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The Front Page of Global Fintech

The largest fintech community in the world. Subscribe to our newsletter to stay up to date on the latest in news opinions, and all things financial technology.

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Signals: The Silicon Valley Bank that never was

Signals: The Silicon Valley Bank that never was
The Morality of Banking in It’s a Wonderful Life

Like many readers, I chose to open my first business bank account at SVB. SVB is the bank that gave me my first mortgage. Uniquely, it's also the bank that bought my first company.

This essay explores my experience selling to SVB, working there, and our disagreements with them over our vision for what the bank could be. My story is unique. I got to work there but was always an outsider. I was a technologist in a place filled with bankers. And I had a clear idea of what I wanted to build in an institution unfamiliar with shipping new ideas.

In many ways, this directly relates to where SVB finds itself today.

The bank recently went into receivership because it mismanaged the duration of its bond portfolio, its communications around attempts to fix that, and the ensuing liquidity crisis from a concentrated deposit base.

But in my experience, all of these topics were actively talked about nearly a decade ago: a cyclical deposit base and the need to keep the duration of assets (which SVB didn’t originate itself) short duration.

When we sold Standard Treasury to SVB, we found ourselves up against a culture that sought consensus at the expense of decision-making and that focused its attention on the comfort zone of relationship banking while ignoring adjacencies that could have allowed it to diversify earnings through fee and payments income and increase its homegrown loan book. We weren’t the only ones advocating for strategic reorientation, and if SVB had pursued it, it's possible that the past couple weeks would have turned out differently.