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.
WATCH: Silvergate Capital shares plummet after announcing plans to liquidate its crypto bank
A judge has officially approved a settlement in a case brought by Tesla shareholders against board members who will now have to return stock, cash, and give up on stock options worth a total of nearly $1 billion.
Let me start this article with a quote from Tesla CEO Elon Musk:
Tesla will never settle a case where we’re in the right, and never contest a case where we’re in the wrong.
Today, Chancellor Kathaleen McCormick approved a settlement agreement between Tesla and all its board members from 2017 to 2020 and the Police and Fire Retirement System of the City of Detroit on behalf of Tesla shareholders over what the shareholders believed to be excessive compensation.
The agreement was first reported in July 2023, but it is only now being officially approved and we learn a few more details.
Shareholders believed that members of Tesla’s board were compensating themselves excessively with hundreds of millions of dollars between 2017 and 2020 when the average compensation of a board member of a S&P500 company is just north of $300,000.
Under the settlement, the board members agree to return to Tesla $277 million in cash, $459 million in stock options and to forgo $184 million worth of stock options awarded for 2021-2023.
That adds up to nearly $1 billion.
The board members include Kimbal Musk, Elon’s brother, Brad Buss, Ira Ehrenpreis, Antonio Gracias, Stephen Jurvetson, all close friends of Elon Musk and people who have financial dealings with Musk outside of Tesla, Linda Johnson Rice, Kathleen Wilson-Thompson, Hiromichi Mizuno and Larry Ellison, the co-founder of Oracle Corp and also a close friend of Musk.
As part of the settlement, Tesla or the board does not admit to any wrongdoing.
Musk didn’t take compensation as part of the board, but he is embroiled in a similar case over his own $55 billion CEO compensation package, which was rescinded by the same judge after she found that it wasn’t negotiated or presented to shareholders in good faith.
The board members who received this “excessive compensation” also happened to be the one who “negotiated” Musk’s CEO compensation package.
The case is heading to the Delaware Supreme Court, as reported earlier today.
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Environment
Nissan’s Ariya electric SUV takes on the extreme weather in its new test chamber [Video]
![Nissan's Ariya electric SUV takes on the extreme weather in its new test chamber [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2023/07/Nissan-first-Tesla-NACS-Japan.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
Despite how cold it may feel outside, Nissan’s electric SUV has likely been through colder. Nissan is proving its Ariya SUV can handle the extreme weather at its unique new test chamber at its tech center near Detroit. With temperatures ranging from -40 to 176 °F, the Ariya is being pushed to see what it’s made of.
Nissan launched the Ariya, its first electric SUV, in the US in late 2022. Over 13,400 Ariya models were sold in the US in its first sales year, with another nearly 20,000 handed over in 2024.
A few weeks ago, Nissan introduced the 2025 Ariya, starting at just $39,770. It has two battery options, 66 or 91 kWh, good for 216 and 289 miles range. That’s for the FWD models.
You can opt for Nissan’s e-4ORCE AWD dual-motor system for “thrilling acceleration” with up to 389 hp and 442 lb-ft of torque. However, with the added power, you sacrifice some range. The AWD Ariya gets up to 272 miles range.
With many parts of the country seeing frigid temperatures, Nissan says its “Ariya is very well equipped” to combat freezing weather.
The electric SUV was already the first vehicle (EV or gas-powered) to drive from the North to the South Pole in 2023. Now, it’s being put through the paces at Nissan’s tech center outside of Detroit.
It’s currently around 23 °F in Detroit, with a low of 11 °F, but Nissan says it’s even colder in its unique new test chamber. The chamber is located at the Nissan Technical Center North America campus, just outside Detroit.
Nissan Ariya handles cold weather tests in new chamber
“Our chambers are capable of temperatures ranging from -40 degrees Fahrenheit to 176 degrees Fahrenheit,” Jeff Tessmer, senior manager of Zero Emission Vehicles at Nissan’s tech center, explained.
