Goldman Sachs exec says winning customer loyalty with Apple Card more important than profi...

Posted:
in General Discussion edited June 10
The head of Apple Card partner Goldman Sachs' consumer banking business in an interview on Monday addressed concerns that the new credit card offering is not structured for maximum profitability, and implied customer engagement is more important than sheer financial gain.




Speaking at Business Insider's IGNITION: Transforming Finance event on Monday, Omer Ismail, who leads Goldman's Marcus division, said the fledgling online bank is using Apple Card's unique customer-first features to gain a toehold in a new market.

Unveiled at a special Apple event in March, Apple Card was created for a digital world, with iPhone-enabled NFC capabilities and unique tools to help users keep track of and manage their expenses. Interest rates offered by Goldman are not the most competitive, but connected features in Apple Wallet urge customers to pay off their balance before incurring debt.

A true Apple product, Apple Card also boasts suite of platform-specific features designed to ensure user privacy and security. For example, Goldman is disallowed from using customer data for external or internal advertising purposes beyond a slice of information for internal reporting.

Due to its unique set of features -- lack of fees, encouragement to pay less interest, no access to customer data -- Apple Card is believed to be less profitable for its backers than a traditional credit card. A report in May claimed worries over profits led Citigroup, and potentially other major banks, to withdraw from negotiations to partner with Apple on the new card scheme.

Ismail, however, believes the features presented by Apple Card are in both the bank's and the customers' best interests.

"When I think about Marcus overall, the idea that doing right by the customer means being less profitable is just not an idea we subscribe to," Ismail said. "If you do right by the customer, you're going to ultimately win their loyalty."

Launched five years ago, Marcus is a relative newcomer to the consumer finance segment. Goldman has rapidly built out the division's product lineup through a series of acquisitions that includes credit card firm Final, which laid the groundwork for the banking giant's first credit card offering in Apple Card.

Ismail notes Marcus lacks "legacy" business models and technology, suggesting a more streamlined outfit that can operate at a lower cost as compared to lumbering credit rivals. This agility, along with Marcus' eagerness to get a foot in the door, puts the Goldman division in good position to take on a project like Apple Card.

Apple Card is due for release this summer.



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Comments

  • Reply 1 of 42
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    edited June 10 kkqd1337spice-boyCarnage
  • Reply 2 of 42
    MacProMacPro Posts: 18,456member
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    Use of a credit card doesn't have to be stupid.  For the past 45 years, I've only used an Amex as a credit card (I have Visa and Master Card but rarely use them) and I've always paid off the balance in full at the end of every month.  There are people like me that use credit cards as a convenient way to pay without incurring any interest rather than carry cash and I am happy to pay the annual fee for all the benefits ranging from insurance to fly miles.  I am sure there are many like me.  I am equally sure many like me are very interested in this card.
    SpamSandwichflyingdpPetrolDaveAppleExposedracerhomie3TomPMRIAndy.Hardwakejbdragonfelix01Carnage
  • Reply 3 of 42
    genovellegenovelle Posts: 982member
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    Really? Credit cards provide convenience and access. There are millions of businesses that would have never made it off the ground with out the owners being able to leverage their cards when needed. The fact that these other companies have come out attacking the card as unprofitable and a bad business model is telling. The interest rates are just the beginning of the cost. They make a ton on fees that this card doesn’t charge. 
    lolliverAppleExposedracerhomie3Andy.HardwakebeowulfschmidtjbdragonFileMakerFellerlostkiwijony0
  • Reply 4 of 42
    gerardgerard Posts: 49member
    I love my Citicard. However as soon as this card is available I will be giving the Apple Card a go. 
    lolliverAppleExposedracerhomie3lostkiwi
  • Reply 5 of 42
    Bring it on. Only time will tell whether it is good credit card or not. I like that they are offering a different angle and hope it fulfills some people needs for whom the existing options are not satisfying. Apple should also design an app for online dating.
  • Reply 6 of 42
    AppleExposedAppleExposed Posts: 1,689unconfirmed, member
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    Typical troll tactic. Ignore 99% of the industry and place the burden on Apple.

    Luckily unlike the 99%, Apple is giving the customer some privacy and new ways to enjoy the card.
    You on the other hand want Apple to give free money away. Ridiculous.
    edited June 11 racerhomie3StrangeDaysGeorgeBMacjbdragonjony0
  • Reply 7 of 42
    Phobos7Phobos7 Posts: 21member
    This card will be groundbreaking for a whole host of reasons. One being that the offer places the customer ahead of profits while at the same time offering the card issuer great exposure in a market that really has never been tapped to the degree that offers solid customer base participation. Another is the technological rollout of relatively seamless security from top to bottom. This is definitely a winning piece of high tech with a good dose of customer friendly security with plenty of room to grow. Shouldn’t be too long until it lands.
    edited June 11 racerhomie3steveauTomPMRIAppleExposedAndy.Hardwakelostkiwi
  • Reply 8 of 42
    AppleExposedAppleExposed Posts: 1,689unconfirmed, member
    Phobos7 said:
    This card will be groundbreaking for a whole host of reasons. One being that the offer places the customer ahead of profits while at the same time offering the card issuer great exposure in a market that really has never been tapped to the degree that offers solid customer base participation. Another is the technological rollout of relatively seamless security from top to bottom. This is definitely a winning piece of high tech with a good dose of customer friendly security with plenty of room to grow. Shouldn’t be too long until it lands.

