International Business

New York bank to service fintech firms

  • Big-city bank: Signature Bank's corporate headquarters at 565 Fifth Avenue in New York (Photograph by Google Street View)
  • Fintech friendly: Joseph DePaolo, CEO of Signature Bank
  • Welcome development: David Burt says the lack of banking services has been an impediment to the island's fintech sector

Bermudian-licensed fintech companies finally have an option for US banking services.

Signature Bank, a New York-based full-service commercial bank, will aim to fill the void left by local banks who have shied away from the fledgeling sector.

David Burt, the Premier, who spearheads the Government’s fintech efforts, said: “Signature Bank’s willingness to consider Bermuda-licensed businesses for banking services is a significant vote of confidence in and endorsement of Bermuda’s efforts to create a leading, high-standard regulatory regime for fintech business.”

He added: “As a result of our business development and promotional efforts, 66 fintech companies have been incorporated in Bermuda.

“However, the absence of banking services for fintech companies has been an impediment to those companies who are looking to establish a physical presence in Bermuda.”

To tackle the problem, the Government amended the Banks and Deposit Companies Act 1999 in July last year to create a new restricted banking licence.

The Government is hoping to spur growth from new fintech entrants attracted by the island’s regulatory framework for digital asset business and initial coin offerings, created by legislation passed last year.

Signature Bank was founded in 2001, went public in 2004 and trades on the Nasdaq Stock Exchange. It has a market capitalisation of about $7.4 billion.

A New York Times story in July last year described Signature a “go-to lender” to the family of Donald Trump, the US President.

Signature Bank “has agreed to provide a full range of banking services to companies that meet Bermuda and Signature Bank standards”, a government press release stated.

The statement did not mention whether the bank had any plans for a physical presence on the island.

Signature was the first bank to launch a New York regulator-approved, blockchain-based platform for managing money transfers between clients. The platform, known as Signet, was launched before JPMorgan announced its own, similar JPM Coin two weeks ago.

Joseph DePaolo, Signature’s chief executive officer, said: “Since launching at the start of the year, our blockchain-based Signet system has on-boarded multiple clients who are using it to send each other millions of dollars, 24 hours a day, seven days a week.

“We look forward to vetting Bermuda’s licensed fintech companies referred to us by the Government of Bermuda as potential clients.”

He added: “Signature Bank is one of the few banks in the US that will provide deposit accounts and corporate debit cards to cryptocurrency start-ups, but we are seeing non-crypto businesses signing up as well.”

John Tamberlane, vice-chairman at Signature Bank, said: “We are impressed with the progress Bermuda has made to date on a regulatory front, and look forward to working with the Government of Bermuda to help promote growth and expansion of the fintech and digital asset industry in that country.”

Premier Burt added: “Bermuda is setting itself apart by providing regulatory certainty combined with a world-renowned reputation for transparency and the highest standards of global compliance.

“Signature Bank’s endorsement showcases how Bermuda is competitively placed to advance the pace of the digitisation of global commerce as modern technology is applied to the highly regulated world of finance.”

Signature Bank will immediately start accepting banking applications from Bermudian-licensed companies.

For more information on applying for an account with Signature Bank, issue digital assets or be licensed to conduct digital asset business in Bermuda, contact the Fintech Business Unit at fintech@gov.bm or visit www.fintech.bm