When Goldman Sachs launched Marcus, its consumer banking division, in 2016, it was heralded as a bold reinvention. The most elite name on Wall Street was going to compete with the likes of Chase and Capital One for ordinary Americans' deposits and lending business. It was, in the words of then-CEO Lloyd Blankfein, the future of the firm.

Eight years and billions of dollars later, that future has been officially cancelled. With the transfer of Apple Card to JPMorgan substantially complete, Goldman CEO David Solomon declared that the transaction "substantially completes the narrowing of our focus in our consumer business." The bank expects a $0.46 per share lift to fourth-quarter 2025 results from shedding the albatross.

The $4 Billion Lesson

Goldman's consumer banking adventure will go down as one of the costliest strategic missteps in modern Wall Street history. The firm poured more than $4 billion into building Marcus, acquiring credit card portfolios, and wooing partners like Apple and General Motors.

The results were dismal. Marcus never achieved the scale necessary to compete with established retail banks. The Apple Card partnership, while high-profile, proved unprofitable from the start. Customer acquisition costs were astronomical, credit losses exceeded projections, and the technological infrastructure required to compete in consumer banking far exceeded what Goldman had anticipated.

"Goldman learned what every community banker knows: consumer banking is a low-margin, high-volume business that requires massive scale to work. You can't dabble in it."

— Former Goldman executive

JPMorgan Swoops In

For JPMorgan, the acquisition represents the opposite lesson: consumer banking rewards the strong. As the largest U.S. bank by assets, Jamie Dimon's institution has the scale, technology, and customer base to make the Apple Card profitable where Goldman could not.

JPMorgan will take over more than $20 billion in Apple Card balances. The bank expects to recognize a $2.2 billion provision for credit losses tied to the forward purchase commitment—a significant upfront cost that Goldman was no longer willing to bear.

But for JPMorgan, the math works differently. The Apple Card portfolio slots into an existing credit card infrastructure that already serves tens of millions of customers. Incremental costs are minimal. And the prestigious Apple partnership enhances JPMorgan's brand with younger, affluent customers who represent the next generation of private banking clients.

The Return to Core Competencies

Goldman's retreat from consumer banking isn't just about cutting losses—it's about doubling down on what the firm does best. The bank is redirecting capital and attention to three core businesses:

1. Investment Banking

With M&A activity surging and Goldman's deal pipeline at a three-year high, the investment banking division is firing on all cylinders. The firm expects Q4 investment banking revenue to jump by double-digits, driven by both advisory fees and equity underwriting.

2. Trading

Goldman's trading desks remain among the most profitable on Wall Street. Fixed income and equity trading have benefited from market volatility and renewed client activity. The focus now is on leveraging technology to maintain competitive advantages while controlling costs.

3. Asset and Wealth Management

Perhaps most significantly, Goldman is making a major push in asset and wealth management—a higher-margin, stickier business than consumer banking could ever be. The firm is targeting ultra-high-net-worth individuals and institutional investors who value Goldman's investment expertise and prestige.

What This Means for Wall Street

Goldman's consumer banking exit carries broader implications for the financial services industry.

The Death of Universal Banking Lite

For years, investment banks have flirted with the idea of becoming more like universal banks—combining trading and advisory with deposits and lending. Goldman's failure suggests this hybrid model may be untenable for firms without existing retail infrastructure.

Morgan Stanley has pursued a different path, focusing on wealth management rather than mass-market consumer banking. That strategy appears to be working, and Goldman is now implicitly endorsing it by abandoning the consumer experiment.

Scale Advantages Intensify

JPMorgan's ability to profitably absorb what Goldman could not underscores the intensifying scale advantages in banking. The biggest institutions are getting bigger, while mid-tier players struggle to compete on technology, distribution, and customer acquisition costs.

This concentration raises regulatory questions, but for now, the momentum is clearly toward consolidation at the top of the industry.

Technology as Table Stakes

One of Goldman's biggest miscalculations was underestimating the technology investment required to compete in consumer banking. Digital-first competitors like Chime and SoFi have spent years and billions building seamless mobile experiences. Goldman's technology was never world-class, and customers noticed.

The lesson for other institutions considering consumer expansion: technology isn't just important—it's everything.

The Road Ahead for Goldman

With consumer banking in the rearview mirror, Goldman enters 2026 as a leaner, more focused institution. The question now is whether the firm can translate that focus into improved returns.

Investors will be watching several key metrics when Goldman reports earnings on January 15:

  • Return on equity: Goldman has historically lagged peers like Morgan Stanley on this crucial metric. Can the consumer exit improve ROE meaningfully?
  • Expense management: Consumer banking was a cost drain. How quickly can Goldman realize savings from the exit?
  • Asset management growth: The firm needs to demonstrate that its alternative strategy—wealth and asset management—can replace the revenue growth that consumer was supposed to provide
  • Deal pipeline durability: Investment banking is cyclical. Goldman needs to show that its current strength isn't just a one-quarter phenomenon

The Bottom Line

Goldman Sachs' consumer banking experiment will be studied in business schools for years to come as a cautionary tale about the dangers of straying from core competencies. The firm spent eight years and billions of dollars learning what community bankers know instinctively: consumer banking is not for amateurs.

But the story isn't entirely negative. By recognizing its mistake and acting decisively to correct it, Goldman has positioned itself for what could be its strongest earnings year in recent memory. The M&A boom is real. The trading desks are performing. And the distraction of Marcus is finally gone.

Sometimes the smartest strategic move is knowing when to quit. Goldman Sachs, after a costly education, has finally figured that out.