Feb 5, 2020, 11:04 AM ETConference Presentation, Earnings Call, Keynote

Innovation - Goldman Sachs 2020 Investor Day

Marco Argenti, former co-CIO of Goldman Sachs and ex-AWS leader, has joined to lead technology transformation, citing a decade of disruption from mobile (2000s), apps (2008), and cloud (2013) as precursors to the current financial services disruption.
Argenti predicts that regulatory complexity, automated transactions, and exponential data growth will force companies to scale technology investments to remain competitive.
The firm aims to emulate the "generic cloud" evolution by establishing "vertical cloud" providers tailored specifically to the financial industry.
Three critical priorities were defined to lead this transformation:
- Building on existing services like Marquee, Apple Card, and transaction banking to create a firm-wide platform.
- Externalizing these services to drive durable, fee-based revenue.
- Treating developers as "first-class citizens" to ensure a superior developer experience across all outputs.

Stephanie Cohen, Chief Strategy Officer, emphasized that innovation is a core value and execution driver, not an afterthought.
Goldman Sachs leverages deep relationships with over 100 pre-IPO companies, including Diligence Vault, GitLab, and Carta, providing access to cutting-edge technology and driving returns in asset management.
The firm employs a "dynamic framework" for opportunity assessment, deciding whether to buy, build, partner, or invest, often utilizing a combination of all four.
Consumer business logic is currently only 30% coded internally, a strategic shift from building everything in-house to focusing engineering talent on differentiated capabilities rather than commodity infrastructure.
Specific execution examples include:
- Savings: Acquiring the GE deposit platform and supplementing it with organic growth to reach $60 billion in global digital retail deposits from a near-zero base three years ago.
- Loans: Partnering with Intuit for distribution and embedding services into ecosystems like the Apple Card.
- Global Markets: Developing a quantitative trading platform operating in over 50 global markets, covering swaps and cash, and integrating prime risk.
- Platform Adoption: 30% of volumes on the quantitative trading platform are currently generated by external broker-dealers, with regional competitors utilizing the infrastructure.

The "Financial Cloud" strategy involves breaking monolithic internal systems into modular building blocks (APIs) that clients can consume via browsers, digital portals, or embedded integrations.
This approach expands client touchpoints from one (sales team) to three (traditional sales, digital portal, and embedded APIs).
APIs are positioned as "customer service for computers," with the explicit goal of enabling developers to embed Goldman Sachs services directly into client workflows.
Marquee serves as the primary example, offering data, pricing, models, and risk analytics via both browser interfaces and APIs.
The strategy aims to unlock intellectual property by using the firm as its own first customer to refine user experience before external deployment.
Expected outcomes include durable fee-based revenue, scale advantages, and a self-reinforcing flywheel that improves the platform over time.

Goldman Sachs asserts it is uniquely positioned to lead the financial services transformation due to its heritage in equity markets and superior talent in trading, sales, engineering, and operations.
Argenti notes that few players globally can invest in and maintain a comprehensive equities trading platform, highlighting a significant barrier to entry for competitors.
The firm intends to remove "heavy lifting" from clients, allowing them to focus on core business operations while leveraging bank-grade, compliant technology.
Leadership committed to hiring engineers from top tech companies to enhance service quality and maintain the competitive edge in developer experience.