LONDON - An odd couple is coming together in Britain. Goldman Sach’s Marcus retail bank is teaming up with Saga, which specialises in products for over-50s. The pair are not obvious bedfellows but will probably both benefit from the partnership.
More than 250,000 UK customers have signed up to Marcus since its September 2018 launch in Britain, lured by a generous interest rate and the bragging rights of having an account with a Wall Street giant. While many of Marcus’s current UK clients are in their mid-40s, the partnership with Saga announced on Tuesday means Goldman can reach an older, wealthy demographic without having to vie for attention on comparison websites.
It also brings benefits for Saga, which issued a profit warning in April. The UK company’s once-loyal troop of older customers have begun shopping around online for insurance. Nor has the 0.55% interest rate offered on Saga’s telephone savings account, which is provided by Birmingham Midshires, been much of a draw. Saga has begun a revamp of its insurance business to lure in new customers but could do with some new tricks. Discounts for clients who open a Marcus account over its platform could generate some demand for other products and services. And it will earn commission from Goldman. This apparently odd couple will probably turn out to have a lasting marriage.
- Saga, the British firm that supplies products and services to the over-50s, said on June 11 it was teaming up with Goldman Sachs and that the two companies would launch new products together later in 2019.
- Saga on April 4 cut its profit forecast for the 2019-20 financial year, blaming pressure on its insurance business and Britons scaling back travel plans because of uncertainty over Brexit. The company also cut its dividend.
- Marcus, Goldman’s retail banking foray, was launched in Britain in September 2018 and has so far attracted more than 250,000 customers in the UK, Saga said.
- Saga shares were up 5% at 43.20 pence by 0838 GMT on June 11.
(Editing by Swaha Pattanaik and Bob Cervi)
© Reuters News 2019