Goldman Sachs' new CTO says third-party developers have become the bank's 'most valued' customers - and that hints at how it wants to work with clients in the future

• Atte Lahtiranta, Goldman Sachs' new chief technology officer, spoke to Business Insider in an exclusive interview about how he is thinking about his role, which he started last month.
• Lahtiranta spent most of his career at big tech companies, including Verizon's media group, Yahoo, and Nokia. He said that wooing third-party developers is going to be a major focus in his new job.
• Lahtiranta said he wants to make it as easy as possible for outside developers to interact with the bank - treating them as among Goldman's "most valued customers."
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For much of its 150-year history, Goldman Sachs' key clients have been traders, portfolio managers, and corporate executives. Now, the firm is ready to add another group to that list: developers.

That's at least how Atte Lahtiranta, the Wall Street firm's new chief technology officer, is thinking about his new role, he said in an exclusive interview with Business Insider. Lahtiranta, introduced as the incoming CTO in September, joins the firm after stints at Verizon's media group, Yahoo, and Nokia.

Lahtiranta said his years of experience working in big tech taught him about the importance of wooing third-party developers. As CTO, he will encourage his engineers to make it as easy as possible for outside developers to interact with the bank - treating them as some of the firm's "most valued customers."

"I don't think the financial industry has yet focused as much on the developer's world as where I'm coming from," he said. "You need to have great documentation for onboarding, keep the developers happy and make them use your services, and hopefully create some value exchange."

Targeting developers could help Goldman take its existing products - like pricing feeds and research - and sell them to outsiders who want to layer their own apps and services on top. That helps the bank bring in revenue without the heavy lifting of building out consumer-facing tech and marketing.

APIs remain a key piece of Goldman's strategy

That would be a welcome outcome for Goldman Sachs and CEO David Solomon, who is breaking down divisional barriers and trying to organize the firm around a motto of "One Goldman Sachs." Put into parlance on his first day as CEO, the saying is a way to direct his employees to rally around the client to deliver products or services as seamlessly as possible.

Successfully implementing the strategy - and bringing in more revenue - will require a greater embrace of technology to enable others to access the bank's advice, research reports, or trading services. Tools will include better web portals, direct pricing feeds, and application programming interfaces.

The promise of APIs has long been championed by Marty Chavez, the co-head of the securities division and former chief information officer who will retire later this year, as well as Adam Korn, global head of securities division engineering.

Chavez, a proud mentee of ex-Google chairman Eric Schmidt, is fond of mentioning Google Maps and how its open API allowed companies like Uber to create an entirely new business on top of Google's infrastructure. Google received $58 million in fees from Uber for using its map tech in the three years through 2018, according to Uber's IPO prospectus.

Goldman would like to do the same for the financial services industry. Former CEO Lloyd Blankfein liked to say that Goldman Sachs is a technology company, but what Solomon is effectively trying to do is position Goldman as a banking company that harnesses technology to embed its products into other work streams or products. Lahtiranta agrees.

"If you enable a great developer or partner to use some of your services, not only are you acquiring customers and keeping them happy, but now you have this ecosystem doing it with you," he said. "These are the things that propel you to massive growth."

That's the idea behind Goldman's Marquee platform, which offers tools for developers to connect to the firm's pricing feeds, risk analytics models, or trading functions.

That's also increasingly possible with the bank's digital consumer bank Marcus.

Executives have considered providing the infrastructure they built for consumer banking - like the know-your-customer compliance regime, credit underwriting system, or deposit platform - to fintech startups or other corporations that want to offer financial products but don't want to jump through the regulatory hoops of becoming a bank, according to people with knowledge of the effort.

A Goldman Sachs spokesman declined to comment.

Goldman isn't alone in pursuing that approach. JPMorgan too has staked one part of its future on APIs. The bank maintains an API platform for both its consumer bank, known as Chase Developer, and its corporate and investment bank, known as J. P. Morgan Developer.

"Technologists are now a key client constituency who want a world-class user experience," Richard Crozier, head of product management for the JPMorgan investment bank data and analytics function, said in September. The bank said J.P. Morgan Developer was handling 100 million data requests each year.

The following month, Goldman said its Marquee platform was handling 1 million requests each day. Marquee now has 50,000 monthly active users. Goldman's API request figure includes internal inquiries and it's unclear if JPMorgan's figure does too.

The public cloud will play a critical role

A key piece of the firm's strategy will be the public cloud, a technology that Wall Street has begun to adopt in recent years that uses the remote servers managed by providers such as Amazon Web Services, Microsoft and Google.

The allure of saving money and innovating faster from moving off physical servers has led banks to push nearly half their IT budgets towards the public cloud in 2020, according to a recent Refinitiv survey.

For Goldman, that means the tools it is building for outside developers, including the APIs, will allow them to access Goldman programs or data stored in the cloud. Providing a suite of financial services based in the cloud for outside clients would make it an early adopter among traditional banks.

The bank's embrace of the technology can be seen in another recent hire. In the same announcement marking Lahtiranta's appointment, Goldman said it had hired Marco Argenti from AWS, where he was a vice president who oversaw "all aspects of the product life cycle of Cloud Services," according to its statement.

Lahtiranta declined to comment specifically on Goldman's plans for the cloud, but said there was still a lot to learn about how best to deploy the tech.

"I don't think we have yet to fully understood what we can do with public clouds," he said. "How can we really use them? Where they are an asset and where are they not?"

Lahtiranta will need to hit the ground running. During his extensive interview process - which included upwards of 30 interviews - he said there was a clear preference to deliver quickly. And while Lahtiranta said the bank understands it needs to be thoughtful about what it builds, the speed at which it hopes to operate eclipses even that of the tech companies where he spent his career.

"The expectation I got was yesterday," he said. "I think they expect us to do things faster than maybe, even, is possible. But I think that's what makes this great. That we try to do the impossible things."