Goldman Sachs' Fintech Unit Faces Scrutiny, Bank Halts Riskier Client Onboarding: Report

Goldman Sachs Group, Inc.'s GS partnerships with financial technology companies are reportedly under the scanner of the U.S. banking regulators owing to issues regarding compliance and risk. 

Concerns highlighted by the Fed included poor due diligence and monitoring processes when accepting high-risk non-bank clients, FT reported, citing two people familiar with the matter. 

A unit of the bank's transaction banking business, or TxB, has ceased signing on treacherous fintech clients following a caution generated by the Federal Reserve earlier this year, the report notes.

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The team, cautioned by the regulatory watchdog, provides banking infrastructure to fintech clients, including payment start-ups Stripe and Wise, FT added.

"We are not permitted to comment on any supervisory matters related to our regulators," Goldman Sachs told FT.

The Fed's fuss is another setback to Goldman's expansion of new businesses under chief executive David Solomon, the note adds.

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Price Action: GS shares are trading higher by 0.23% to $329.33 premarket on the last check Thursday.