There are some ideas:
First
What we experienced with SVB was a capital flight that materialized due to poor communication on the part of the bank and the amplification of that message on social networks and communication platforms, such as Slack and Messenger. When talking to a dear friend of the media a few days ago, he jokingly told me: given the characteristics of current financial services, depositors do not line up to withdraw their money and it is not possible to close the door to prevent people from taking your money.
For the same reason, today more than ever, communicating solidity and being careful in what is communicated is essential. You don’t want to create confusion or panic because, in the blink of an eye, an institution can fall apart and we’ve already seen it. The way SVB talked about his situation with a lousy Press release full of numbers, but without narrative, it was the beginning of the end of the debacle.
Second
SVB highlighted the incredible systemic risk caused by the lack of interest from traditional banks in the startup business. It was almost impossible for a startup to open accounts in other banks, which meant that SVB suddenly had a very high percentage of the accounts of Latin American startups (and the funds as well); If the US government had not backed those deposits beyond the $250,000 guaranteed by the FDIC, the impact on the ecosystem and the Latin American economy as a whole would have been enormous.
Third
Many of the founders who manage fintech today have lived in a time of financial stability and do not know how to navigate a crisis. More than ever, surrounding yourself with people who have experienced devaluations, accelerating inflation and unstable interest rates is important. We cannot assume that the exchange rate, interest rates or inflation are going to be constant variables. This year alone we have seen the Mexican peso appreciate significantly and lose value in a couple of days. Rates have continued to rise, putting pressure on fintechs that rely on debt to run their business; intermediating between financial liabilities will have a higher level of risk and finally maintaining multi-currency treasuries will have an additional degree of complexity.
Quarter
The above entails an accelerated evolution in how startups operate that seems to me to be counterintuitive. Today they will have to establish risk assessment mechanisms that might seem bureaucratic and unnecessary, but in the long run they can be extremely useful and save them from something like what we have just experienced.