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February 9, 2023
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The collapse of Silicon Valley Bank (SVB) has sent shockwaves through the financial and tech industries, serving as a stark reminder of how quickly a banking crisis can occur. This incident highlights the need for individuals, businesses, and governments to mitigate banking risks and prepare to respond quickly should a crisis occur.
In this blog post, we will discuss Read on to learn how you can prepare your business to avoid similar situations.
It's easy to get caught up in the numbers and figures (and some finger pointing) when discussing the Silicon Valley Bank crisis, but it's important to remember that this crisis involves real people who experienced financial instability, lost their jobs, or saw their investments dwindle as a result of the crisis.
It’s easy to see in hindsight where things went wrong, but the most productive way to respond to a crisis like this one is to use it as a learning tool. How can you use the lessons of the SVB collapse to ensure your company — and the people who depend on it — don’t get caught off guard by a similar situation in the future?
The first step is to actively work toward disaster-proofing your business. Below are some actions you can take immediately to mitigate risks with your banking practices.
It's important for businesses to establish robust policies and procedures to identify, measure, monitor, and control risks associated with their banking operations. This includes having strong internal controls to manage cash flows; minimizing the risk of fraud; and implementing risk management frameworks to identify potential risks and take steps to mitigate them. Businesses should regularly review and update their systems to ensure they remain effective and relevant.
Conducting due diligence on customers, counterparties (the other entity involved in a financial transaction), and vendors is a critical step in mitigating risks for businesses. This process involves verifying the identity and reputation of these parties before engaging in any business transactions with them. By doing so, you can avoid potential reputational damage, legal penalties, and financial losses resulting from fraudulent activities, money laundering, or other criminal behavior.
Cybersecurity is critical for businesses to protect against cyber threats, including hacking, malware, phishing, and ransomware attacks. Businesses should implement robust cybersecurity measures to protect their financial and customer data and regularly review and update their security systems to stay ahead of emerging threats.
Businesses must ensure they comply with all relevant laws and regulations, including anti-money laundering, counter-terrorism financing, and data privacy laws. This includes staying informed of any changes or developments in the regulatory environment and implementing measures to ensure compliance.
Businesses should promote a culture of ethics and accountability across their organization. This includes setting clear expectations and standards for ethical behavior and taking appropriate action to address any unethical or illegal activity.
Strike Graph is a comprehensive security and compliance platform that helps businesses ensure their security programs are effective and meet all regulatory requirements. That, of course, includes mitigating banking risks.
Use Strike Graph to identify compliance gaps and risks; create a governance, risk, and compliance plan; and implement controls to address areas of risk, including financial, reputational, security, and fraud.
Don’t get caught off guard by the next banking crisis. There’s no better time to get out in front and mitigate any potential banking risks. When you’re ready, Strike Graph is here to help.
