NON-BANK FIRMS OFFER SAFE DEPOSIT SERVICES

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V22 2019 INDEX E-SYLUM ARCHIVE

The E-Sylum: Volume 22, Number 47, November 24, 2019, Article 26

So who's had to close and move a safe deposit box when their bank branch closed? This Bloomberg article discusses new businesses offering safe, trusted storage outside of traditional banks, -Editor

A few blocks from Grosvenor Square in Mayfair, 46 Park Lane resembles a private club with wood-paneled walls and an ornate fireplace dating back to Britain’s Victorian era.

But down a flight of stairs is one of the most secure rooms in London. Built by IBV International Vaults, the steel-walled stronghold is scheduled to open next month and will cater to billionaires looking for a place to stash their most prized possessions.

“We’re getting calls every week about a room available for 2.5 million pounds ($3.2 million) a year,” said Sean Hoey, managing director of IBV London, referring to an apartment-size space. The firm, which also has 550 safe-deposit boxes on site and room for about 450 more, is betting on London’s reputation as a “safe haven,” even with Brexit.

This will be IBV’s sixth location, and it’s hardly the only such firm fielding queries from the wealthy. From London to Switzerland to parts of the U.S., the rich are looking to store precious metals, cash and cryptocurrency. For some, it’s the threat of a global recession. Others are avoiding bank deposits as negative interest rates force lenders to charge for holding cash. Many are concerned about natural disasters.

“We’ve seen extraordinary demand for safe-deposit boxes ever since we started offering them in 2015, and that demand has really gone up since the late summer,” said Ludwig Karl, a spokesman for Swiss Gold Safe Ltd., which operates high-security alpine vaults. “Most people say they are planning for difficult economic circumstances.”

It’s a similar story for Sincona Trading AG, a precious-metals dealer with more than 1,000 safe-deposit boxes for rent in central Zurich. It had scores of empty boxes three years ago, but now it’s renting about five a day, said Benoit Schoeni, a managing director.

“There has been an extreme demand,” he said. “It won’t take too long until we’re full up.”

Safe-deposit boxes can range from a few centimeters in height to the size of a kitchen cabinet. Another option are free ports -- warehouses in tax-free zones such as Singapore, Geneva and Delaware favored for storing art, but which typically limit the amount of time that pieces can be held.

In the U.S., safe-deposit boxes also have largely fallen out of favor as banks close branches and opt not to install them in new ones. Demand has waned in recent years, according to JPMorgan Chase & Co. and Bank of America Corp., the nation’s two largest lenders.

“Much of the decline can be attributed to clients opting to store documents online, especially younger clients,” said Bank of America spokesman Don Vecchiarello.

This article validates a thought I've had for a while now. There is a market for safe storage outside of a traditional bank. My own local bank keeps closing branches. As a coin collector I've had a safe deposit box since I was old enough to sign the papers. What happens when the last branch closes? People like us will still want and need safe deposit protection for our collections. What do we do - just buy and install a home safe? It should be profitable to build up a business offering trusted, safe storage for valuables. I don't need a room, but I'm sure some people do. Just a deep box for me, thank you.

So I asked Dr. Google and it turns out a local ex-banker in my area already had that idea, opening Commonwealth Vault & Safe Deposit Co. five years ago. I added images from their web site. -Editor