currencies business.

And markets division chairman Michael Daffey is leaving the bank after a 28-year career. Daffey has long been known for managing some of Goldman’s most important hedge fund clients, a role he was freed up to do last September when Solomon tapped him to become the chairman of the markets division. Prior to that, Daffey was the global co-COO of the equities business.

Read more:

What’s next for Goldman Sachs

Goldman Sachs itself is reportedly considering plans to shift asset management operations out of New York, where its headquarters tower over West Street in Manhattan’s financial district, to South Florida. Goldman’s move is not a done deal, but the reported plans echoed other New York-based firms’ recent moves.

And overall, Goldman is forging ahead with plans to divert more employees out of traditional banking capitals like New York, London, and Hong Kong to lower-cost cities including Salt Lake City, Dallas, and Bangalore, India.

Goldman’s relocation efforts are part of a broader strategy laid out at the bank’s investor day last January, which is directed at slashing $1.3 billion in costs over the course of three years.

Read more: 

Read the original article on Business Insider

Inside a massive transformation at Goldman Sachs

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon.

Goldman Sachs has been going through some massive changes under CEO David Solomon.

It’s taken big steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is looking to execute on targets including multi-year cost-cutting plans. And it’s making big pushes into businesses like wealth management and consumer banking

Now, the elite Wall Street bank is finally launching its do-it-yourself wealth management offering to the public, marking a milestone in the elite firm’s quest to appeal to Main Street.  Goldman rolled out Marcus Invest, its automated investment tool with a $1,000 account minimum, on Tuesday after having previously faced delays.

Solomon, who took the reins as CEO in 2018, has also looked to reduce the number of partners at the firm in order to make the status more elite and exclusive. In 2018, there were 484 partners. But as of the latest announcement of the newest partner additions, Goldman’s total partners amounted to fewer than 440. 

Meanwhile, the upper echelons of one of Goldman Sachs’ most prestigious businesses, its investment banking division, has seen some high-profile exits in recent months. 

Who are the top leaders at Goldman?

Goldman Sachs org chart 2x1

Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.

The change eliminated the former consumer and investment management division, which held the consumer business and the asset-management unit known as Goldman Sachs asset management.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

Read more:

Wealth management, asset management, and consumer banking

In Goldman Sachs’s quest to move down-market, part of its wealth management division is preparing to expand by hiring dozens of financial advisors.

Goldman has been on a quest to manage money for clients less wealthy than the multi-millionaires to whom the bank has long catered. 

Goldman launched Marcus, a digital-only consumer bank, in 2016. And in 2019, it took the plunge into the consumer credit-card business by teaming up with Apple to launch both brands’ first consumer credit-card offering. Amazon has partnered with Goldman Sachs to offer loans to its merchants. And Stripe is partnering with banks including Goldman Sachs and Citi to offer business-banking services. 

The Wall Street bank in January named two executives to spearhead a newly formed group devoted to consumer and wealth-specific strategy and acquisitions.  Jemma Wolfe and Stephan Lambert will head up the new team, according to an internal memo seen by Insider. It also tapped six people to lead product development for the consumer and wealth group. 

And Swati Bhatia, a former Stripe exec, is joining as a partner to lead Goldman’s direct-to-consumer strategy. Bhatia was most recently the chief payments risk officer at Stripe, the online payments startup last valued at $36 billion

Read more: 

Dealmakers 

When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.

Goldman Sachs’ entire investment-banking business ranks number one in mergers and acquisitions and bookrunning for equity capital markets, according to Dealogic

Goldman has worked on some of the hottest IPOs of 2020, including DoorDash. It’s also got a pipeline of big names lined up for this year – as Business Insider first reported, the bank has been tapped to lead cryptocurrency exchange Coinbase’s planned offering. 

The firm also played a role in massive debt financings for travel-related companies during the coronavirus pandemic. One of the solutions was a first-of-its-kind deal helping United raise $6.8 billion in debt in June by leveraging its frequent flyer program. 

The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.

