Bank Simple Archives

Neo-Banking is Just Getting Started

By Jim Bruene on November 12, 2014 2:42 PM | Comments

Definition: Neo-Bank
Delivering banking services without touching the funds


This morning, Celent's Stephen Greer published a post called, The Challenges of the New Neo-Bank, wherein he states:

In recent months, the neo-bank model (e.g., Simple, Moven, GoBank) has hit a few stumbling blocks that call into question the promise of the digital-only model...

Stephen lays out four scenarios for the future of neo-banks:

1. Neo-banks are acquired and assimilated into larger financial brands

2. Larger brands start their own digital "neo-bank-like" brands

3. Neo-banking fails to become a viable business model, but nevertheless influences the industry

4. Neo-banking becomes the dominant method of accessing underlying accounts held at traditional banks

My thoughts: We already see #1 and #2 happening, so the question comes down to whether we are headed long-term towards #3 or #4. Like most analysts, I'm firmly in the "it depends" camp. But I'll go out on a limb a bit. I believe we will see dozens, if not hundreds, of neo-banks launch in the next few years. Here's why:

image1. Simple's $100-million exit to BBVA 
I'm not sure how much equity the founders held at the end, but it must have been a multi-million dollar payday for five-plus years of hard work. While that's not enough to make the cover of Forbes, it's a huge win for most entrepreneurs. 

2.  Marketplace lending provides a path to profitability
The problem with the neo-bank model in an era of low deposit rates and shrinking interchange, is that those traditional income sources are not enough to pay competent developers, execs and customer service folk. With consumers loath to pay fees, most startups end up forced into the ad-supported model, which strains their credibility with customers. 

But with the growing popularity, and proven profit potential, of marketplace lending (aka P2P lending), neo-banks can partner with or build their own loan platforms to profitably put those deposits to work (sounds less "neo" and more "banking" doesn't it?). So I envision the day where neo-banks allow you to store your funds in the prepaid account for no interest, or put it to work in a lending marketplace to earn a few percentage points on the funds, with the neo-bank pocketing a bit of the spread.

3. Third-party financial watchdogs become trusted services 
Another advantage of being an independent neo-bank is that it's easier to become an unbiased watchdog over all things financial. The neo-bank can track all your accounts (Mint/Yodlee), find areas where you are overpaying or have potentially been defrauded (BillGuard), monitor your credit score (Credit Karma) and even analyze the effectiveness of your 401k (Brightscope).

Right now, it's still almost impossible for third-party startups to get to scale because customers just don't trust them. But that will slowly change as the newcomers gain brand recognition (for example, Intuit's Quicken, Quickbooks, and TurboTax brands).

4. It's much, much harder to launch a real bank
Ten years ago, we were seeing about 10 new banks launched every month. Due to all the failures brought on by the Great Recession (and I would argue, way too much deposit insurance), there has only been one new bank launched in the past three years (through end of 2013). So, if you want to get a banking business started, you have little choice but to go with a non-bank model.


Comments? Give me a shout @netbanker  

Picture credit: Article from NY Times, 20 Feb 2014 (link); sign in background from Simple HQ

Categories: Bank Simple, Strategies

Why the BBVA Simple Bank Deal is Extraordinary

By Jim Bruene on February 24, 2014 7:08 PM | Comments


I was on vacation when the Simple deal went down last week. So, today I read the 25 or so unique articles published Thursday and Friday on BBVA's $117 million acquisition of Simple. Of the bunch, only Ron Shevlin dove under the covers as to why a global financial powerhouse plunked down nine figures for a relatively small prepaid debit card portfolio. His take: the brand. 