    It's revolutionary but the haters will call it a "scam" or "subpar".

    That dumb unbox guy already calls it a "scheme" while ignoring the other 99% of credit cards that actually ARE one. LMAO.
    lostkiwijony0
  • Reply 9 of 42
    tyler82tyler82 Posts: 895member
    A lot of Apple apologists round here, so they may be right. 
    chemengin1
  • Reply 10 of 42
    kkqd1337kkqd1337 Posts: 222member
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    Correct. 

    And the audacity Apple has to claim they are doing it for the love of their customers is shocking.
    spice-boy
  • Reply 11 of 42
    LOL
  • Reply 12 of 42
    irelandireland Posts: 17,685member
    Crowd of bankers
  • Reply 13 of 42
    How do you complete an over the phone transaction? And when completed - what % of cash back would apply?
  • Reply 14 of 42
    crowleycrowley Posts: 6,064member
    If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.
    What does this even mean?  It is a post paid card - all credit cards are post paid, unless I've misunderstood your use of the term.  Post paid = debt.

    To not incur any debt on the consumer would (again, if I'm understanding you) be an actual banking and deposit service with an Apple Debit card and a hard limit on overspend, a far more complicated proposition, and hardly one that is regularly embraced as "caring" about consumers.
    edited June 11 lostkiwi
  • Reply 15 of 42
    StrangeDaysStrangeDays Posts: 8,809member
    tyler82 said:
    A lot of Apple apologists round here, so they may be right. 
    Always amazed by the trolls who visit an Apple site, daily, to complain about the people there who are interested and excited by Apple. Such neurosis.
    GeorgeBMac
  • Reply 16 of 42

    Goldman Sachs exec says winning customer loyalty with Apple Card more important than profitability


    Anyone believing that statement is either stupid, naive, stupidly naive, or naively stupid.  Many Apple fans seem to be blinded by Apple's involvement.  Apple isn't the bank.  Goldman is.   Apple isn't going to be running point on any issues that may arise.  Goldman is.  People getting this card are not entering a financial relationship with Apple.  Bears repeating.  People getting this card are not entering a financial relationship with Apple.  They will be entering a financial relationship with Goldman Sachs.  Yes, that Goldman Sachs.  

    My personal hope is that the high profile visibility of the relationship with Apple will curb Goldman's tendencies toward being Goldman.  But when they come with obvious "we care" marketing... yeah, no.  They'd be much more believable saying they found a way to balance profitability with customer facing benefits like cash back savings, privacy, financial mgmt tools.  Basically they should let Apple market this and shut the hell up.  Apple is the relationship company and from a sample of the comments in this thread, some people already believe that's who they'll have the relationship with in the first place.
    spice-boymuthuk_vanalingamCarnagedavgregblurpbleepblooplostkiwi
  • Reply 17 of 42
    iMAK-iMAK- Posts: 2unconfirmed, member
    “Customer loyalty is more important than sheer financial gain”

    Its pathetic that this is the world we live in. The WHOLE point of businesses is to offer a good or service to their community, not making money. It’s simply a perk of the businesses not the purpose of one. 
    But, clearly, over the years the real purpose has been lost in the middle of all the greedy people in the world. 

    And now we have people in the world that act like being consumer friendly is something to brag about. It should be god damn expected from all of them. 
  • Reply 18 of 42
    LatkoLatko Posts: 398member
    tyler82 said:
    A lot of Apple apologists round here, so they may be right. 
    Always amazed by the trolls who visit an Apple site, daily, to complain about the people there who are interested and excited by Apple. Such neurosis.
    One neither has to be a loyalist nor a troll to see that Apple is getting into a business that doesn’t align very well with all the higher aims of moralist Mr. T. Cook.
    muthuk_vanalingamCarnage
  • Reply 19 of 42
    dewmedewme Posts: 2,197member
    MacPro said:
    The idea is making a maximum amount of money for both companies, that the sole purpose of this credit card or credit cards in general.  Let’s stop glorifying Apple and Goldman Sachs over a subpar credit card.  If they truly care about their customers it would at least be a post paid to not incurr any debt on the consumer at all.   People and their mindless stupidity about credit cards.
    Use of a credit card doesn't have to be stupid.  For the past 45 years, I've only used an Amex as a credit card (I have Visa and Master Card but rarely use them) and I've always paid off the balance in full at the end of every month.  There are people like me that use credit cards as a convenient way to pay without incurring any interest rather than carry cash and I am happy to pay the annual fee for all the benefits ranging from insurance to fly miles.  I am sure there are many like me.  I am equally sure many like me are very interested in this card.
    Agreed. What builds customer loyalty for me is great customer service and convenience. The best of the best for me has always been Discover and I will stick with them. It's quite likely however that the Visa and MasterCard cards in my wallet days are numbered and will be replaced by the Apple card. Time to weed out the losers.
  • Reply 20 of 42
    That’s the good old... instead of making products better, let’s keep adding features.  That’ll make sure they never notice the sharp decline in quality.
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