In an official statement, Square Financial Services announced that it has kicked off its banking services offering.
Square is the financial company founded by Jack Dorsey that has already invested more than $200 million in bitcoin.
In the statement, the company says that its industrial bank, Square Financial Services, has begun operations after completing the approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.
Square Financial Services is a subsidiary of Square, headquartered in Salt Lake City, Utah, and its main purpose is to offer corporate loans and deposit-related financial products.
These could perhaps include some bitcoin-related products, given the company’s experience in this area and the fact that more and more companies seem to be interested in converting some of their cash reserves into BTC.
Square Financial Services enters the world of lending
The opening of Square Financial Services will also allow Square to expand into lending and banking tools for the usually disadvantaged part of the population. For example, already 58% of loans made through Square Capital go to women-owned businesses, compared to 17% in traditional lending, and 35% go to ethnic minority-owned businesses, compared to 27% in traditional lending.
Square’s Chief Financial Officer and Executive Chairman, as well as board member of Square Financial Services, Amrita Ahuja, said:
“Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we 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”.
At a time of such rapid and profound change, the companies that are quickest to catch up with new market trends could very quickly acquire large customer bases, effectively imposing new business models.
There are many financial firms with a similar approach to Square’s, and since in times of crisis and change innovation is precisely what can enable them to ride the wave of change, it is not at all unlikely that these new business models will spread, perhaps to the point of challenging traditional ones.