I've been a huge Simple junkie, publishing 22 posts on the startup in the past four years. And I was delighted it chose to make its first industry appearance at Finovate in Fall 2011 (video here). But I'm even more excited about this deal, which was remarkable for several reasons: 
  • Other than ING's regulator-mandated divestiture of its U.S. unit to Capital One, this is the first major retail digital bank acquisition in the United States EVER. Yes, EVER.  Since the dawn of what we called "Internet-only" banks in Oct 1995 (note 1), not a single one has been acquired at other than a fire sale (e.g., ING Direct purchase of Netbank after it was closed by the FDIC), (see note 2). 
  • The revenue multiple was off the charts. Simple says it processed $1.7 billion last year. Assuming this was all debit card volume and they split the revenues relatively equally with their processor, The Bancorp Bank (which is Durbin-exempt, note 3), the startup generated somewhat less than $10 million in revenues last year. That's not at all bad for a bank in its first full year of business. Founder Josh Reich says they were on a path to profitability, not a small feat for a tech company with nearly 100 employees. 
  • Banks are usually acquired for some premium of their assets and deposits. Simple had zero financial assets since it only collected deposits. We don't know their deposit totals, but with an average of 65,000 customers (note 4) making $1.7 billion in purchases, that means each spent about $2,000 per month. Let's say that each of its 100,000 accounts held double that on average ($4,000), the bank had around $400 mil in deposits at year-end 2013. I'm not sure what banks are paying for demand deposits these days, but it's not 25%.
  • Simple raised $18 mil since inception, but we don't know at what valuation. But with the $117 million cash deal, it appears that investors were rewarded adequately. It was no 10x exit, but it could have been 2x to 3x, or more. 
  • BBVA paid almost $1,200 per customer. Given that Simple's entire funding amount of $18 mil had already generated 100,000 customers ($180 per customer), clearly acquiring this customer base was not the main driver of the valuation. 
What it means
  • Moven, Holvi, Tink, Numbrs, and other digital-only banks will see a bump in their valuations. 
  • Y-Combinator and other accelerators will see a surge in retail banking startups (which leads to more great Finovate presenters)
  • Simple under BBVA will be a fantastic case study with plenty of material for fintech bloggers and analysts (and especially blogging analysts)
  • There will be more legacy financial institutions following this strategy (clearly, there were other bidders to push the valuation above $100 million); however, don't expect a stampede. Two or three acquisitions in 18 years is hardly a trend.
  • BBVA could very well make Simple its ING Direct-like brand ("BBVA Simple"?) across multiple new international markets (hat-tip to Venture Beat for being the only tech blog to focus on the international opportunity).
  • At least for a few years, before the founding team scatters to new ventures, it will be useful to have a semi-autonomous unit in Portland building out the services. 
Finally, I'll need a new VC-backed retail banking startup to obsess over. Time to get my Moven card activated. 

1. The first pure digital bank was Security First Network Bank (SFNB) which was dumped for $13 mil in 1998 after attracting $50 mil in deposits and $14 million in credit card receivables).
2. One could argue that E*Trade's ill-fated purchase of Telebanc for $1.8 bil in 1998 qualifies, but Telebanc was primarily a direct bank built through the phone channel.  
3. Interestingly, as part of BBVA, which is not exempt from Durbin price controls (as far as I can figure), Simple's interchange rate will likely fall dramatically, making the revenue multiple much higher going forward. 
4. The bank started the year with 30,000 accounts and now has 100,000. So, assuming growth was even over the year, the average annual number of accounts = 65,000.  
5. For more on pure-play digital banks, see our full Online Banking Report here (published in late 2011, subscription).


Simple to Launch Bluetooth-Based P2P Payments

By Jim Bruene on October 21, 2013 8:52 AM | Comments


I'm  glad I stayed until the end of Money2020. Some time after 5pm on day four (9 Oct 2013) of the biggest financial tradeshow since BAI Retail Delivery in Nov 2000 (see note 1), Josh Reich introduced two members of team Simple, Tom Wanielista and Collin Ruffenach. The duo proceeded to send each other the first Bluetooth-enabled payment I've ever seen. It looked a lot like a Bump payment, recently relaunched by Capital One 360, but without the awkward phone gyrations.

The feature is called MoneyDrop, built by Wanielista and Ruffenach, and allows Simple users within a few feet of each other to transfer money with a few finger swipes in the Simple mobile app. It's easy to use, since other Simple users automatically pop up on the MoneyDrop screen when they are in range (see screenshot below).

The startup didn't say when the service will be available to Simple's 65,000 customers, but TechCrunch reports it will hit iOS first (iPhone 4S or above required) with Android in the pipeline.

Bottom line: MoneyDrop is similar to the Palm Pilot "beaming" service PayPal began in 1999, but then quickly abandoned for email p2p model (see note 1). The ubiquity of smartphones makes it much more interesting today. Still, the requirement that both users have a Simple account, and newer smartphones, limits its uptake for now (note 2).

