Is your Organization Ready for the Next Crisis?
David Preston weighs in on the collapse of Silicon Valley Bank Collapse in the Boston Globe
New Harbor founder and President David Preston viewed the bank failure in California through the lens of the R.I. credit union crisis in a piece in the Boston Globe recently. A strategic advisor to Gov. Bruce Sundlun during the 1991 banking collapse in Rhode Island, Preston highlighted the importance of transparency, a nimble social media strategy and customer trust in today’s world of instant communication.
“SVB was reasonably sound, and certainly on more solid ground than the troubled Rhode Island credit unions of 1990. SVB’s “problem” can be boiled down to two factors. First, they were careless about trading out low-earning assets for higher-earning ones. Secondly, and perhaps more important, their communication about the transactions was easily misconstrued by people who lacked the ability to cut through the banking jargon SVB served up to their customers. It wasn’t long before today’s instant communication platforms were filling the vacuum left by SVB’s inadequate communications – and in 2023, that only took minutes.
Last Friday’s events are only a preview of a new, dangerous moment for a banking system built on trust. To avoid becoming the next “defunct” bank, institutions should move quickly to inform their customers, and be prepared to use social media effectively when a crisis hits.”
The dangers posed by social media and instant communications are not limited to banks, however. Organizations must prepare to meet unforeseen challenges, so when a crisis hits they’re ready to effectively respond – and save their business. Read the full article here.
