Wasabi CFO On Doing Business With SVB: What Worked, What Didn’t And What’s Ahead
Joseph F. Kovar
“If you’re asking why would companies bank with them, tech companies have a unique profile that is not necessarily consistent with the way that conventional banks look at target companies. Tech companies, in particular venture-backed tech companies, burn money. They are all about growing really, really quickly. And so many of the traditional banks will look at a profile like that and say, ‘Too risky for me. I don’t know you. I don’t want to be with a company that is burning money,’” says Wasabi CFO Michael Bayer.
Just to be clear, you lilked working with SVB. On the Friday SVB failed, you told your customers to not send payments to your SVB accounts. But on the following Monday, did you go back to your customers and tell them to go back to sending payments to SVB?
Yes, the few customers that we told not to send us just while we were in that pause, we told them to please send their payments there. That account is up and functioning. SVB is business as usual. And we also told them that we probably would be changing our remittance details sometime in the near future, which is activity that’s underway. But I don’t want to cause our customers any disruption in their operations. And right now, anyone who is dealing with a tech company is probably somehow affected by this. If you’re reaching an audience that thinks about these kinds of things, there are all sorts of fraudsters out there who are trying to capture companies in their weak moments with their guards down, where they’re contacting people saying, ‘Please send your payments here.’ Well, that wasn’t the company that he knows.
So we’re being very careful. We’ve always had protective procedures and controls in place around our payments and our receipts. And we continue to have that. But I think CFOs and companies who don’t have CFOs and who may not have the kind of control environment that we strive to have, should be extra vigilant these days because there are risks that are out there.
And by the way, I think everyone, every CFO, is now reminded that whether you are with SBV, or any other bank, you should make sure that you know what your risks are and have mitigation plans in place all the time. That’s why on that Friday we just said, ‘Don’t wire your money here.’ And we didn’t know what we’d be doing on Monday. But the Fed solved it. But we would have solved it on our own when Monday came around.
Our customers are entrusting us with their data. So first and foremost, it’s important for us to make sure that we can protect their data. And then next most important is, we have to run a business. So we have to assure our customers that we’ve got this covered. We’ve been doing this a long time. They don’t need to be concerned about us. But I do think it’s good to remind them in every venue that everyone should be vigilant in this environment about how resilient your operations are. We talk a lot as a company about cyberthreats and all sorts of risks to your data, and that in primary storage, or secondary storage, or tertiary storage, you should be thinking about your data resiliency all the time. And as a CIO or a CTO, that’s your whole job, right? Making sure you don’t lose your data. As the CFO, it’s the same thing. And now we’ve learned you can’t even count on the banking system anymore. It’s fine. Just put that in as yet another thing you have to think about, and be hyper vigilant today.
So as Wasabi expands its relationships with the large money center banks, will you continue to use SVB as your as your primary payment account?
I’m not going to comment on that. But I’d say it’s more likely than not that I won’t. But that’s not because of what just happened. It was something we were doing already, where we want to be able to serve all of our customers worldwide with the best service, the best front end to Wasabi everywhere it is. And part of that is how we can interact with their payment systems. And there are some more modern electronic banking mechanisms that we want to be able to provide with greater automation that we’re supporting with internal systems as well as external systems and external vendors. We just want to get the best footprint possible. So we are headed that way anyway.