While I didn't know it at the time of the Money2020 session, Square was about to introduce a drop-dead simple P2P payment system (see Friday's post). That's a free and easy way for Simple customers to move money as well. It took just 3.5 hours in my test for money to move from my Chase debit card to my Simple account. Not as cool as instant MoneyDropping, but it works with any Visa/MasterCard debit. 

Despite all that, I think it's a great move by Simple. MoneyDrop provides a tangible leg up on other mobile banking apps, a moderate viral boost, and great publicity. 


Simple MoneyDrop P2P payment service (8 Oct 2013)


1. Retail Delivery topped out around 10,000 attendees (includes exhibitor staff) in 1999/2000. After just two years, Money2020 is at more than 40% of that.
2. A TechCrunch commenter noted that MoneyDrop also sounds like what stealthy Clinkle is planning to unleash on the world. Quite a coup if Simple beat them to market.
3. For more info on peer-to-peer payments (P2P), see our Online Banking Report issue devoted to the topic (Dec 2009, subscription).


Simple Revamps Homepage

By Jim Bruene on September 17, 2013 5:15 PM | Comments

image Sometime in the past few days, Simple swapped out its homepage for one befitting its name. A Google-esque white-on-white beauty that lets visitors do only two things (above the fold):

  • Request an invite by entering your email
  • Watch a 2-min video showcasing its platform (with great use case of saving/spending on new dog)

The record-low eleven words of copy focus on the basics:

  • No monthly fees
  • No min balance

Below the fold, prospective customers can gather more info as the homepage unfolds with more features an and benefits (see third screenshot).

Interestingly, if you've been to the site previously (as determined with cookies), you get a more stylized page promoting goal-based savings rather than the no-fee mantra (see second screenshot).

Bottom line: From a UI perspective, Simple is the Apple of banking, and its worth looking at how they pull off a very hip look online. This approach may not be right for your target audience, but there are lessons here for everyone in how to simplify website messaging, especially for first-time visitors.    


After: Simple homepage (above the fold), first visit (17 Sep 2013)


After: Homepage, after first visit (above the fold) 


Before: Full Simple homepage (4 Sep 2013)


After: Full Simple homepage accessed via vertical scrolling



Note: For more info on Simple and other Truly Virtual Banks, see our Oct 2011 Online Banking Report (subscription).


The Simple Finance Game or "Hiding PFM in Plain Sight"

By Jim Bruene on June 13, 2013 7:16 PM | Comments

image I've written thousands and thousands of words about personal finance management (PFM) including seven deep dives in our Online Banking Report (see note 1) and 130 131 blog posts. However, I've never articulated the behavioral aspects as well as NY Times software developer Andre Behrens who pens the occasional post at

In his Tuesday article, Gamification Done Right, he uses (Bank) Simple as an example of a great use of game mechanics: is the most beautiful bank site I’ve ever seen...but aesthetics are just a baseline. Because what Simple actually wants to do is get you to play a game. The game is called “Master Your Finances”....

HPFM lite: Bank Simple safe-to-spend balancee then describes a key part of this game, which Netbanker readers will recognize as Simple's Safe-to-Spend balance:

If there’s one number you’re guaranteed to see on a bank site, it’s your balance...I take this number for granted...what other number could there be? But once you start playing the Simple Game, you realize this is a number that matters to the bank much more than it matters to you. What you care about is how much money you can use right now.

He goes on to write about how Simple encourages users to keep savings in unique buckets associated with goals:

...saving has always felt to me like denying myself fun spending opportunities. In the Simple Game, the opposite has proven true. Because every goal has a name and a committed plan, and because the transactions are presented in small increments, saving has become an anticipatory pleasure.

Bottom line: Read the whole article. It may help reinvigorate your efforts to infuse basic PFM concepts directly into everyday online/mobile banking. Every customer should be able to reach the first level of the finance game simply by logging in. How do you take it to the next level? That sounds like the makings of post #132, 133, 134 .....      


