SVB’s tech failings were a problem long before the bank run that led to its demise, critics say
Nikolas Kokovlis | Nurphoto | Getty Images
Silicon Valley Bank’s historic meltdown last week was largely attributed to deteriorating business conditions in the firm’s concentrated customer base and an ill-timed decision to invest billions of dollars in mortgage-backed securities.
But long-time clients and others with intimate knowledge of how SVB operated say the bank did itself no favors. Between the bank’s refusal to upgrade its technology to meet the demands of modern-day businesses and its treatment of many startup customers, SVB’s problems extended beyond its risk profile and a challenging economy.
An ex-SVB manager, who worked on risk initiatives and asked not to be identified, said the bank remained technologically stagnant even as it was a haven for startups that had an eye for cutting-edge software and products. As she described it, “the backend of the bank is all bubblegum and wires.”
Three startup CEOs who bank with SVB agreed, telling CNBC that the user experience was often clunky and at times, slow to fulfill requests.
David Selinger, CEO of physical security company Deep Sentinel, told CNBC that SVB fumbled its response to the Covid pandemic, after the government initiated the emergency payment protection program (PPP). The loans from the program were designed to allow companies to continue paying employees during the economic shutdown.
“It completely failed in the midst of all these companies needing to get their PPP funds,” said Selinger, who spent the majority of Friday trying to pull assets out of SVB.
Selinger, a former Amazon executive who has the backing of Jeff Bezos for Deep Sentinel, said his company had tried to use various automated services provided by SVB but ended up having to do everything manually, “clawing hand over foot to try to get to PPP funds, because the fulfillment didn’t work.”
“I love SVB, but that was horrible for our business,” he said. “They had written some code to try to make it faster and none of it worked.”
One CEO, who had millions of dollars housed at SVB and asked not to be named, described the bank’s system as terrible, slow and “the worst in the industry.” He said the tech looked like it was built in 2002.
In April 2020, Tech Crunch reported on other SVB customers complaining that the bank mishandled the PPP process.
CNBC sent an email to SVB’s press address requesting a comment for this story but we haven’t yet received a reply.
SVB’s swift collapse began late Wednesday, when the bank told investors that it sold $21 billion worth of securities at a $1.8 billion loss and was seeking to raise additional capital amid a decline in deposits. By Thursday, as the stock was plunging and venture firms were telling portfolio companies to pull their money, Twitter lit up with people offering advice and making pleas.
Some SVB defenders told their followers that they needed to band together and support the 40-year-old bank, which has long been central to the tech ecosystem. One startup founder, Robert McLaws, responded to a particular tweet and offered a very different perspective.
“As an @SVB_Financial customer for the last 5 years, they are terrible as an actual bank & are getting what they deserve,” wrote McLaws, CEO of BurnRate.io. “Their tech stack has not moved 1 iota, their fees are punitive, and if you’re not in SV you’re invisible.”
Villi Iltchev, a partner at Two Sigma Ventures and the author of the original tweet, responded, “I have the opposite experience. I have loved every interaction with them.”
Another founder and CEO, who’s based in Los Angeles, told CNBC he considered leaving the bank nearly a year ago after it took six weeks and five phone calls to transfer the funds needed to open the company’s head office. He has $750,000 with SVB, which is triple the amount insured by the Federal Deposit Insurance Corporation.
The FDIC seized SVB on Friday following a run on the bank by depositors. It was the second-biggest bank failure in U.S. history and the largest since the financial crisis 15 years ago.
Banking regulators devised a plan Sunday to shore up deposits at SVB, as they try to quell a feared panic over the firm. The central bank said it’s creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the SVB failure. In addition, regulators said depositors at both SVB and Signature Bank in New York will have full access to their deposits.
Roughly 95% of SVB’s deposits are uninsured, which makes the bank particularly unique in that it serves primarily businesses. However, the risk of contagion led to a plunge on Friday in shares of other regional banks such as First Republic and PacWest Bancorp.
Lack of mobile security
The former SVB manager, who was hired to prepare the bank for a rapidly growing asset base, said that implementing biometric authentication on the bank’s mobile banking app was one of its technical failures. Startup finance execs were left with a “password-based login” to protect their funds, because building authentication into the app “was seen as too expensive, complicated to do and not value additive to clients,” the person said.
Even attempts at shoring up its internal tech through a partnership with payments giant Stripe, ended up flopping, according to the former SVB employee.
