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Goldman sees growth in mass-affluent advising, corporate cash deposits

Goldman Sachs is sketching out more details of its expansion into new businesses.

Transaction banking will be one focus as the firm prepares to roll out a new cash-management system, President John Waldron said in a presentation Friday. If last year was about developing a fledgling consumer-finance business, the coming year will highlight attempts to attract cash deposits from corporations.

The Goldman Sachs Group Inc. logo is displayed in the reception area of the One Raffles Link building, which houses one of the Goldman Sachs (Singapore) Pte offices, in Singapore, on Saturday, Dec. 22, 2018. Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs Group, which helped raise money for the entity, people with knowledge of the matter said. Photographer: Nicky Loh/Bloomberg
The Goldman Sachs Group Inc. logo is displayed in the reception area of the One Raffles Link building, which houses one of the Goldman Sachs (Singapore) Pte offices, in Singapore, on Saturday, Dec. 22, 2018. Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs Group, which helped raise money for the entity, people with knowledge of the matter said. Photographer: Nicky Loh/Bloomberg

Waldron said the firm is an “unsatisfied customer" of existing cash-management services, and that’s one reason it sees potential for growth in its transaction-banking business. "We expect to build a better product," he said.

The firm has said it expects about $100 million in expense savings from using a home-grown product to manage its own cash. Now the company hopes to start persuading other corporations to move their money to the new business.

"We’ll pay for the deposits because it’s attractive funding for Goldman Sachs," Waldron said at the Bernstein Strategic Decisions Conference.

The executive also pointed out efforts to broaden wealth management offerings, which are still largely limited to a niche, ultra-rich crowd. That push came into focus earlier this month with the $750 million purchase of wealth manager United Capital.

The takeover will add about $25 billion in assets under management and help Goldman Sachs make inroads with what it calls the mass-affluent, reducing its reliance on ultra-high-net-worth individuals. The business will work in concert with its Ayco unit, which offers financial planning to executives at corporate clients.