The OBR PFM library consists of three reports penned a decade ago on account aggregation, the PFM enabling technology pioneered primarily by Yodlee. Then four reports in the modern PFM era looking at features, benefits and bundles (subscription required):
-- June 2012: PFM 4.0 here
-- May 2010: PFM 3.0 here
-- June 2007: Social Personal Finance here
-- Aug 2006: Personal Finance Features for Online Banking here
-- July 2003: Account Aggregation 3.0 here
-- Aug 2000: Account Aggregation 2.0 here
-- Oct 1999: Account Aggregation


FinDesign: Making it Easy for Visitors to Find Online/Mobile Banking Features

By Jim Bruene on April 24, 2013 7:04 PM | Comments (1)

image I know our readers have passed graduate level coursework in digital banking. But sometimes, even the PhD candidates need a refresher in the basics. Here's a fundamental that too many financial institutions neglect:

Make it super easy for visitors (non-customers especially) to find information about online and mobile banking

Just about every bank has an obvious login button in the top-right or top-left corners (or Chase who has it plastered in the middle). That's fine for existing customers. But what about those simply shopping banks? You would think that online/mobile capabilities are pretty important to someone checking you out online!

The big-four U.S. banks do a good job exposing online and mobile features. Citibank is especially focused with its "bank online....make memories offline" tagline mid-page (screenshot below).

But finding the online banking features often requires menu hunting (see BofA, Chase, and Wells below) and/or promotion scanning (see Citibank, Wells and Atlantic Regional FCU below). And sometimes, it's below the fold (Sterling Bank, BECU) or a screen away (see Comerica below).

Bottom line: You don't want to get too cute with the fundamentals. That's why we like the direct approach of both U.S. Bank and Bank of American Fork who position Online Banking as the first tab in their primary navigation (screenshots below). Alternatively, startups Moven and Simple use page-dominating screenshots of their mobile app to position themselves with mobile bankers (see below).


Bank of American Fork
No, that's not a typo. This community bank blankets American Fork, Utah, with its 13 branches. It places online banking in its own tab, plus it launches a huge mega-menu detailing all the personal and business online and mobile features. (Plus it has cookies, the kind you eat, in one of the four rotating promotions).


US Bank
US Bank is the only one with an "online banking" tab. And it's positioned in the pole position. Mobile banking is listed in the mega-menu.


The big 4 (alpha order) 

Bank of America
While it's not in the main tab, both online and mobile are mentioned on mega-menu displayed when you hover over the "Bank" tab. And there is an online banking promo in the lower left.


Similar approach to Bank of America. However, online and mobile are buried pretty far down the popup mega-menu.


Citi does not beat around the bush. Their entire homepage is devoted to driving users to online banking (first screenshot). And those that launch the mega-menu, see online banking, billpay & Popmoney at the top (second screenshot). However, the bank has no mention of "mobile" anywhere.



Wells Fargo
Online & mobile have the top position under "Banking" on the homepage. In addition, there are promotions and links scattered about the homepage.


Other examples

Atlantic Regional Federal Credit Union (link)
If you don't have online banking in the main nav, you need to compensate elsewhere. Atlantic Regional's BancVue-designed site uses the fashionable full-page graphic to draw attention to its four rotating promotions. Number 2 leads shown below leads directly to online banking info. The CU is also running a mobile banking announcement across the top of the page.


Bank Simple
Simple turns the double-play with an excellent welcome video and a snazzy shot of its iPhone app in action.


Moven Bank
Moven is all about the mobile, and visitors can't miss that with the page-dominating visual.


The bank currently has no mention of online banking on its homepage. However, once a visitor goes to the Personal or Small Business page, it is listed on the drop-down mega-menu.



Note: We cover financial website and mobile design issues periodically in our Online Banking Report (subscription).

Comments (1)

Card Transaction Data is Rich, Who Will Help Users Mine It?

By Jim Bruene on January 15, 2013 7:27 PM | Comments

image A few days ago, my wife and I were trying to remember the name of a restaurant where we ate on vacation several years ago.

The answer didn't really matter, but I shouldn't have needed to tax my meager memory cells because someone with perfect recall already knows its name, location, and how much was spent. In this case, Bank of America. I used its credit card.

I should be able to hit BofA's mobile app, type or speak "orlando," and instantly see the dozen or so charges I've made in Central Florida. Even better, I should be able to access the entire paper trail of card charges from that trip and to get a quick refresher of our itinerary four years ago. 

