Digital Leader Show: SVB Collapse’s Effects on Banking & Future FinTech

This week we're discussing the collapse of Silicon Valley Bank, its effects on the banking industry and the future of financial technology with Fintech expert Patrick Leonard, PLUS other headlines for Digital Leaders from the world of enterprise technology.

About the Show:

Each week, we explore some of the key issues defining our ongoing transformation into digital enterprises and societies. Join us for a unique, unfiltered discussion of business and social leadership at the intersection of technology and the humanities, helping you to become a Digital Leader.

SHOW NOTES (by ChatGPT!):

Weekly show discussing business, tech, and humanities hosted by Digital Enterprise Institute & Institute for Robotic Process Automation, with guests discussing Silicon Valley Bank's collapse.This week's episode discusses the effects of Silicon Valley Bank's collapse on the economy, banking industry, and future of fintech. : Special guest fintech expert Patrick Leonard will analyze the impact of the collapse.

Additionally, the episode covers headlines for digital leaders from the world of enterprise technology, including updates on Facebook, Apple, and the gig economy.

Amazon is disrupting the healthcare industry with its app-based healthcare services. : Amazon's healthcare services are identical to concierge medicine but at a tenth of the price.

Amazon's technology skills will transform the healthcare industry, creating something that goes far beyond the current test markets.

Silicon Valley Bank's liquidity crisis led to a quick sale of bond portfolios : The bank had held their financial assets in long-term 'held to maturity' assets, making it difficult to meet customer needs and find liquidity

Blaming the FED for raising interest rates is not justified; rather, the bank didn't align their risk capabilities with their strategy and risk appetite

Understanding counterparty risk is crucial in avoiding financial losses : Recent incidents highlight the need for proper risk analysis and management of banks to avoid financial meltdown

Proper risk capabilities and infrastructure should be evaluated frequently to ensure capabilities match the company's risk profile

Silicon Valley Bank's conservative image and market targeting were erroneous : SVP had a high concentration of risky venture-capital backed companies, which made it vulnerable to the increasing interest rates and capital infusion needs of its customers

The bank did not have adequate processes, organization, risk management measures or control systems to monitor and sense risks and respond to them

Financial organizations should prioritize risk identification and build a flexible tech stack : Organizations need to identify and prioritize all potential risks

Then, they can monitor and aggregate information around those risks

Additionally, organizations must build a flexible tech stack that can support the changes in the risks

Regular dialogue around risk is crucial for organizations : Failure to understand risk can lead to wrong decisions and unplanned actions

Having open conversations around risk can lead to better outcomes and prevent crises

Bad management and negligence led to the bank failure and we need to find a middle ground to avoid future collapses. : This isn't a systemic issue, but we need to help regional and small banks build capabilities to avoid collapse.

There needs to be a balance between stress testing and activities for larger banks and not doing nothing for regional banks.

About the Speakers:

Daniel Goodstein runs multiple technology associations with over 130,000 member executives worldwide and is a go-to resource for enterprises across the globe looking for assistance with digital transformation, AI, automation and outsourcing. He is also a seasoned go-to-market expert helping drive sales, marketing and media strategies for several Fortune 500 tech firms and startups alike.

Carlos Alvarenga is a researcher, author & coach, and is an educator with Georgetown University and Senior Research Fellow & Adjunct Professor at the Robert H. Smith School of Business at the University of Maryland. He was previously the Executive Director of World 50 Labs, the member-innovation team at World 50, Inc., a Principal in Ernst & Young’s Advisory Practice and a Managing Director at Accenture.

Patrick Leonard has over 20 years of experience leading complex, global transformation programs that deliver value across front, middle and back office functions. Patrick applies his expertise across finance, technology, data, and risk functions to help his clients develop integrated solutions that enhance their operating models, align risk profiles to strategic imperatives, enrich analytics and decision making, and improve profitability. Patrick has served both public and private companies in a variety of industries, including financial services, telecommunications, media and entertainment, energy, technology, and consumer products.