New York based Signature bank announced this week that it is focused on offering their institutional clients real-time settlements for digital trades. Signature, which came on to the scene in late 2018 has always focused on commercial clients. At the center of its expanded offering is a new agreement with Prime Trust, one of the bank’s primary competitors in a market that is just getting started. The agreement shows a departure from traditional banking rivalries.
The CEO of Signature Bank Joseph DePaolo stated, "Any Signature Bank commercial client participating on the Signet platform has the ability to make instantaneous payments in U.S. dollars, any time without transaction fees. The relationship we have forged with Prime Trust will allow their clients to immediately settle their transactions through the revolutionary Signet platform."
What is interesting about the proposition is that the service will allow Prime Trust clients and Signature Bank clients to make payments without a third party involved in the transaction, and thus eliminates transaction fees. Signature Bank’s commercial clients must have a minimum of a $250,000 count in order to utilize the bank’s services.
The bank already claims to be a player in crypto transactions with millions of dollars a day in transactions across hundreds of clients. Prime Trust launched its settlement network as a head to head competitor to Signature in the middle of 2019, showing how fast this market is moving.
However, banks are not quick to work with cryptocurrency companies just yet due to risk and compliance, so the market is not large and thus competition for market share is intense. Despite the present size of the market, startups get a strong look from venture capital and private equity firms willing to bet on an eventual winner. Competition has already helped customers with costs.
Prime Trust does not charge custodial fees in order to gain market share, forcing some competitors to do the same or leave the market. The key for traditional banks is to just continue to analyze where the trends are going in terms of technology and what it is capable of doing. In this case, the agreement and the technology used by Signature Bank and Prime Trust is cutting transaction fees.
- PPP: SBA Issues Guidance on Changes in Ownership and Full Forgiveness Eased for Smaller Loans
- First Citizens, CIT Plan Merger to Create $100bn Bank
- OCC Levies Third Major Fine This Month
- ABA Urges DoJ to Update Market Data to Help M&A Governance
- JP Morgan Chase Outperforms, Good Sign for the Banking Industry