A division of Goldman Sachs' transaction banking business (TxB) has stopped taking on riskier fintech clients after receiving a warning from the US Federal Reserve, according to the Financial Times.
The Fed contacted Goldman with concerns about insufficient due diligence and monitoring processes when accepting high-risk non-bank clients, says the FT, citing sources.
The issue relates to a team within TxB responsible for providing banking infrastructure to fintech clients such as Stripe and Wise. TxB's cash payment services business is not affected.
Goldman is aiming to bring in about $750 million in revenue from the TxB business by 2024. It is part of the of loss-making Platform Solutions unit.