In 2016, SVB announced an agreement with Stripe to launch a product called Atlas “to give entrepreneurs everywhere access to the basic building blocks for starting a global internet business.” Approved founders and execs would receive a tax ID number, a U.S. bank account from SVB, a Stripe account to receive payments from anywhere and services like tax guidance from PwC, legal help from Orrick, Herrington & Sutcliffe “and tools and credits from Amazon Web Services.”
But the ex-SVB employee said after the big announcement “technically SVB wasn’t able to pull it off on our end.” The lack of investment in SVB’s technology made the job of risk compliance difficult, the person said.
Atlas works with Mercury Bank and Novo Bank, according to its website.
Stripe did not immediately offer a comment for this story.
While SVB was “undoubtedly one of the best banks” for startups, the person continued, as clients grew they were “forced to switch” because of the bank’s inferior technology.
— CNBC’s Ashley Capoot contributed to this report.
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If you’ve been eyeing the all-electric G-Wagon, Mercedes-Benz just sweetened the deal – but only for a limited time.
According to a dealer bulletin, the 2025 Mercedes-Benz G 580 with EQ Technology – AKA the electric G-Wagon – now comes with $9,500 in lease cash, up from last month’s $7,500. That’s a 27% jump in savings. The move comes just weeks before the $7,500 EV lease tax credit loophole closes on September 30.
Like most EVs leased in the US, the G-Class has been able to qualify for the credit even though it’s excluded from purchase incentives. That benefit is about to disappear, which likely explains why Mercedes is boosting the offers now.
The electric G-Wagon doesn’t come cheap. With a base price of $162,650, the $9,500 incentive amounts to only a 5.8% discount. The SUV also carries a steep advertised lease: $1,869 per month for 36 months with $14,613 due at signing. Factor it all in, and you’re really paying about $2,275 a month for 10,000 miles a year. Current Mercedes deals run through September 2.
For context, the 2025 G 580’s lease money factor now sits at 0.00180, which works out to around 4.3% APR – lower than the standard rates previously on offer.
Performance-wise, the electric G-Wagon earns an EPA rating of 62 MPGe and an electric range of 239 miles. Not groundbreaking numbers, but for buyers who want the iconic G-Wagon experience with zero tailpipe emissions, this is it.
With federal lease credits ending soon, Mercedes appears to be betting that drivers looking for a last chance at big EV savings will jump now rather than later.
Click here to find a local dealer that may have the 2025 Mercedes-Benz G 580 with EQ Technology in stock. –trusted affiliate
Thanks to CarsDirect for digging up this dealer offer.
Read more: From $129 a month: 5 of the best EV lease deals in August
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The Honda Prologue is a surprise hit. It was the second-best-selling electric SUV behind the Tesla Model Y in the second half of 2024. Now, used models are in high demand.
Honda Prologue leads used EV sales growth in July
After it delivered the first customer models last March, the Honda Prologue quickly became one of the most popular EVs in the US.
Throughout the second half of the year, Honda sold an average of over 5,000 Prologues every month. In November, it was the third best-selling EV, trailing only the Tesla Model Y and Model 3.
Honda’s electric SUV continues to be a top seller this year. Last month, it outsold the Ford Mustang Mach-E and Hyundai IONIQ 5. Since delivering the first Prologue model last March, Honda has now sold 52,500 units in the US.
According to Cox Automotive’s latest EV Market Monitor report, used Honda Prologue EVs are selling faster than expected.
Used EV sales rose sharply in July to 36,670, up 23.2% from June and 40% compared to last year. Honda had the biggest increase in used EV sales, more than doubling (+103%) month-over-month. Hyundai (+61.3%) and Rivian (60.5%) ranked second and third.
Tesla led used EV sales last month, selling 15,903 vehicles, up 18% year-over-year. GM’s Chevy (3,499 units, +28.6%), Ford (1,967 units, +25.7%), Mercedes-Benz (1,724 units, -12.3%), and Nissan (1,659 units, +19.9%) rounded out the top five.
Although its market share slipped to 43.4% from 45.2%, Tesla remained the leader by a wide margin. Other luxury brands, including BMW and Audi, reported higher used EV sales in July, with increases of 43.87% and 38%, respectively.
According to the report, used EV listing prices reached $35,263 last month, a 1.9% decrease from June. With a price gap of just $1,266, a record low, used electric vehicle prices are closing in on ICE vehicles.
New EV sales also picked up in July. With over 130,000 EVs sold, up 26% from June, the electric vehicle market share reached 9.1%, the second-highest to date.
