US banking regulators have raised risk and compliance concerns over Goldman Sachs’ partnerships with financial technology companies, according to people with knowledge of the talks, in the latest operational headache facing the New York investment bank.
A division of the bank’s transaction banking business (TxB) has stopped signing on riskier fintech clients following the warning by the Federal Reserve earlier this year, according to two people familiar with the matter. Issues raised by the Fed have included insufficient due diligence and monitoring processes when accepting high-risk non-bank clients, they said.
The team targeted by the regulator provides banking infrastructure to fintech clients including payment start-ups Stripe and Wise. TxB’s other business, which provides cash payments services, was not criticised.