In the aftermath of the Silicon Valley Bank disaster, banks and FinTechs are reconsidering what needs to change.
According to Form3 CEO Michael Mueller, “nothing ever moves very quickly in payments.”
According to Mueller, the recent 12 months illustrate that some long-term trends are intensifying, including the demand for dependable payments infrastructure in financial services.
What We Learned from SVB
According to Mueller, the SVB experience proved that some resilience is already incorporated into the payment technology used by banks. These financial institutions are quick enough to respond to market events and volume spikes using digital methods.
He says, however, that the circumstance has created an opportunity for scammers to exploit.
When SVB collapsed in mid-March, the most pressing concerns for enterprises — and, by extension, banks and FinTechs — were whether deposits could be accessed and if they could make payroll and pay suppliers.
The result for businesses who had their cash tied up with SVB as their main source of banking services may have been a severe halt in operations or perhaps insolvency. Simply put, a company’s capacity to make payments may make or ruin it.