Goldman Sachs is making it easier to plug its services into other tech platforms like Amazon or Apple’s iPhone, and an industry consultant says it shows how the bank is leading a `fundamental change’ in retail banking.

  • is in talks with about providing small- to merchants who sell on Amazon’s platform, according to a person with of them. The talks were reported by the on Monday. 
  • The partnership would be the second by Goldman with a large firm that can provide the scale and distribution for Goldman’s products that it can’t get itself. 
  • The partnership, and another one with , is an example of -as-a-service, though some insiders have taken to calling it Goldman Sachs-as-a-service. 
  • “If Goldman can pull off an embedded banking deal somewhere else besides Apple Pay … that’s a leading indicator of a fundamental change in retail banking,” according to independent Richard Crone.

Goldman Sachs is close to inking a second high-profile deal to offer banking services in partnership with a large , and it’s a sign of what be a fundamental change in retail banking. 

Goldman is in talks with Amazon to offer loans to merchants who sell products on Amazon, according to a person with knowledge of the . The Times first reported the Monday. Goldman’s small business loans may feature the ’s name and begin as as March, the newspaper said. 

A for the bank declined to comment. 

If the deal is signed, it would become the second Big Tech partnership for Goldman Sachs after it launched a card last year with Apple last year. Goldman has called the the most successful launch of , without providing details to back up the claim. 

But it would also be a sign of something much more ambitious: Goldman Sachs quickly and aggressively to leverage those characteristics that make it uniquely a bank, with a license that allows it to offer banking products and a balance sheet where it can fund loans cheaply being just two prominent examples. 

The company has been sinking hundreds of millions of dollars into building out its technology capabilities, including (application interfaces), to make it as easy and seamless to plug such services into the technology of others, whether that’s Apple’s , as with the Apple Card, or Amazon’s retail platform. 

At an investor day last week, execs referred to it as banking-as-a-service, but some insiders have taken to calling it Goldman Sachs-as-a-service. 

Stephanie , Goldman’s strategy , appeared on last week at the bank’s investor day alongside Marco Argenti, the co- officer who recently joined the bank after several years as a senior exec at .

Cohen said the bank is looking for ways to to embed the types of that Goldman can do well, such as , or loan underwriting.

Cohen cited the Apple Card, which is a Goldman-designed delivered on Apple’s devices, as one such example. 

“That last capability is the version of our platform strategy,” Cohen said. “It allows to take products and services that we build for our own clients and then give it to clients so that they can embed financial products into their ecosystem. This strategy drive top-line , and it will create scale efficiencies.”

Goldman isn’t the only large bank that’s working with Big Tech . In November, announced a partnership with Citigroup to provide checking accounts to the tech firm’s customers. 

And yet, Goldman is probably doing it better than anyone because it has developed a suite of APIs that it can take off the shelf and plug into other platforms, according to Richard Crone, an independent consultant. 

“Goldman Sachs, when they write the , will be noted as the one who invented or perfected embedded banking, where embed your through the user , or at the edge, of someone else’s network,” Crone said. “If Goldman can get this right with Amazon, I would expect them to to or any other platform of substance that provides them a large distribution channel.”

Goldman is leaning on many of the lessons it learned in its partnership with Apple, known as an incredibly demanding , Crone said. Most notably, the ability to offer instant issuance to a set of customers that have already been pre-validated, multi-factor authenticated, Know-Your-Customer credentialed by the large tech firms. 

“They already know the customer, but they have met the regulatory requirement in advance before they hand it over,” he said. 

The product will likely similar to what small merchants are getting from or Working Capital. 

Goldman has bigger ambitions. At last week’s investor day, the bank presented a slide that showed a product called Marcus Pay, which talked about point-of-sale solutions for merchants based consumer bank. 

This is just another example of how embedded banking is to , which can be hard for a lot of bankers to understand because they want to service customers through their own , Crone said.

But “no financial institution can reach the scale that’s required to compete electronically” with the large platforms if they only do it through their own app, he said.  

“If Goldman can pull off an embedded banking deal somewhere else besides Apple Pay, or if Citigroup can pull off Google Cache, that’s a leading indicator of a fundamental change in retail banking.”

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