Goldman Sachs is alerting its shareholders that some competitors are gaining an edge by offering cryptocurrency products and services that the bank currently does not. Its 2024 Annual Report frankly states that in certain scenarios, rival firms provide digital assets and related offerings that clients may favor, but which Goldman Sachs either cannot or has chosen not to supply.
The bank suggests this competitive environment could ultimately benefit clients by fostering improved experiences and more diverse options. The report also points to blockchain and artificial intelligence (AI) technologies as key factors intensifying the competitive landscape within the banking industry. “The growth of electronic trading and the introduction of new products and technologies, including trading and distributed ledger technologies, such as cryptocurrencies, and AI technologies, has increased competition.”
Moreover, the financial services giant acknowledges its exposure to risks through activities involving digital assets, primarily due to potential cybersecurity incidents. The report elaborates, “Additionally, although the prevalence and scope of applications of distributed ledger technology, cryptocurrency and similar technologies is growing, the technology is nascent and may be vulnerable to cyber-attacks or have other inherent weaknesses. We are exposed to risks, and may become exposed to additional risks, related to distributed ledger technology, including through our facilitation of clients’ activities involving financial products that use distributed ledger technology, such as blockchain, cryptocurrencies or other digital assets, our investments in companies that seek to develop platforms based on distributed ledger technology, the use of distributed ledger technology by third-party vendors, clients, counterparties, clearinghouses and other financial intermediaries, and the receipt of cryptocurrencies or other digital assets as collateral.”
