You would have been forgiven for doing a double take at your calendar in mid-March 2023 – the whole world was giving off big 2008 vibes. The collapse of Silicon Valley Bank sent some real ripples through the financial world, already gripped by the ongoing cost of living crisis – exacerbating the shaky trust people have in traditional financial institutions.

As the fallout of the collapse continues, questions are being asked about those that were able to pull their money out of the bank before the chaos, why it seems that normal people are often left with the raw end of the deal, and what this means for the wider relationship that people have with banks.

As the cost of living crises worsens, money is becoming a scarce commodity – after years of easy borrowing, manageable debt levels, and a celebration of consumption, attitudes are shifting. At the same time, trust in traditional banks that hold and lend money is dwindling. In fact, 48% of people in the UK say that they don't trust their banks to get them through a recession, and just 54% of people in the US say that they have trust in the financial services sector.

As such, people are turning to alternative sources of authority for financial advice and money management; platforms like Binance and Robinhood are seeing record engagement from people looking to hedge their bets on cryptocurrencies and digital collectables. This interest in non-traditional savings and investment is skewed towards younger generations, with research suggesting that 30% of Gen Zers and 25% of Gen Yers have invested in alternative assets, compared to just 10% of Americans overall.

At the same time, once fringe alternative currencies are being subsumed into the financial mainstream. Whether it’s Mastercard launching a crypto credit card in Brazil or Italy imposing regulations on digital currencies that were supposed to be decentralized, the world of alternative currencies and investment is slowly becoming regulated – but that doesn’t mean that people are going back to trusting big banks.

Instead, there’s an opportunity for financial institutions to build back trust through support and education. The cost of living crisis is leaving many households spinning out, and platforms that can help consumers save efficiently while aiding with their monetary education have the potential to reinforce that sense of consumer trust and confidence.

While some platforms like Q.AI and Scout focus on educating younger generations, the changing nature and unpredictability of the economic climate are leaving a lot of people in need of financial re-education. Therefore, start-ups like Goalsetter – which focuses on familial financial literacy – have the potential to repair relationships and make finances accessible and easy to understand.

As the dust settles on the collapse of Silicon Valley Bank, people around the world will be looking at the financial sector with increased scepticism. Companies, brands, and financial institutions that can provide education, security, and support during tough times will be the ones best placed to rebuild trust with their customers – and attract new ones in times of uncertainty.