SVB crash opens door for treasury management innovation
Companies will look to automate multiple bank account management
The collapse of Silicon Valley Bank presents an innovation opportunity for fintechs in treasury management as more bank clients look to multibank strategies to ensure security in their capital.
For example, as companies look to diversify their balance sheets for risk management purposes, they’ll need a snapshot of all of their accounts in one place. That’s where innovation comes in, Andrea White-Kjoss, managing director at Long Beach Accelerator, a cohort for startups to find funding and market fit, told Bank Automation News. “There’s going to be opportunity for innovation in really complex balance sheet management.”
Embarking on a multibank strategy isn’t simple, Tal Kirschenbaum, founder of finance operations platform Ledge, told BAN. “The reality is when you want to manage multiple different accounts, especially with multiple different banks, it means that it makes it much more difficult to have good, accurate visibility into a multiple number of banks and multiple number of bank accounts.”
Innovation can alleviate those pain points, he said. For example, Ledge works with finance teams from a company’s banking providers and automates a lot of the work they traditionally performed manually — from accounting solutions to integrating with payment providers.
At Ledge, “By integrating to multiple different banks, we’re able to solve that [friction] on a pretty massive scale in an automated fashion,” Kirschenbaum said.
The SVB failure in financial services is really “a lesson in treasury management,” White-Kjoss said, noting that now companies are recognizing the need for diversification of assets — and fintechs can help balance those multiple accounts.
Long Beach Accelerator, which launched in February 2021, has had 29 cohort companies graduate, facilitated $12 million investments through Long Beach Accelerator and other investors and has made $2.3 million in cohort revenue, according to the Long Beach Accelerator website. Current cohort fintech participants include intelligent automation platform MyRuck and data analytics platform SaraniaSat.
