Silicon Valley Bank is one of the world’s most successful and largest independent financial services companies and is most well known for its partnerships with major Silicon Valley tech giants such as Google, Apple, and Microsoft. However, in 2017, the bank felt the effects of a major crash that had devastating repercussions for the company, its employees, and the tech industry as a whole. Despite the hardship that it caused, the crash of Silicon Valley Bank is providing valuable lessons all over the world and is now being used to ensure that other companies and industry giants do not experience similar fates.
Though Silicon Valley Bank had a full 60 years of success, their 2017 crash was the result of mismanagement of funds, strategic errors, and high risk investments. As news of the crash spread, panic and chaos erupted within the tech industry. Employees were laid off, creditors became increasingly agitated and concerned, and the entire ecosystem of Silicon Valley’s tech industry was disrupted.
In the wake of the crash, Silicon Valley Bank has worked hard to reverse its financial misfortunes. They have instituted several new policies and procedures that have not only helped them improve their financial situation, but have made them a template for other financial institutions around the world to follow. The most important lesson that Silicon Valley Bank has taught the world is the importance of creating and maintaining a diverse portfolio. This has been a cornerstone of Silicon Valley Bank’s resurgence and allows them to maintain a strong balance sheet and minimize potential losses.
Additionally, Silicon Valley Bank has also learned the value of risk management. By implementing more stringent risk management protocols and tightening up the bank’s investment portfolio, they are now able to ensure that their investments are less prone to risks which can cause catastrophic damage.
One of Silicon Valley Bank’s most important lessons has been the importance of financial planning and forecasting. By looking at their finances in the short-term and long-term, the bank is able to make more informed decisions and ensure the sustainability of the institution. Additionally, Silicon Valley Bank has also emphasized the need to work with reputable creditors, as many of their creditors became extremely agitated after the crash, which damaged the bank’s reputation and caused a great deal of financial hardship.
Ultimately, the crash of Silicon Valley Bank has provided invaluable lessons that all organizations should take to heart. By following Silicon Valley Bank’s example, other companies can ensure that their finances will remain secure and that their investments will be safe from potential risks. In a world that has been hit hard by financial crashes and collapses, Silicon Valley Bank’s experience can be a template for other banks, businesses, and financial institutions to learn from and use to their advantage.
