Large US Banks Inundated With New Depositors As Smaller Lenders Face Turmoil

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JP Morgan and Citigroup, two of the largest banks in the US, have reportedly been overwhelmed with deposits following the collapse of SVB Financial Group’s online banking platform. Customers of SVB’s digital-only bank, which served startups and venture capitalists, have been searching for alternative banking options following the recent crash.

SVB Financial Group’s digital-only bank closed by authorities, prompting a search for alternative banking options by its customers.  Many of its clients stranded without access to their accounts, leading to increased demand for deposit accounts at JP Morgan and Citigroup.

JP Morgan and Citigroup see increased demand for deposit accounts

According to familiar with the matter, JP Morgan has already exceeded its deposit goals for 2023 as a result of the increased demand. Citigroup, too, has seen a significant uptick in deposit accounts, with some customers reporting delays in opening accounts due to the high volume of applications.

The influx of new customers could lead to increased revenue for the banks in the coming months. JP Morgan and Citigroup are among the largest banks in the US, with extensive networks of branches and ATMs across the country. The increased demand for deposit accounts could translate into increased profits for the banks as they earn interest on deposits and charge fees for services.

The SVB Financial Group outage highlights the potential risks of relying on digital-only banking platforms. While digital banking offers many benefits, such as convenience and lower fees, it is not immune to the occasional disruption. As a result, many customers may be more inclined to choose traditional banking options, such as those offered by JP Morgan and Citigroup, which have established reputations and extensive branch networks.

Looking for alternatives

There has been a growing trend among people who have lost faith in traditional banking institutions and are seeking alternative options. Cryptocurrencies like Bitcoin have emerged as a potential solution, as they offer a decentralized and secure way of managing financial transactions. This has led to a surge in demand for cryptocurrencies, with more and more people looking to invest in them as an alternative to traditional banking. Bitcoin has seen a significant increase in its price in 3 days, soaring to  $25,000.

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Conclusion

In conclusion, the collapse of SVB Financial Group’s online banking platform has led to increased demand for deposit accounts at JP Morgan and Citigroup. The influx of new customers could lead to increased revenue for the banks in the coming months, highlighting the potential benefits of traditional banking options in an era of digital disruption.

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Jem Benny
I am a senior stock trader. I think it is really important to share the knowledge and the experience with rookies. "Must know" and education content creator. I have been following the events of the crypto industry since 2011. I joined Walletinvestor as a content creator providing technical analysis and overviews on the current market situation.