Nissan tests the Ariya in a test chamber with “far more extreme” temperatures than the typical driver will see. Tessmer said, “We want to test the worst-case scenario so that our customers will still get the same performance in a wide variety of weather conditions.”
One of the biggest goals is to prove the electric SUV’s battery can maintain charge levels even in extreme weather.
Nissan puts it through “cold soak” tests to ensure performance. During a 24-hour cold soak, the Ariya was parked in -4 °F weather with a 17% battery charge. It also wasn’t plugged in or using its battery heater. After the team returned the next day, the electric SUV still had a 17% charge and started up immediately.
The Ariya is equipped with a battery heater that drivers can turn on ahead of time to ensure optimal performance. On hot days, it includes a liquid-cooled system to regulate battery temperatures.
Drivers can also use the MYNISSAN app to pre-warm the cabin, check the interior temperature, and schedule charging times. Ansu Jammeh, an engineer on Nissan’s Zero Emissions Engineering team, said the best time to use the heating feature is “when the vehicle is plugged in so that it uses power from the grid instead of the vehicle.”
| 2025 Nissan Ariya trim | Battery (kWh) |
Starting Prices* (MSRP) | Range (miles) |
| Engage FWD | 66 | $39,770 | 216 |
| Engage e-4ORCE | 66 | $43,770 | 205 |
| Evolve + FWD | 91 | $44,370 | 289 |
| Engage + e-4ORCE | 91 | $45,370 | 272 |
| Evolve + e-4ORCE | 91 | $48,370 | 272 |
| Platinum + e-4ORCE | 91 | $54,370 | 267 |
Nissan added a new wireless charging pad across all 2025 Ariya models. The inside features Nissan’s Advanced Drive-Assist setup with dual 12.3″ infotainment and driver display screens formed in a “wave-like” shape.
Other standard features of the 2025 model include wireless Apple CarPlay and Android Auto support, a Head-up display, and a Virtual Personal Assistant. It also includes Nissan’s ProPilot Assist for assisted driving.
Are you ready to check out Nissan’s electric SUV for yourself? We can help you get started. You can use our link to find Nissan Ariya models at the best price in your area today.
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Florida’s Rice Creek Solar Energy Center is now online, delivering nearly 75 megawatts (MW) of clean electricity to 12 cities across the state. The solar farm is part of the Florida Municipal Solar Project, one of the largest municipal solar initiatives in the US.
Located in Putnam County, near Palatka, the Rice Creek site is covered with 213,000 solar panels that generate enough power for around 14,000 homes. This marks the third solar site in the Florida Municipal Solar Project, with more on the way.
Twelve utilities are tapping into the clean energy from Rice Creek, including Beaches Energy Services (Jacksonville Beach), Fort Pierce Utilities Authority, Homestead, Keys Energy Services in Key West, Kissimmee Utility Authority, Lake Worth Beach, Mount Dora, New Smyrna Beach Utilities, Newberry, Ocala, Town of Havana, and Winter Park. This is the first solar power project for Havana, New Smyrna Beach, and Newberry.
Jacob Williams, the general manager of the Florida Municipal Power Agency, explained, “By working together, our members and their communities benefit from additional solar-powered energy that’s both cost-effective and carbon-free.”
The FMPA, based in Orlando, coordinates the project, while the 12 municipal utilities – who are also FMPA’s member-owners – purchase the power. Miami-based Origis Energy is the builder, owner, and operator of Rice Creek. According to Origis Energy’s Josh Teigiser, “We are honored to support this FMPA work. Long-term agreements for solar generation, including for Rice Creek Solar, provide a stable rate base contributing to lower and more predictable customers’ bills.”
Construction is already underway on a fourth Florida solar farm, Whistling Duck Solar, in Levy County. The Florida Municipal Solar Project is expected to grow to seven sites in the next few years and will generate a total of around 525 MW of clean energy.
Read more: Ohio’s largest solar farm just came online
To limit power outages and make your home more resilient, consider going solar with a battery storage system. In order to find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
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