Chaos, panic and the golden rule


“You have our money, but our employees were not paid. This is a nightmare!” tweeted a direct deposit customer of Patriot Software after the collapse of the Silicon Valley Bank.

And the used to be a nightmare. Not only for our customers, but also for our 185 remote employees. We were just so confused and angry.

We now know the story of the sudden collapse of SVB on Friday, March 10, 2023. Touted as one of the best banks in America less than a month earlier, SVB collapsed in less than 48 hours and was taken over by the FDIC in the middle of the working day.

But you may not have read about the enormous amount of work that went into navigating the second largest bank failure in US history.

I am the CEO of one payroll software company that Silicon Valley Bank used to process our customers’ direct deposits. No juicy breaking news, just a rough behind-the-scenes account of what Patriot Software’s remote team, our customers and their employees have been through.


Friday March 10

As a payroll company, you never want to have a late payroll. Imagine waking up to warnings that no one has been paid… scary, right? That’s exactly what happened on Friday.

1. Tell me this isn’t real

“Our employees reported that their direct deposits were not yet in their bank accounts at 7:00 AM (ET). We immediately began communicating with our SVB contact to find out what the heist was,” said Jackie White, Head of Risk and Treasury at Patriot Software.

Initially, our SVB contact person told us that employees were not paid because the system was overwhelmed. Patriot product manager Mike Streb added some much-needed comic relief that morning when he joked, “I’ve been blown away since 2012, but I still get things done.”

2. The panic sets in

As we now know, the SVB system was not confused. It crumbled at breakneck speed. We received a one line email from our SVB contact point at 11:56 with a link to the announcement that regulators had closed down SVB. Yes, when and how did we find out that not only did SVB have some delays in their processes… but that regulators had closed the bank. An e-mail. No calls. No explanation for our thousands of customers. That’s it, one email. Incredible!

“We were in a Zoom conversation when we saw the email come in. On a split screen, we all read the FDIC memo together. After a minute of silence, it dawned on me that one of the worst-case scenarios had happened: the bank was closing,” said Patriot Chief Product Officer Kyle Dreger. “I think we all took a moment to let that new reality sink in, but it didn’t take long for you to feel a clear unspoken understanding that even though we had a million questions, we would find a way to get employees paid.”

At that point, word had spread about the collapse of the SVB – customers flooded us with phone calls, emails and chats. We’re bracing for impact – 8,100 (out of 57,000) Patriot companies nationwide had done payroll by March 10 with direct deposit. They were understandably upset about the collapse of the SVB and wanted to know where their money was.

We had no immediate answers. This was not a system problem that we could plan for. This was a systemic banking issue that began to reverberate throughout the US financial industry. How many banks are closed in the middle of the day and taken over by the FDIC because of a bank run?

3. Shake it off and get to work

To put it politely, I was angry, really angry. We had been let down by our banking partners at SVB, which in turn led to Patriot disappointing thousands of customers who rely on us to ensure their employees are paid on time.

There was no time to point the finger and complain. What good would that do at a time like this anyway?

There was work to be done – a lot of work. We went at a rapid pace. We had to:

  • Come up with a plan
  • Tell all Patriot employees what was going on
  • Communicate with our customers
  • Talk to outside specialists
  • Replace SVB with new banking partners – immediately – with two (yes, two!) of the country’s largest financial institutions

To coordinate all internal operations, Kyle Dreger has set up and run a continuous war room on Zoom with Patriot’s Executive Team and key executives.

Every Patriot employee had access to the war room, even Mike Wheeler, Patriot’s president and chief legal officer, who was aboard a cruise ship to the Bahamas for his brother’s wedding and armed with limited duty.

“How do we access over $100 million in dollars within SVB and get money for people who depend on their paychecks as quickly as humanly possible?” Wheeler asked, trying to perform legal and financial triage from his iPhone. “Call the lawyers, accountants, insurance, everyone; work together to get ahead of the FDIC regulators – now!

