Charles Schwab Customers Deposit $16.5 Billion During Banking Crisis

Charles Schwab says it saw “strong inflows” from clients amid this month’s banking crisis.

Between March 10 and March 16, customers brought $16.5 billion in deposits, the brokerage firm announced Friday (March 17).

That period coincides with the collapses of Silicon Valley Bank on March 10 and Signature Bank March 12 and the days of worry in the financial sector that those failures could spread to the larger financial system.

“Charles Schwab remains a safe port in a storm, driven by its conservative balance sheet, strong liquidity position, and diversified base of over 34 million account holders,” the company said in a news release. “We are confident in our approach and in our ability to help clients through all kinds of economic environments.”

The failure of SVB shows the importance of diversification, Drew Edwards, CEO at money mobility payments company Ingo Money, told PYMNTS last week.

“[The SVB collapse] had a lot to do with their heavily concentrated customer base,” Edwards said. “And it was also a small, tight-knit community connected to each other online and communicating in channels all day long that enabled such a quick run for the door.”

An obvious outcome of all this is likely a trend where companies begin to think about dividing their business across multiple banks, regardless of how strong the banks are.

“This can be done but will create inefficiencies unless their partners are set up to split volume across sponsor banks, which we already do in our business,” Edwards said.

He added that if he had a billion dollars, he wouldn’t keep it in just one place, saying, “I can’t stand single points of failure anywhere in our value chain.”

Treasury Prime CEO Chris Dean echoed that sentiment in a separate conversation last week with PYMNTS’ Karen Webster.

“There’s the concentration risk, which we’re all seeing now,” said Dean. “There’s the operational burden. And you have to get those things right. It’s clear to me that there’s not a single bank in the U.S. that can do that — but the U.S. banking system can.”

Of banking as a whole, he said, “There are a lot of different regulators, and different banks — and they’re held together in a cohesive whole.” His company’s aim, Dean told Webster, is to make that cohesiveness available in a streamlined manner for FinTechs.

That was the thinking behind Treasury Prime’s recent launch of OneKey Banking, an embedded finance application programming interface (API) that lets FinTechs and enterprises pick the best banking partner for a particular product or service.