The statistic is one of several nuggets from a Credit Suisse report on how the bank uses technology, following a conversation with chief information officer Marty Chavez.
In 2000, Goldman Sachs had 600 traders in New York City making markets in US stocks. Today, that number is down to fewer than 10.
There are ways for Goldman to be more efficient with its tech spending. About 30% of the annual expense goes to maintenance, which covers things like communications, market-data expenses, and software licensing. The bank wants to get that down to 10%, which is more comparable with software companies.
These strategic investments could include things like investing in blockchain technology that underpins the use of bitcoin, with the Credit Suisse analysts noting that Goldman Sachs is "very interested in the use of Blockchain/distributed ledger technology."
Embrace Disruption—management of Goldman is very much of the belief—and we can't argue with this—that there will be far more value ascribed to those who embrace new, albeit disruptive, technologies. This disruption can be people "destructive" at times, but it can be far more destructive to be left behind in a business poised for profound change. Importantly, these changes may be disruptive, but also both relationship and profit margin enhancing, through delivery of a better product to Goldman's clients.
This has big implications for the bank's staff. In some ways, technology can make their lives easier. Last month, the bank announced an initiative designed to make the lives of junior investment bankers easier — by letting technology do more of the grunt work for them.
That would free up $600 million to $800 million, which could either go back to the bottom line, or be reinvested strategically, Credit Suisse estimates.
Other investments include Symphony, the instant-communications platform out to displace Bloomberg's terminal, and Goldman's Marquee app, which delivers data and analytics to staff and is being rolled out to clients.
The note said (emphasis added):
But technology might also soon replace more workers.
The analysts estimate that Goldman spends $2.5 billion to $3.2 billion on technology each year, or about 7% to 9% of revenue.
Setbacks And Naysayers Begone! Bitcoin Breaks $8,000 On Investor Confidence
Bitcoin broke through the $8,000 price mark this morning, reaching an all-time high of $8,100, thumbing its nose at the growing chorus of doomsayers reacting to the financial industry’s rising interes
Bitcoin Price Achieves New All-Time High at $8,100, Market Confident in Institutional Investors
The bitcoin price has officially achieved a new all-time high price at $8,100, surpassing its previous high at $8,050 established earlier this week. $10 Billion Awaiting to be Invested in Bitcoin
Newsflash: Bitcoin Price Reaches $8,100, a New Record High
Bitcoin price has struck a new all-time high of $8,100 during Sunday’s trading, continuing its rally from the previous Sunday’s lows.
The world’s first cryptocurrency has hit a new record high of $
Prominent VC Investor: Be Aware of ICO Pump and Dump Schemes
Jason Calacanis, a highly regarded venture capital investor who has invested in 150 successful technology startups such as Uber, Evernote, and Swell cautioned investors in the cryptocurrency sector in
UPS-Backed Blockchain Consortium Seeks to Disrupt the Freight and Logistics Industry
As blockchain becomes ubiquitous across consumer and enterprise applications, we will continue to see more and more large scale disruption of traditional sectors that are critical parts of the global
Manhattan’s Real Estate Eyes Up Bitcoin for Property Payments
Manhattan’s real estate market is embracing bitcoin for property payments as the digital currency increases in value.
One property developer who is hoping to capitalise on the recent digital curren
Karpeles Looks to Revive MtGox, Seeks $245 Million
Does anyone have $245 million to revive MtGox? Mark Karpeles, who has pleaded not guilty to charges of money laundering and embezzlement, claims reviving MtGox offers a way to allow creditors to get s
Billionaire Investor Novogratz: Ethereum En Route to New All-Time Highs
Mike Novogratz, the billionaire hedge fund investor and former executive at Fortress, believes Ether, the native cryptocurrency of Ethereum, is poised to achieve new all-time highs in the short-term.<