In February, Susie Scher, previously co-head of global financing, was named chairman of Goldman’s global financing group. Scher is a member of the firm’s partnership committee and its executive committee for the investment-banking division. Vivek Bantwal, who was previously the chief operating officer of the global markets division, is returning to the investment bank to assume the role vacated by Scher. 

Read more: 

Recent news on exits from Goldman Sachs

Ram Sundaram, the head of currencies and emerging-markets business at Goldman Sachs, is planning to exit the firm. Sundaram is a Goldman partner who was closely involved in the design and sale of the trades the bank did for the Malaysia development fund known as 1MDB. The bank reached a $3.9 billion settlement last year over its role in the trades. Sundaram has never been implicated in the scandal. 

Last June, Sundaram solidified his position as a senior leader in Goldman’s mighty markets division when a colleague’s departure made him the only executive running the emerging-markets and currencies business.

And markets division chairman Michael Daffey is leaving the bank after a 28-year career. Daffey has long been known for managing some of Goldman’s most important hedge fund clients, a role he was freed up to do last September when Solomon tapped him to become the chairman of the markets division. Prior to that, Daffey was the global co-COO of the equities business.

Read more:

What’s next for Goldman Sachs

Goldman Sachs itself is reportedly considering plans to shift asset management operations out of New York, where its headquarters tower over West Street in Manhattan’s financial district, to South Florida. Goldman’s move is not a done deal, but the reported plans echoed other New York-based firms’ recent moves.

And overall, Goldman is forging ahead with plans to divert more employees out of traditional banking capitals like New York, London, and Hong Kong to lower-cost cities including Salt Lake City, Dallas, and Bangalore, India.

Goldman’s relocation efforts are part of a broader strategy laid out at the bank’s investor day last January, which is directed at slashing $1.3 billion in costs over the course of three years.

Read more: 

Read the original article on Business Insider

Robinhood is reportedly borrowing at least ‘several hundred million dollars’ from banks amid GameStop trading frenzy

robinhood gamification trading app 4x3
  • Robinhood is drawing on credit lines from its lenders, Bloomberg reported Thursday.
  • The trading app is tapping into “at least several hundred million dollars,” according to Bloomberg.
  • Robinhood is popular among the retail investors behind this week’s market frenzy involving GameStop.
  • Visit Business Insider’s homepage for more stories.

Robinhood is drawing down lines of credit to the tune of “at least several hundred million dollars,” Bloomberg reported Thursday.

The quick decision to seek additional funds from its lenders, which include JPMorgan Chase and Goldman Sachs, suggest that this week’s trading frenzy has put a strain on the company, according to Bloomberg’s Matthew Monks and Michelle Davis. 

Robinhood did not respond to a request for comment on this story.

The trading app is popular among the online community r/WallStreetBets, a group of mostly retail investors who sparked massive market swings by targeting short sellers’ positions in companies including GameStop, AMC Theaters, and Nokia.

Read more: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped tank Melvin Capital’s short positions

The high volatility prompted Robinhood and other brokerage firms to temporarily halt trading of those shares.

In an email to users, Robinhood attributed the company’s decision to restrict trading to having to comply with financial requirements including SEC net capital obligations and clearinghouse deposits, that it said protected investors and the stock market. 

Read more: Robinhood user launches class-action suit against the trading app hours after it blocked purchases of GameStop

But the move sparked outrage from customers, the broader retail investor community, several progressive lawmakers including Reps. Alexandria Ocasio-Cortez and Ro Khanna, regulators, and even Elon Musk, a popular figure among r/WallStreetBets members.

Democrats in Congress have said they will hold at least two hearings about Wall Street’s practices following the GameStop short-squeeze.

Read more: One chart shows how 3 GameStop shareholders gained nearly $4 billion in a week

Robinhood has tapped its credit lines during periods of market volatility in the past. In March 2020, it maxed out its credit lines during wild market swings in the early stages of the COVID-19 pandemic. 

Read the original article on Business Insider