Square launches its own bank as more people embrace fintech
The fintech space continues to see growth during the pandemic as consumers and companies move towards remote financial transactions.
An American financial services and mobile payments company founded by Jack Dorsey, Square, launched its industrial bank that will see the fintech giant expand its operations within the fintech market.
The company seeks to offer business loans and deposit products with its new venture. It has begun operations after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.
Square, Inc Chief Financial Officer and Executive Chairwoman of the board of directors for Square Financial Services Amrita Ahuja said bringing banking capability in-house enables the company to operate more nimbly. This will serve Square and their customers as they continue the work to create financial tools that serve the underserved.
“We thank the FDIC and Utah DFI for their partnership enabling us to reach this milestone, and look forward to continuing to expand access to financial services at this critical time for small businesses.”
“Opening Square Financial Services deepens Square’s unique ability to expand access to loans and banking tools to underserved populations, 58% of loans through Square Capital go to women-owned businesses, compared to 17% of traditional loans and 35% of loans through Square Capital go to minority-owned businesses, compared to 27% of traditional loans,” the company said in a statement.
The company said it will continue to offer loans to third-party investors and limit balance sheet exposure and it does not expect the bank to have a material impact on Square’s consolidated balance sheet, total net revenue, or gross profit in 2021.