With the closure of Silicon Valley Bank, bankers at JPMorgan are working around the clock to receive hundreds of accounts for SVB clients, people familiar with the situation told On The Money.
According to one venture capitalist, bankers have been “staying up all night opening accounts” for frantic SVB clients looking to move their money to a safer bank.
Word quickly got out that JPMorgan — which has ramped up its presence in San Francisco in recent years — was a well-oiled machine, sources told The Post.
“This was a situation in the war room… Everyone was filling out the documents as hard as they could,” a source close to the bank told The Post.
For customers who already have an account with JPMorgan, it was easy to transfer funds from SVB to an existing account or open a new one.
For customers looking to open accounts for the first time, JPMorgan has accelerated the KYC (Know Your Customer) process — a regulation that requires banks to verify customers’ identity and understand their financial activities. Insiders told The Post that the KYC process, which can often take a week or more, takes just two days in some cases.
Even as the bankers were keen to take on new clients, one insider said they felt bad about the management at SVB. “It’s unfortunate… SVB did nothing wrong – it wasn’t a bad bank,” the source added.
A JPMorgan spokesman declined to comment.
Other venture capitalists still advise the tech founder to simply pop into a local bank like TD Ameritrade or Wells Fargo because it’s easier to open an account in person. A venture capitalist advised TD that he had a “minimum” to open an account.
Most businesses certainly don’t benefit from an SVB disaster. With Silicon Valley Bank closed by regulators, software companies and other technology companies with accounts at the struggling bank have sent urgent messages to customers: Don’t send money to our SVB account, according to emails reviewed by The Post.
The memo that tech companies are sending to vendors confirms that desperate companies with SVB accounts feel the closure of their financial lifeline.
One letter reviewed by The Post read, “Due to the current financial situation at Silicon Valley Bank, we would kindly ask you to put any pending payments on hold… We feel this precaution is necessary due to the current situation at SVB.”
Some companies even require a physical check to be sent to their headquarters.
These emails underscore the massive cascading effects that the SVB shutdown is having on countless companies across the entire tech industry.
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