Goldman Sachs in today’s earnings call announced a three-year tech investment plan that uses automation and AI to improve its overall efficiency and new product roadmap.
The $546 billion bank has identified three areas in which it plans to up its investment, Chief Executive David Solomon said during the fourth-quarter earnings call, without disclosing the amount to be spent. Those areas are:
- Simplifying and modernizing the FI’s technology stack;
- Enhancing productivity through AI-driven documentation analysis; and
- Accelerating and transforming business technology like new investing tools.
“We’re going to continue to use technology to make the firm more productive,” Solomon said. “We’re going to continue to scale and create automation of platforms that allow us to deploy resources to serve our clients better and grow our franchise.”
THE BIG PICTURE: Goldman’s increased investments are a part of its latest strategy to reduce its footprint from retail banking and focus on wealth management, dealmaking and trading, Solomon said.
Goldman reported tech and communication expense of $523 million in Q4, up 4% year over year, driven by investments in automation and AI, Solomon said. There is opportunity within its operations to deploy automation and AI in the coming years, he added.
The FI’s plans to drive growth in the coming years depend on its tech investment to increase its cost savings coupled with more investment in strategic locations, Solomon said.
BY THE NUMBERS: In Q4, Goldman reported:
- Operating expense of $8.3 billion million, down 3% YoY;
- Net revenue of $13.9 billion, up 23% YoY; and
- Net interest income of $2.3 billion, up 75% YoY.
MARKET REACTION: Shares of Goldman Sachs (NYSE: GS) were up 6% from market open to $605.92 at market close today. Goldman Sachs has a market capitalization of $190.20 billion.
Register here by Jan. 17 for early-bird pricing for Bank Automation Summit 2025, taking place March 3-4 in Nashville, Tenn. View the full event agenda here.