Yes, this is the vision of personal financial management and we are slowly getting there. But it's still a lot of work to manage the data flowing to third-party PFMs. And logging in to yet another program to find a small bit of info can be tedious (see note 1).

Bottom line: We can debate all we want about how many people will use the mythical thing called PFM. But most people want to know something about a past transaction at least once in a while. They shouldn't have to subscribe to a third-party service find it.

So, listen up, financial institutions. Follow Simple's lead (and Jwaala which pioneered it five years ago), and make long-term searchable transaction archives a core part of online and mobile banking (notes 2, 3).


Simple's natural-language search is an important feature (15 Jan 2013)
Note: Hashtags make subsequent searches even more powerful


Jwaala search



1. Though, for me, Mint's QuickView Mac app, has made transaction look-up much faster by doing away with the login.
2. And you can make "transaction search" a profit center. See Google's business results for ideas.  
3. For info on fee-based financial services, see the Online Banking Report (subscription) on fee-based online services (May 2011); paperless banking and online storage (late 2010); and lifetime statement archives (2005).


Making Banking Interesting

By Jim Bruene on December 19, 2012 9:35 PM | Comments

image When did banking become boring? Probably when all the gold doubloons and pieces of eight were replaced by paper checks and computer bits.

But it doesn't have to be this way. Most people have at least a passing interest in where their money is going. Sure, there are some negative issues around money, but the place where you track your spending and savings should at least be engaging. And that's rarely the case today.

But Bank Simple (and others) are making good progress.  


Simple Innovation #8: Full transaction annotation
with on-the-fly categories


As the startup continues to push the UI envelope (see note 1), it now lets users annotate transactions with uploaded images or PDF files (for a pic of that tantalizing dinner or the receipt for expense reimbursement), free-form memos, and categories created on the fly (#category like on Twitter).

That allows customers to create a historical record around their purchases. Or as Mechanics Bank's Bradley Leimer put it:

"I love it. It’s like Pinterest or Instagram in your banking application." 

For a more thorough look at the UI, check out the new video posted on the Simple blog.


Fully annotated transaction at Simple (19 Dec 2012)


1. See previous seven Simple innovations here.
2. Expensify offers similar photo capture and memo annotation capabilities
3. For more info on Simple and other Truly Virtual Banks, see our Oct 2011 Online Banking Report (subscription). image
For more on balance forecasting and other advanced PFM features, see our recent Online Banking Report: PFM 4.0 (June 2012; subscription).
4. According to Apple iTunes, Simple app downloaders are also "buying" Schwab, PageOnce, and Mint apps.


Launching: KeyBank's "myControl Banking" Provides Balance Forecasting via Mobile App & Online Dashboard

By Jim Bruene on November 20, 2012 11:31 PM | Comments

imageKeyBank is launching a new online banking and mobile service called myControl Banking. The mobile app became available today in iTunes (link).

The service is centered around myMoney Forecast, a real-time balance forecast shown at the top of the screen (see inset below). It's a vital PFM function that looks a lot like Simple's Safe-to-Spend.

But there is one significant difference. Key Bank users can make the forecast more accurate by manually entering Money In or Money Out transactions before they clear the bank (for example, a just-written check, see bottom of first screenshot). The bank automatically nets out any pre-scheduled bill payments, transfers, or ACH items and adds in recurring regular paychecks and transfers in. 

Key Bnak mobile myMoney ForecastThe interface also includes a weekly cash flow calendar so users can monitor the flow of their funds. And up to five goals can be established and tracked within the app and/or online dashboard. 

The mobile app does not (yet) replace Key Bank's regular mobile app. Before using MyControl, customers must sign up for it within online banking.

Analysis: The introduction of MyControl Banking is a fantastic move. It delivers the key missing component of online banking, a peek at what's about to happen with cash flow, without making users slog through a bunch of PFM features they don't understand.

imageIt provides Key Bank with meaningful differentiation, and gives them a platform to add more PFM content in the future.

Because Key Bank's MyControl raises the bar in digital delivery, we are giving it our OBR Best of the Web award (note 2). We are also retroactively naming Simple as a co-winner since they commercialized a similar balance forecast earlier this summer.


