Square’s Bank Arm Launches as Fintech Aims ‘to Operate More
Square, a financial services and mobile payment company, has launched its industrial bank, Square Financial Services, after receiving approval from the Federal Deposit Insurance Corporation (FDIC) to operate as a bank [1][4]. The bank will offer loans and deposit accounts to small businesses, and it aims to operate more nimbly than traditional banks [1].
Square Financial Services will be headquartered in Salt Lake City, Utah, and will be led by Lewis Goodwin, a banking veteran who previously served as CEO of Green Dot Bank [1]. The bank will initially focus on underwriting and originating business loans for Square Capital’s existing lending product [1].
The launch of Square Financial Services is part of Square’s broader strategy to expand its financial services offerings. In addition to its lending product, Square also offers payment processing, payroll, and other financial services to small businesses [1].
Building off its Salt Lake City, Utah Headquarters
Building off its Salt Lake City, Utah headquarters, Square Financial Services is proud to announce that it will now be offering business loan and deposit services [2]. The bank’s approval to operate as a bank was granted last year by the FDIC [2][3].
Square’s partnership with AzevedoTechCrunch, a technology news website, is aimed at bringing its services to a wider audience [5]. The partnership will allow Square to leverage AzevedoTechCrunch’s platform to reach more potential customers [5].
The Benefits of Operating as a Bank
Operating as a bank offers several benefits for Square. For one, it allows the company to offer loans and deposit accounts directly to its customers, rather than relying on third-party lenders [1]. This gives Square greater control over its lending products and allows it to offer more competitive rates and terms [1].
In addition, operating as a bank allows Square to access a stable source of funding. By accepting deposits from its customers, Square can use those funds to make loans to other customers [1]. This creates a virtuous cycle of lending and borrowing that can help fuel the company’s growth [1].
The Future of Square Financial Services
The launch of Square Financial Services is a significant milestone for Square and its customers. By offering loans and deposit accounts directly to its customers, Square is positioning itself as a one-stop-shop for small business financial services [1].
Looking ahead, Square Financial Services will likely continue to expand its offerings and grow its customer base. With its nimble approach to banking and its focus on small businesses, the bank is well-positioned to compete with traditional banks and other fintech companies in the space [1].
Conclusion
Square’s launch of its industrial bank, Square Financial Services, is a significant development for the company and its customers. By operating as a bank, Square can offer loans and deposit accounts directly to its customers, giving it greater control over its lending products and access to a stable source of funding. With its nimble approach to banking and its focus on small businesses, Square Financial Services is well-positioned to compete with traditional banks and other fintech companies in the space.
Sources:
1. https://techcrunch.com/2021/03/01/squares-bank-arm-launches-as-fintech-aims-to-operate-more-nimbly/
2. https://businessniddle.com/square-services-fdicann-azevedotechcrunch/
3. https://www.nationtimemagazine.com/square-financial-services-fdicann-azevedotechcrunch/
4. https://techable.news/square-square-services-fdicann-azevedotechcrunch/
5. https://businessmanifest.com/square-square-services-azevedotechcrunch/
