The collapse of $212 billion-strong lender Silicon Valley Bank sent shockwaves through financial markets in the middle of March. With hundreds of digital-first companies relying on SVB for their day-to-day operations, many across the industry sounded alarms at the severe repercussions of such a critical company folding overnight. Responding to cries for action, national regulatory bodies moved quickly to prevent the worst of the predicted consequences.
Among all the furor, however, there are many voices within the industry that have urged calm in the face of SVB’s collapse. Indeed, some have indicated that the response to this crisis has proven the stability of neobanks and other fintech entities when compared to traditional financial institutions, which have arguably suffered more from the end of SVB than their newer counterparts.
“The economy in the fintech universe is extremely strong. And I think there's going to be places for people to go,” said Steve McLaughlin, Founder and Chief Executive Office of FT Partners, in a recent television appearance discussing the SVB debacle. “Some of these [neo]banks are very well-heeled and don't actually have risky assets on balance sheet like some of the larger banks. So we're very bullish on all things fintech, I would say. I think there's a great opportunity for fintech to shine.”