Mobile checking & savings balance visualization with integrated transfer button (left) and goals (right)

Key Bank myControl Checking     KeyBank myControl Savings mobile

Key Bank myControl Banking landing page (link, 20 Nov 2012)



1. This post was developed from info available within the app, in the product video at and in the FAQs. But I don't have an account at Key Bank, and there is no interactive demo yet, so I haven't used the service with live data.  
2. Since 1997, our Online Banking Report has periodically given OBR Best of the Web awards to companies that pioneer new online- or mobile-banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. In total, 88 companies have won the award. This is the first for Key Bank and Simple. Recent winners are profiled in the Netbanker archives.
3. For more on balance forecasting and other advanced PFM features, see our recent Online Banking Report: PFM 4.0 (June 2012; subscription).


The Best Card/Banking Activation Email Ever? Simple Innovation #7*

By Jim Bruene on October 31, 2012 2:04 PM | Comments (1)

image As a long-time student of the black art of marketing, I knew that I'd be in for some tricks and treats from Simple. And my first marketing message from the startup did not disappoint.

The eye-catching subject line practically guarantees a view:

Have you been cheating on us?

And the all-important opening line draws you in further:

So you've deposited money into Simple, and you've swiped a few times, maybe paid a bill. Not to get all clingy, but what's up?

The email (below) goes on to make the case for switching to Simple including a testimonial centering on the startup's spending map. Brilliant.


Simple activation email (25 Oct 2012)
Note: The fine print at the bottom of the message is limited to just
"Unsubscribe from Simple outreach emails." 

Simple card/banking activation email


1. See previous six Simple innovations here
2. 1953 Curtis ad for sale on eBay

Comments (1)

Simple's Twitter Feed Teems with Customer Problems

By Jim Bruene on September 18, 2012 7:47 PM | Comments

A month ago, our favorite discerning-technologist-masquerading-as-a-banker Bradley Leimer penned a fascinating post that looked deep into (bank) Simple's Twitter feed. He drew a dozen conclusions parsing the startup's back-and-forth with customers over Twitter. Here are a few more thoughts on Simple's approach.


imageSimple is the first (virtual) bank to go "open" by entertaining customers' wants, needs, problems, and various crazy requests on its Twitter feed. The chatter exposes the ugly underbelly of transaction processing, points out the startup's painful process of scaling up, eats up way too much staff time, and is just a royal pain in the you-know-where.

And I love it.

With every Tweet, the startup shows that it cares, that it is technically savvy, and most importantly, that it has a devoted following.  

Bottom line: Customers have many detailed questions that go unasked, and unresolved, because there is no convenient or timely way to get answers. Answering questions in public via Twitter, user forum, blog, Facebook page, etc., can be an effective way to solve them (note 1).

Simple has a unique positioning that is unlikely to be copied by existing banks and credit unions. But everyone can learn from its experiment in openness, frank talk, and use of humor. 


Simple's Twitter page (link)

  Simple's Twitter page

1. We've covered various social media outlets in our Online Banking Report during the past few years, including: Banking on Facebook (Feb 2012), Connecting to Customers with Twitter (May 2009), and Bank 2.0 (Nov. 2006). Subscription required. 

Categories: Bank Simple, Service, Twitter

Bank Simple Innovations #5 and #6: Message Badge & Message Center

By Jim Bruene on August 23, 2012 8:35 PM | Comments

image Following it the third installment on the innovations from Simple. The onboarding process was covered in the first two segments, now we move to the online UI.

Part 1: Innovations #1 and #2: Demo mode after login
Part 2: Innovations #3 and #4: Debit-card mailer


#5 Red message-waiting badge

This week, Simple launched Goals, its first budgeting/savings feature. Customers were alerted to the new feature via email (see note 1) and online message. Within online banking, users are notified of new messages by a red badge over the Support button on the top-nav (see first screenshot).

Clicking the button causes the right-side of the screen to turn into an integrated message center (see below).


#6 Integrated message center

The Simple message center is integrated into the main online banking UI better than most (screenshot 2). Users have three choices to click on: 

  • Call Us launches a popup with a large toll-free number that no user could overlook (screenshot 5)
  • Start a Conversation launches a blank email form integrated into the UI (screenshot 3)
  • 1 Unread Message which then displays the full message along with a place to respond, even for this marketing message (screenshot 4)

The message notification badge is intuitive, especially for iPhone users. And the way it contrasts with the gray nav bar really makes it pop. The integrated message center takes a little getting used to, because it's not at all what I expected. For example, I thought "start a conversation" would lead to an online chat. And initially I didn't see where the full message was located. The "1 Unread Message" button looks more like an indicator, not so much a clickable item.