4. Communication is key

We prioritized finding real-time solutions and over-communicating what we knew to customers across the country.

We communicated with more than 2,000 entrepreneurs via telephone, e-mail and online chat. To reach tens of thousands of customers, we have a communication pagesent emails, wrote press releases and posted on social media.

“We were so swamped that our phone lines were full, giving customers the wrong impression that we had turned off our phones. To keep up, we’ve enlisted colleagues across the company to call to help take calls from hectic customers,” said Julie Solon, Customer Care Manager. “The entire team remained calm, cool and collected and worked very hard to keep up with the constant updates we wanted to pass on to our customers. I am very proud of the team for all their efforts to keep customers informed while working remotely. We had to take a few mental breaks during the event.”

Saturday March 11 and Sunday March 12

I went into the weekend with a pit in my stomach. As a business owner I can tell you: the number one rule of owning a business is always pay your employees. Not only I could not have done that on Friday, but due to the bankruptcy of the SVB, the 46,500 employees of our customers could not be paid.

We knew our clients’ money was protected. Yet we had no idea when we would be able to access those funds or deposit them into employees’ bank accounts without immediate outside intervention.

1. Basic Marketing

We did everything we could to get results over the weekend when all banks were closed. Our goal was simple: to encourage the government to release payroll immediately when the banks reopened on Monday morning.

To do this, Wheeler had made contact with current and former Silicon Valley Bank bankers, who jointly proposed launching a basic marketing campaign.

Late Saturday night I wrote one Open letter to our governmentcalling on our government and legislators to intervene. A small group of talented writers have spawned a Twitter thread to expand our reach.

2. National attention

We launched our campaign first on Sunday morning, which started gaining popularity throughout the day. In the end, it hit the senators and really helped show the heart behind helping the everyday working people who had no say in the demise of the SVB.

U.S. Senator Sherrod Brown, the chairman of Senate Banking, called me personally and thanked me for my open letter to our government. He said he had discussed our letter with Federal Reserve Secretary Janet Yellen, FDIC Chair Martin Gruenberg, Federal Reserve Chair Jerome Powell, and other leaders. He thanked Patriot for highlighting how many thousands of American small businesses were affected by the abrupt closure of Silicon Valley Bank. Well done, Senator Brown!

By late Sunday, the Treasury, Federal Reserve and FDIC had taken action to assure depositors that their money would be fully insured and available by Monday morning.

This was huge! But we weren’t done yet.

Monday March 13

On Monday we were armed with answers and prepared for a busy day of customer communication.

Still, we had to temper expectations: while savers would have access to their money, we had to wait until SVB’s direct deposit systems were functional again. That only happened on Tuesday.

Tuesday March 14

The time had come to get 46,000+ employees paid. With SVB’s systems back up and running, they were finally able to process Friday’s direct deposits.

When employers called us to tell us that their employees across the country had received their direct deposit, there was much joy and relief at Patriot.

“Ultimately, I don’t think I took a single deep breath until Tuesday, when we saw the paychecks start pouring into the pockets,” Kyle Dreger said.

The Golden Rule leads the way to success

I owe our success to one thing:The Golden Rulea core principle of the Patriot brand that says we treat others the way we want to be treated and genuinely care about our customers.

Sure, we were exhausted. But we put our customers and their employees first. Dreger, who balanced his 24-hour work with being a father to three young children under the age of five, including a newborn daughter, shared: sleep. And you just did, you know? Because somewhere there was another parent with children who didn’t get their salary. My wife and I were lucky; not getting paid was stressful, but we had food in the fridge. I know that’s not the case for a lot of people, and while the physical stamina wasn’t always there, the motivation was.”

And we were thrilled when reassured employers across the country came out in droves to praise our customer-centric mindset.

A Facebook comment read: ‘All I want to say is that Patriot rocks! This whole thing could have been so much worse; your timely response, frequent updates and handling of it all have been amazing! Thank you!!! I hope your staff gets a well deserved break soon, I’m sure they deserve it!”