Ahead of the $7,500 federal tax credit deadline, set to expire at the end of September, 11 brands posted their best EV sales of the year. The top five included Tesla, Chevy, Hyundai, Ford, and Honda. Volkswagen surged to sixth after electric vehicle sales surged 454% last month.
The Honda Prologue starts at $47,400, but with the credit, you can snag one for under $40,000 right now. Honda is also offering monthly leases as low as $159 in California and other ZEV states. In other regions, it’s still listed for as low as $229 per month.
| 2025 Honda Prologue trim | Starting Price* | Starting Price After Tax Credit* |
EPA Range (miles) |
| EX (FWD) | $47,400 | $39,900 | 308 |
| EX (AWD) | $50,400 | $42,900 | 294 |
| Touring (FWD) | $51.700 | $44,200 | 308 |
| Touring (AWD) | $54,700 | $47,200 | 294 |
| Elite (AWD) | $57,900 | $50,400 | 283 |
Even Honda’s luxury brand, Acura, is selling more electric vehicles than expected. Through the first half of the year, the Acura ZDX outsold the Cadillac Lyriq, and it’s based on the same GM Ultium platform.
Sales are expected to continue picking up ahead of the deadline. As Cox Automotive highlighted, “July’s performance sets a strong precedent, and as policy support winds down, the market’s ability to respond to real-time demand and brand-level dynamics will be critical in shaping the next phase of growth.”
Ready to take advantage of the savings while they are still here? We’re here to help. You can use our link to find deals on the Honda Prologue in your area (trusted affiliate link).
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The waste management experts at Republic Services are committed to cleaning up the Chicagoland area — and now, that includes the air Chicagoans breathe, thanks to the deployment of new Mack LR Electric garbage trucks in the heart of America’s Second City.
Republic Services executives and partners from local utility ComEd gathered yesterday, 14AUG, to celebrate the deployment of Chicago’s first electric refuse fleet, featuring two new Mack LR Electric garbage trucks paid for, in part, by ComEd’s commercial EV rebate program.
“The Mack LR Electric is purpose-built for refuse applications, delivering zero local emissions while maintaining the durability and performance Mack trucks are known for,” reads the official Mack press release. “The electric powertrain provides quieter operation for early morning routes and helps fleet operators meet sustainability goals while supporting cleaner air quality in urban communities. With its low cab-forward design and tight turning radius, the LR Electric maintains the maneuverability essential for residential and commercial waste collection routes.”
The big Class 8 Mack Trucks are powered by a pair of electric motors putting 400 combined kW (about 536 hp) through a 2-speed Mack Powershift transmission that offers a whopping 4,051 lb-ft of peak torque output. That’s over 40% more power than the first generation Mack LR Electric released in 2019, and this iteration can charge the 376 kWh Samsung-sourced batteries fully in under two hours at 150 kW.
Real money, real results
While Washington continues to threaten America’s economic security and position as a global technology leader by toying with the idea of killing the $7,500 Federal EV tax credit, the ENERGY STAR program, and other energy efficiency incentives, the private energy sector is stepping up with massive investments in battery storage, charging infrastructure, and commercial EV rebates – and Chicago is leading that charge (pun very much intended), with EV adoption outpacing the rest of the nation by 4:1 in Q1.
“ComEd is proud to support Republic Services in advancing zero emissions transportation for Chicago’s neighborhoods,” explains Melissa Washington, our senior vice president of customer operations and strategic initiatives. “As more customers take advantage of our EV rebate programs, we are helping empower customers to realize the air quality and energy savings benefits of EVs, and moving our communities closer to their goals for a more sustainable future.”
The new HD electric vehicles will be powered up nightly by equally new 150 kW DC fast charging stations from BP pulse, which are installed at Republic’s vehicle yard in the Little Village neighborhood. Part of the ComEd rebate money awarded to the company helped fund the make-ready infrastructure portion (effectively from the transformer to the stub) of that project, as well as at least one Ford F-150 Lightning pickup.
And, if these trucks look familiar, it might be because Republic Services also handles refuse collection for the City of Madison, Wisconsin, and added two Class 8 electric trucks to their garbage fleet last year in the form of a pair of similar Mack Electric LR HDEVs.
Electrek’s Take
Look, you know me. There is absolutely ZERO chance that I’ll be able to remain objective about anything that’s putting down more than four thousand lb-ft of torque. Make that thing quieter, cleaner, and generally better for me and my community, and there’s even less of a chance of me saying anything critical about it.
Here’s hoping more cities go electric rather sooner than later.
SOURCES | IMAGES: Mack Trucks, Republic Services, via LinkedIn.
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