Bottom line: Once I figured out where to click, I appreciated the integrated approach. It is nice to be able to respond to messages without losing site of my main task, checking my balance and transactions.


1. Simple's main online banking page shows a red number badge in right-hand corner when an unread message is waiting (22 Aug 2012)
Note: Transaction listing includes a tag showing when a tip has been added

Simple's main online banking page shows a red number badge in right-hand corner when an unread message is waiting  

2. Simple's integrated message center

2. Simple's integrated message center

2a. Message center close-up              3. Create new message
Note: All message center functions remain pinned to the right-side of the main online banking page

image       image

4. Full message


5. Simple "Call Us" popup

Simple "Call Us" popup 


1. The email itself was a let down, a generic message requesting that I log in to see what was up.
2. For more info on Simple, see our look at Truly Virtual Banks in our Oct 2011 Online Banking Report (subscription).
3. We've tackled remote banking customer service and messaging a number of times in previous Online Banking Reports. The last one was Live Help published last year.


Bank Simple Innovations #3 and #4: Debit Card Mailer

By Jim Bruene on August 14, 2012 3:05 PM | Comments

image Below is the second installment of our multi-part series on the innovations from Simple. The onboarding process is covered in the first two segments. 

Part 1: Innovations #1 and #2: Demo mode after login


#3 Novel card mailer & copy

If you've been following the Bank Simple story, you've probably already seen it's unique card mailer. It's a simple package consisting of a cardboard CD-mailer (screenshot #1) with the Simple name on the outside.

Inside, is a clever matching cardboard piece with the card rubber-banded to a detachable bottom piece designed to be used as a very basic wallet (note 1). The cardboard says "cash" on one side and "card" on the other.

Copy is friendly and very unbank-like (see screenshot #2):

Your new Simple Visa card is
here. Excited? We're a bit giddy.

Activate your card and try it out.
Please let us know what you think.

It's the best card mailer copy I've ever seen, but it does strike me as just a bit overly self-congratulatory. I think I'd have put a big THANK YOU at the top instead of the IT'S A GOOD DAY. But that's a small point. Also, I love that they ask for feedback, but it would be nice to publish their email or Twitter handle to make that easier.

The back of the mailer (screenshot 3) is all business with the toll-free number, a simple URL to see the detailed terms <>, and the name of the card issuer (Bancorp Bank).

Bottom line: Even though the Simple package appears austere, it most certainly cost much more than the generic #10 package customers are used to getting from banks and card issuers (first-class postage was $1.95 alone). But if you want users to really believe that you are different from the megabanks, you can't just drop a plain-vanilla card mailer into their hands.


#4 Humanizing the card activation/PIN selection process

Users must dial a toll-free number to activate the card and create a PIN. While the lack of online or mobile options was a letdown, the bank did a good job with the call. As expected, the activation number was answered by a recording. But the recording from a real customer service rep, Rachel, who apparently has been actively engaging customers for more than a year.

There were no surprises in the activation process, users calling from a previously known phone number simply key in their card number and last-four digits of their social security number to activate. Then select a PIN by entering four digits twice.

The bank didn't do any upselling, but did offer the option of connecting with a service rep for questions. I took the bank up on the offer, and briefly chatted with a service rep about the spending limits on the card. She was personable and answered the questions with no hesitation. And I liked how they answered the customer service number:

"You've reached customer relations at Simple. Let's see if someone' is available to take your call."

Bottom line: While Simple's card activation processed followed industry standards, you still could sense they'd put some thought into it. The little touch of being greeted by a recording from a person using her real name, helps build rapport during the opening days of the relationship.


#1: Simple debit card mailer -- envelope front (13 Aug 2012)
Note: DVD shown for scale only, not part of package.


#2: Card mailer front


#3: Card mailer back


1. The "rubber-band wallet" may be lost on some. My wife didn't get that one at all. But she still thought it was a cool way to hold the card to the mailer without using  adhesive which must be scraped off.


