An Ode (or maybe a ditty) to Silicon Valley Bank With a Little Help from ChatGPT

The news this week was all Silicon Valley Bank (SVB), and that makes total sense. The lure of money, technology, and mixed with the location is the story of upcoming Netflix documentaries. But I wanted to be a bit more reflective and thought this story needs a sonnet, or perhaps an ode — just something more classical. So, in honor of tech and banking, I decided to let my AI friend, ChatGPT, take a swing at creating a little ditty. You can pick any genre you want, but I hummed it to big-hair, heavy metal and it seemed right. Here we go:

Verse One:
In Silicon Valley, where dreams are made
There's a bank that's seen better days.
Silicon Valley Bank, once a shining star
Now it's fallen hard, hit by the financial bar.

First of all, I need to come out and say that I loved SVB. I mean, it was a bank geared towards FinTech! I personally think we need more banks that look to service specific markets because of the expertise that they can bring to the forefront. But there is such a thing as too much of a good thing. Portfolio monitoring and sound management of that portfolio at EVERY level are required. In the case of SVB, it was too many cheap bonds that just got worse in a changing rate environment.

Verse 2:
Startups and entrepreneurs, who once looked to you
Now must look elsewhere, for funding anew.
The collapse of Silicon Valley Bank, a bitter pill to swallow
In a world of tech giants, even the strongest can follow.

At the Acquired or Be Acquired conference, the phrase “2023 is the year of Deposits” was used a lot. And when you have a bunch of clients who are draining those deposits to try to keep things running, as in the case of multiple FinTechs in the SVB portfolio, you have to again go back to the challenge of how you are monitoring that portfolio. Size matters when you look at a deposit account, but trends in that deposit account matter much more, in my opinion!

Verse 3:
But in the aftermath, we see hope on the horizon
A new generation of banks, with eyes that are wiser.
All you other banks we are counting on you,
To be a beacon of success, to those who are friends true.

2008 was a rough year. First quarter 2023 may be a tough quarter, but I have confidence in the banking system. We are better as an industry than we were back in 2008. Banks remain well capitalized and well positioned to continue to serve their customers and communities. Regional and community banks have always been focused on safety and soundness as part of their traditional and relationship-based business model. This is not a run on banking. This is a few bad apples, and to stay on the music theme, I’m quoting The Osmonds to reassure you that “One bad apple don’t spoil the whole bunch.”

And now for the chorus to bring it to an end…

Chorus:
Silicon Valley Bank, oh how the mighty fall
Your collapse a reminder, to heed the warning call.
The risks we take, come at a great cost
May we learn from your downfall, and never again be lost.

We’ve got this! Sure, there may be a few other banks that have really bad stock trades over the next week or so, but in the long run this entire system is built on trust. I know way too many smart and — best of all — honest folks in this industry to give up hope, but we have to stay diligent. If there is a theme to this crisis, it is this: Stick to the fundamentals, and monitor those fundamentals. To quote my AI-generated ditty, “May we learn from your downfall, and never again be lost.”

Author Bio

With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction.

As the Vice-President of Product Management at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University.

Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation.

Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.