In an internal memo seen by Reuters, Goldman Sachs told staff in its tech division to "exercise judgment in determining when to adapt to business attire”.
The policy change aims to attract new talent by offering a more relaxed work environment, amid strong competition from start-ups.
However, the bank did not specify what its employees were allowed to wear.
Last year, JP Morgan also relaxed its dress code policy, telling its employers a business casual dress code would be expanded “firm-wide”.
"More clients are dressing informally, and many parts of our company are already business casual,” a memo seen by Business Insider said at the time.
"While it may not be possible to dress business casual at all times or in all areas, we believe having a firm-wide guideline is the right thing to do.”
Barclays also introduced casual Fridays back in 2013, but in 2015 Barclaycard’s interim chief Amer Sajed sent a note to its staff telling them that flip flops and t-shirts were not allowed, even on Fridays.
Meanwhile, the trade union TUC urged businesses to relax workplace dress codes during the heatwave last month.
The TUC said that employers should allow staff to adopt less formal attire during summer, with jackets off and casual lightweight clothes in.
Frances O’Grady, the TUC’s general secretary, said, “Obviously shorts and flip flops won’t be the right attire for all workers, but no one should be made to suffer unnecessarily in the heat for the sake of appearances.”
An e-petition calling for a change to the law that allows companies to require women to wear high heels at work sparked an inquiry by the Petitions Committee and the Women and Equalities Committee last year.
Over 142,000 people signed the petition created by Nicola Thorp, who was employed as a temp by PwC’s outsourced reception firm Portico and said she was sent home after she refused to source a pair of two to four inch heels after arriving at work wearing flat shoes.
Thorp called for dress code laws to be changed so that women have the option to wear flat formal shoes at work, if they wish. The petition wanted to "make it illegal for a company to require women to wear high heels at work".
Following the launch of the inquiry, economia asked the profession what their dress code policies are.