Digital Banks Emerge as Winners in Wake of Silicon Valley Bank Collapse.
The collapse of Silicon Valley Bank has led to a surge in demand for digital banks like Mercury, Brex, Meow, Arc, and Rho, which have seen a significant increase in deposits and new customers. However, it remains to be seen if these digital banks can retain their new customers. While the big four banks may be slower to open accounts, they offer startups and the venture capital community a level of attention and focus that digital banks may not be able to match. Digital banks like Mercury partner with traditional banks to hold customers' deposits in insured accounts, and they split up customer funds across a network of dozens of banks to broaden the safety net.