- Goldman’s CFO said Wednesday that the firm is planning to “eliminate legacy technology.”
- It’s part of the firm’s efforts to increasing lean into cloud tech.
- Goldman has recruited cloud engineers and sees some cost-saving benefits from cloud technology.
- See more stories on Insider’s business page.
Plans for leaning more on cloud technology at Goldman Sachs aren’t just up in the air.
The firm is evolving the next phases of its planned transition to more cloud-based infrastructural systems, according to new remarks by one of its top executives.
Stephen Scherr, Goldman Sachs’ chief financial officer, said Wednesday on the company’s 2021 first-quarter earnings call that Goldman is increasingly leaning into cloud technology.
“Our new builds are largely, perhaps not exclusively, but largely cloud-based,” he said, according to a transcript of the earnings call accessed on the data and research platform Sentieo.
“We’re riveted and focused on doing that so as to eliminate legacy technology [and] build in the cloud,” Scherr added.
Scherr’s comments are a nod toward financial firms increased efforts to shut down older systems built on internal, physical servers and move towards cloud-based development, which can offer both cost savings and increase efficiency when innovating.
He also pointed to the fact that Goldman has had the benefit of starting from scratch, from a tech perspective, when building out news offerings.
“I think some of the newer businesses that we’re involved in, transaction banking, consumer, benefit from the absence of legacy, so that we can build new and efficiently and in the right form,” Scherr said.
Last year, Insider reported that Goldman Sachs was laying the groundwork for a robust “financial cloud” system, which its executives at the firm said would be the first of its kind.
Marco Argenti, the firm’s co-chief information officer, wrote in a February 2020 memo that Goldman Sachs was poised to launch the industry’s first such service to institutional, corporate, and consumer clients.
“That is an opportunity that can be transformational to the firm’s business for decades to come,” Argenti wrote in the memo.
On the earnings call on Wednesday, Scherr mentioned Argenti as well his counterpart George Lee as helping him understand the importance of not only rolling out new systems but shutting down older ones.
Scherr also proffered the example of transaction banking, a B2B service that banks extend primarily to institutional clients, such as businesses or corporations, to illustrate the utility of cloud tech..
“Transaction banking is a new platform designed from the front-end all the way through to the back, into the books and records of the firm,” Scherr said.
Given that Goldman’s transaction-banking system is based on cloud engineering, he added, it comes with some advantages, including better expense margins when it comes to upgrading the system.
Staffing up within Goldman’s consumer unit
A Goldman Sachs spokesperson told Insider in April that the firm had signed a contract to recruit 14 additional cloud engineers in its consumer business.
They’re part of a wave of new hires Goldman is making to meet the workload demands stemming from its Marcus unit, which recently has experienced a raft of departures as a result of burnout and overwork within the tech-heavy group.
Meanwhile, other firms have taken measures to launch cloud systems catering specifically to Wall Street.
IBM fully rolled out its IBM Cloud for financial services earlier this month. The system, which boasts standardized compliance, security, and computing tools is intended to focus on institutions in the financial services industry.