Key Takeaways:

  • Despite industry calls for companies to diversify risk exposure after Silicon Valley Bank's collapse, long-term bank deposit safety remains a top concern for financial executives. According to a December survey of 265 CFOs and finance leaders by Ampersand, a financial services firm in Waukesha, Wisconsin, 74% of respondents ranked deposit safety among their top three priorities, higher than inflation (70%) and cyber risk (65%).
  • The survey shows that while the wave of regional bank failures in recent years has raised awareness among companies about filling risk gaps, vulnerabilities persist. Three-quarters of respondents said they were aware of recent U.S. bank failures, but CFOs on average indicated that if their primary bank failed and deposits were inaccessible, their businesses could only sustain operations for less than three months.
  • "Our survey reveals a disconnect between companies' perception of cash safety and their actual level of protection," said Kelly Brown, CEO of Ampersand, in an email statement to CFO Dive. "CFOs must balance multiple responsibilities such as operations, payroll, and growth, while also safeguarding large cash balances. Building true cash confidence means understanding insurance limits, diversifying risk, and treating deposit accessibility as a core business priority rather than an afterthought."

Deep Dive:

The 2023 collapse of Silicon Valley Bank, based in Santa Clara, California, caught financial leaders off guard, with many having to improvise on how to pay daily payroll and supplier costs. In the long term, many companies also sought to diversify their banking across different institutions to gain protection in the event of a single bank failure.

The survey did find some progress. For example, among companies with balances exceeding $250,000, a "significant portion" had already diversified accounts or were actively considering other strategies to maximize Federal Deposit Insurance Corporation (FDIC) coverage. Many respondents believed mid-sized financial institutions were "best positioned to offer attractive rates," with more than half (54%) offering rates better than large national banks.

Nevertheless, the vast majority (86%) of surveyed companies still held balances exceeding the FDIC's standard deposit insurance limit of $250,000.

"These findings reveal a clear opportunity to enhance cash confidence through education and proactive measures," the report, released Monday, stated. "Given that so many companies hold large uninsured balances and have limited operational buffers in bank failure scenarios, understanding FDIC limits, diversification options, and safety signals is crucial."