SXSW 2023 recap: banking turmoil steals the spotlight

Tim Flannery
Tim Flannery
March 24, 2023

South by Southwest showcases the most important innovations in technology, film, culture, and music. After being canceled in 2020 and online-only in 2021, this year saw over 200,000 people descend on Austin, TX.

SVB steals the spotlight

The biggest topic at the conference wasn’t any panel or presentation. It was Silicon Valley Bank. 

The SXSW party started just as SVB, the now-defunct financial institution that banked most of the tech industry, entered FDIC receivership. Many attendees spent their first hours in Austin glued to their computers and phones. A panel featuring former Thiel fellow and VC Laura Deming was punctuated by her checking her phone because she was “just waiting on a wire to get [her fund’s] money out,” TechCrunch reported

SVB was one of the most attractive places for venture firms and tech companies to bank because of their tech-friendly financial product offerings. The bank spent decades providing debt and lines of credit to everyone in the valley when other bulge bracket banks refused to underwrite similar offerings. 

SVB’s uncertain future–along with Signature Bank’s collapse and Credit Suisse’s firesale to UBS–is pushing companies and investment firms alike to reevaluate their treasury practices and banking partners. 

Even while in Austin, fund managers and startups rushed to build new banking relationships at the US Big Four (JPMorgan Chase, Bank of America, Wells Fargo, and CitiBank) but found account opening challenging. While banking operations teams sifted through thousands of new account documents, know-your-business and anti-money laundering requirements held up the process.

As a KYC/AML provider, we know how difficult it is to collect the correct documents, structure the information, and minimize back-and-forth with the investor or client. We launched a full product to fix that for investing into private funds.

AI takes center stage

In a major shift from last year, Passthrough delegates–Colleen and Ariana from our partnerships team–noted the absence of NFTs and crypto activity. 

In 2022, some 40 panels and presentations were focused on non-fungible tokens. The FTX/Sam Bankman-Fried scandal, recent collapse of crypto-friendly Signature Bank, and class action lawsuit against the Bored Ape Yacht Club creators contributed to limited interest in tokens at this year’s conference. A search of the 2023 schedule showed half as many NFT-related events as last year.

Instead, artificial intelligence dominated panels, including a panel led by the author entitled “Can Robots Create Life-Changing Songs?” and one called “Welcome To The Machine: Art In The Age of A.I.” with Grammy-nominated singer-songwriter Jessy Wilson and musician Dan Navarro. 

Passthrough’s mark on SXSW

Tuesday night saw Colleen and Ariana host clients and partners at a lively cocktail party, alongside Aumni, Vector AIS, Strut Consulting, and First Republic Bank. The 100+ attendees who gathered at the Firehouse Lounge in Downtown Austin included leaders from Goldman Sachs, Blackrock, Serent Capital, Manhattan Venture Partners, and Haveli Investments.

Finally, we exchanged ideas on the future of fundraising tech at Foley & Lardner LLP’s cocktail hour, hosted on the 30th floor rooftop of its Austin office, and King & Spalding’s luncheon. From conversations with lawyers and fund formation professionals, fund managers, investors, and lawyers are demanding an automated investor onboarding experience.

Interested in a better way to screen investors? Talk to us about our KYC/AML software today.

Get a Demo

Continue Reading