A division of Goldman Sachs’ transaction banking business (TxB) has stopped onboarding riskier fintech clients following a warning from the US Federal Reserve, as reported by the Financial Times.
The Federal Reserve raised concerns regarding inadequate due diligence and monitoring processes when accepting high-risk non-bank clients. This issue pertains to a team within TxB that provides banking infrastructure to fintech companies like Stripe and Wise, while TxB’s cash payment services business remains unaffected.
Goldman Sachs is targeting approximately $750 million in revenue from its TxB operations by 2024, which is part of its loss-making Platform Solutions unit.