As Silicon Valley Bank shuts down, bankers at JPMorgan have been working around the clock to take on hundreds of accounts of SVB clients, sources with knowledge told On The Money.
According to one venture capitalist, bankers “stayed up all night opening accounts” for frantic SVB clients looking to move their funds to a safer bank.
Word quickly spread that JPMorgan — which has built out its presence in San Francisco in recent years — was a well-oiled machine, sources told The Post.
“This was a war room situation … everyone was filling documents as fast as they could,” a source close to the bank told The Post.
For customers who already had an account at JPMorgan, it was simple to transfer funds from SVB to either an existing account or open a new account.
For clients desperate to open first-time accounts, JPMorgan has expedited the KYC (know your customer) process — a regulation that requires banks to verify clients’ identities and understand their financial activities. The KYC process, which can often take a week or more, is now taking just two days in some cases, sources with knowledge told The Post.
Even as bankers are eager to take on new clients, one insider said they felt bad for management at SVB. “It’s unfortunate … SVB didn’t do anything wrong — they weren’t a bad bank,” the source added.
A spokesperson for JPMorgan declined to comment.
Still other venture capitalists advised tech founders to simply walk into a local bank like TD Ameritrade or Wells Fargo, since it’s easier to open an account in person. One VC advised TD has the “lowest bar” to opening an account.
To be sure, most businesses are not benefiting from the SVB debacle. As Silicon Valley Bank is shuttered by regulators, software companies and other tech firms with accounts at the troubled bank sent urgent messages to clients: Don’t wire money to our SVB account, according to emails reviewed by The Post.
The memo these tech companies are sending to vendors underscores the desperation that companies with accounts at SVB feel as their financial lifeline is closed.
One message reviewed by The Post read, “Due to the current financial situation at Silicon Valley Bank, we kindly request that you hold any pending payments … we feel that this precaution measure is necessary due to the current situation at SVB.”
Some companies are even requesting a physical check be sent to their headquarters.
These emails underscore the massive ripple effects that SVB’s shuttering is having on countless companies across the entire tech industry.