Goldman Sachs exec says winning customer loyalty with Apple Card more important than profi...
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.
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.
Comments
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.
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.
And the audacity Apple has to claim they are doing it for the love of their customers is shocking.
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.
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.
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.