Diversification for resilience: Why successful CFOs don't bet on one bank
When Silicon Valley Bank (SVB) collapsed in 2023, it sent shockwaves across the financial and startup worlds. Thousands of companies faced frozen accounts, delayed payrolls, and the stark realisation that relying on a single financial institution is not safe.
It was a wake-up call for many growing businesses.
Relying on a single institution creates what QED Investors call "single-thread risk," which is “one point of failure” that can freeze your operations.
"Back in 2023, many tech startups were left with an unpleasant scar," Konstantin Dzhengozov, CFO at Payhawk, says. "But the funny thing about history is that it often repeats itself. Hopefully, everyone now sees diversification and contingency planning as a survival tool."
But diversification isn't just a defensive move. If you do it right, it can open the door to:
- Better rates and terms: You can negotiate from a place of strength when not tied to one provider
- Flexible funding options: Different tools serve different needs. Variety can be a winning combination, whether it's short-term liquidity or long-term capital.
- Operational continuity: If one provider falters, another keeps you running.
Modern finance teams are creating what's often called a distributed resilience strategy, including three critical things: 1. Multiple credit lines from fintech and traditional lenders, 2. Dual banking relationships across different jurisdictions, and 3. Spend management platforms like ours that centralise control, visibility, and compliance.
"We live in a world where banks are no longer the only option," Konstantin explains. "Companies should aim to cap exposure to any single solution at 30-40%."
The CFO reality check: Where traditional banking falls short
In many cases, traditional banking is the first stop for companies to hold funds, so finance leaders default to using their corporate cards for the sake of simplicity. But that “simple” approach often does the opposite and instead creates gaps in control, limits visibility, and makes it harder to manage spend effectively.
To properly manage finance, including cash flow and expenses, you need real-time visibility, spend control (and policy compliance), and the ability to scale without adding more tools or heaps more people. And that’s where fintech comes in.
Fintech platforms are giving finance leaders an easy way to control spend, automate workflows, and unify financial operations like reconciliation, without the baggage of multiple clunky or disconnected legacy systems. It’s not about rivalry. It’s about scalability and having the flexibility to lead with data instead of reacting to chaos.
As Uchenna, Finance Manager at MDM Props Ltd, says of her team’s journey from banks to fintechs:
We used credit card systems, from Barclays and AMEX. With Barclays, you’d get a monthly statement, and had to pay it in seven days. But sometimes, when we’d log into the system, the statement wasn’t available. We didn’t know what we were paying, which was bad for cash flow. AMEX was much better, but we struggled with acceptability… We wanted something that would show spend in real-time and connect to our accounting system, Sage.
MDM Props’ story mirrors what thousands of finance teams across industries are experiencing. While banks still offer important basics, the best fintech platforms deliver true operational clarity.
The real difference? Seamless integration, automated approvals, instant card issuance, real-time data transfer, and easy-to-update advanced controls that support how your company actually works.
And this level of control isn’t just theoretical. With advanced fintech solutions like ours, finance leaders can translate policy into real-world guardrails. You can define who can spend, where, when, on what, and how much — all in real time. That means setting dynamic spend limits per transaction or time period, restricting merchant categories like clothing or entertainment, and enforcing vendor-specific rules to ensure policy and supplier agreements.
Real visibility, real control — built for cost-effective scaling
Visibility is where banks often drop the ball. Yes, banks show you what’s happened in the past. But really good fintech platforms (like ours) will show you what’s happening right now (so you can shape what happens next with the best, most up-to-date insights).
Uchenna shares the top six benefits of moving MDM Props to our solution from a traditional bank:
- Real-time notifications when a card is used
- No more missing receipts = approx 2 million in VAT reclaims per year
- Non-compliant spend is flagged automatically
- Opportunity to freeze cards if receipts aren’t submitted on time
- Complete visibility over spend
- No more end-of-month surprises
It’s no different for multi-entity businesses. With dozens of entities operating across different currencies, finance teams need a single platform that centralises data, streamlines approvals, and supports local compliance, without adding complexity. As companies grow into new markets, their finance tools must scale with them seamlessly, not create friction or demand workarounds. They need smarter, more cost-effective ways to manage spend at every level, including across entities, supplier networks, and customer bases.
Consider this short use case:
Alex is the Group CFO of a fast-growing mid-market Software Company. His teams are distributed across Europe, and his budgets must be managed in five different currencies.
Last month, Priya (his Head of Ops) flew to Warsaw for a supplier visit. She paid with her corporate card, booked travel, and covered a venue deposit — all in Polish Zlotych. The bank-issued card she used didn’t charge visibly high fees… until the FX bill came in. By the time finance reconciled it, the hidden conversion markups had eaten into the budget.
Worse, the approval flow was still manual. Priya’s expenses had to be submitted via email, routed to her manager, then forwarded to Alex for final sign-off. It took nine days to close.
Now, imagine a different setup.
Priya uses a Payhawk-issued Visa corporate card with built-in multi-currency support. There are no inflated FX rates. Every transaction is logged instantly. She can capture her receipts via OCR and code the spend in seconds. Her approval flow is automated in our platform and mapped exactly to her team structure. Any anomalies are flagged by AI, and if she runs out of funds, she can request a top-up (which can even be auto-approved based on the amount). Lost her card? She can freeze it instantly via the app.
Back to Alex, and he didn’t just get improved visibility — he clawed back days of admin time and avoided costly currency conversion fees.
As Iliyana Krushkova, CFO at ScaleFocus, says, “It’s super beneficial to use Payhawk instead of using personal cards, as the exchange rates are horrific! (We can save up to six times the exchange rate fees).”
David Watson, Group Financial Controller at State of Play Hospitality, shares Iliyana’s view on savings, but this time on the platform fees:
That’s what really sold Payhawk to us. We pay per platform rather than per transaction, which is vital to us as a hospitality business. When we first started using Payhawk, we were a group with six component entities, but as we expand, it only increases our need to pay per platform!
See how Essentia Analytics cut their month-end close in half, took full control over expenses, achieved cash flow transparency, and boosted agility after switching to Payhawk: Watch the short video below.
