Macaskill on markets: Apple and the IT spending serpent
As technology spending escalates, financiers now face a temptation to reframe costs as an investment in future growth, safe in the knowledge that it is extremely difficult to check their assertions.
Financial industry executives know they have to seem technology savvy nowadays. Digital labs are found in most banks and insurance firm Aviva even set up a digital garage in London’s hipster enclave of Hoxton Square, although that may have been so it had somewhere to store printouts of its discarded strategy plans.
Goldman Sachs has been a leader in the field of aggressive marketing of supposed technological advantages, including promotion of its institutional client digital platform Marquee. Goldman has actually lost fixed income and equity trading market share in recent years, so it is not clear how much of a differentiator this platform has been, but it remains a focus of promotional efforts.
In another attempt to establish technological superiority over its peers, the bank will soon provide more details of a partnership with Apple. This looks likely to be an arrangement to provide a credit card targeted at millennial customers, complete with features that may make it difficult for Goldman to turn a profit.
In its first-quarter earnings presentation Goldman highlighted the partnership as though it had the potential to transform its entire future, however.