A division of Goldman Sachs’ transaction banking business (TxB) has ceased taking on riskier fintech clients after receiving a warning from the US Federal Reserve, as reported by the Financial Times.
The US Federal Reserve raised concerns with Goldman Sachs regarding the division’s inadequate due diligence and monitoring processes when onboarding high-risk non-bank clients, according to sources cited by the FT.
This issue pertains to a specific team within TxB that provides banking infrastructure services to fintech clients such as Stripe and Wise. However, Goldman Sachs’ cash payment services business within TxB remains unaffected.
Goldman Sachs has set a revenue target of approximately $750 million from its TxB business by 2024. This business unit is part of the Platform Solutions unit, which has incurred losses.
By FCCT Editorial Team
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