The anniversary of the collapse of Silicon Valley Bank (SVB) – the institution popular with venture capital firms and technology start-ups – has prompted many to consider how much has changed.

Now under new ownership, the former bank – and its subsidiaries – are doing well. In the UK, SVB UK was acquired by HSBC UK Bank and absorbed into a new entity, HSBC Innovation Banking.

Meanwhile, the US part of SVB – the main subsidiary of SVB Financial Group – was acquired by First Citizens Bank & Trust Company. The bank has been marketing heavily to make the point that SVB never went away and is very much still in business. SVB’s President Marc Cadieux reportedly said that 81% of customers from before the collapse still have accounts at SVB, and thousands who left have now come back. However, the paper reported many are not convinced and are reluctant to ‘get burned twice’.

This focus on the safety of deposits continues one year on after the SVB failure. Law Helie, General Manager of Consumer Banking at nCino, a cloud-based banking software company, comments on the impact of the SVB collapse. “Financial institutions and their customers are taking a much more cautious approach to banking one year on from the SVB collapse,” he tells Treasury Today. Lenders have re-emphasised the need to build deposits as a shield against volatility, while customers are also searching for more security and limiting their risk exposure to the limits of deposit protection schemes.

As previously reported by Treasury Today, the collapse left some treasurers in a sticky situation. California-based Canary Medical, for example, was faced with the prospect of losing US$5m. Fortunately, the authorities stepped in to insure all deposits. On the treasury side, however, there were complications in the operations as the ERP [enterprise resource planning] system all ran through SVB, causing a headache as all their processes needed to be restructured.

This company was lucky as its deposits weren’t all with SVB – an important lesson about concentration risk. However, not all companies had this luxury. A previous article noted how the adage of not ‘putting all your eggs in one basket’ was not helpful for many. As Tony Carfang, Managing Director of The Carfang Group said, it was easy to say that such customers should diversify, but for many, their credit agreements said they could not do that.

Carfang also noted how the SVB collapse had been a long time coming because the regulations that were introduced since the global financial crisis made money market funds less attractive and cash flowed to banks, in the form of uninsured deposits. SVB had been investing in government bonds, which were purchased when interest rates were low. As rates rose, the value of the bonds fell and the bank sold assets at a loss to meet its liabilities. When the bank said it needed to raise more capital, panic ensued and there was a run on the bank.

Now that the dust has settled on the SVB collapse, is there a possibility something like this could happen again? Helie at nCino doesn’t think so. “Regulations have been put in place to try and mitigate the risk of another SVB collapse,” he says. He comments that although New York Community Bank (NYCB) recently ran into trouble – and needed a US$1bn capital infusion – there has not been the same level of concern spreading to other financial institutions. “It seems the public has a better understanding of the underlying reason for the issues NYCB is having,” he says.

Helie also comments that in the US, financial institutions are actively pursuing ways to strengthen their deposit bases by reviewing the deposit-protection limits. Some, for example, have imposed restrictions on the maximum amount of cash that can be held in an account. Meanwhile, in the UK, the government has published a consultation paper on enhancing the Special Resolution Regime for smaller banks to mitigate future bank failures.