Bank Simple Innovations #1 & #2: Demo Mode After Login

By Jim Bruene on July 31, 2012 5:38 PM | Comments

image I started my <bank> Simple relationship yesterday by responding to an email invite supplied by a reader (note 1). As expected, the application and initial on-boarding experience is tremendous. I've already catalogued a few dozen noteworthy innovations. But instead of writing an enormous blog entry, I will deliver them in smaller doses. 

#1 Allowing account login right away

One area ripe for improvement at many FIs is the online on-boarding process. Typically, after applying for an account, new customers must wait a week or more to get account info and cards in the mail before they can even login to their account.

At Simple, once the new account application is verified and approved (this took less than 30 minutes for mine), users are invited to set up their account online and to download the mobile app.

After completing that process, users can log into their account and look over the features. Because new accounts are devoid of data, the startup offers a demo mode that allows new users to start learning about the account by using its features with fictional transaction data (see #2 below).

Bank Simple invites new customer to login and "have fun"


#2 Interactive demo mode

Many banks have an online banking demo available. Usually, it is limited to a static guided tour. But the best ones are also interactive, allowing users to play with the features as if they were using their own account.

Simple has taken the latter approach with an interactive demo. But instead of burying it somewhere on the public website, the startup has built a demo mode option right into its online banking interface. Users simply choose the demo option in the intro box on the main page, and the site opens up full of sample data that users can play with.

This is especially useful for new users who have no real data to manipulate.

Once in demo mode, users can turn it off using the toggle switch in the upper left or by clicking the X next to where demo mode was launched.


Before: Demo mode is activated with this button

Entering demo mode at Bank Simple

After: Demo mode is shut off with toggle

Bank Simple demo mode


1. Thanks to Michael Bagniewski, VP & Director of Information Technology at PNA Bank, for sharing his extra invite (he inadvertently put himself on Simple's waitlist with two email addresses). Apparently, Simple invites are transferrable, though none are listed on eBay yet.  
2. We looked at the new crop of Truly Virtual Banks (including Simple) in our Oct 2011 Online Banking Report (subscription).


Feature Friday: Bank Balance Forecast

By Jim Bruene on June 22, 2012 11:49 AM | Comments

imageAs Simple begins the 6-month process of converting its 100,000-person wait list into paying customers, I expect much attention will be given to its flagship UI innovation, a forecast of your "free cash" after accounting for upcoming transaction. Simple has trademarked the feature as the Safe-to-Spend balance (screenshot below).

We've discussed it a number of times in our Online Banking Report (subscription), but we haven't explored it in Netbanker. Here's why balance forecasting is so important:

  • Intuitive UI: Hundreds of millions of people worldwide log in to their bank accounts at least weekly. Why? To see their balance and to make a mental calculation of whether things are on track. Whether they consciously think it or not, they are making their own calculation of what's left in the account to spend. And given how horrible the average person is at making complex math calculations in their head, it makes so much sense to put that number right in from of them at all times.
  • Advocacy: Doesn't everyone want to believe that the place where they entrust their live savings is looking out for their best interests? But events of the past five years have seriously eroded consumer confidence in financial institutions, especially large banks. Providing a new tool that really helps consumer understand their financial position, and reduce the chances of overdrafting, could go a long way in restoring confidence that the bank is not the enemy.
  • Gateway to advanced PFM services: Doing important calculations on the consumer's behalf is what PFM is all about. So showing that you have the wherewithal to make this important calculation, can be the entry point for delivering more advanced PFM services, hopefully at a profitable monthly fee (note 1).
  • Great competitive weapon: Want to compete with Bank Simple? Want to show you are ahead of the curve. This is a perfect, tangible feature/benefit.

Bottom line: This is not the easiest feature to add. Maybe one of the hardest. And you should expect to spend quite a bit of time explaining it to employees and customers. But it absolutely will be part of every online banking system and third-party PFM service (see also, HelloWallet's "left to spend below).  

Simple makes it impossible to miss your "Safe-to-Spend" balance (22 June 2012)

Bank Simple "Safe to Spend" balance

HelloWallet's mobile app has a "Left to Spend" balance for both in total and for the specific budget category (22 June 2012)



1. We are putting the finishing touches on an update of our PFM report (May 2010, subscription). You'll see an announcement here next week.


Simple Releases First Mobile Banking App, Hits #13 in Finance Category of iPhone App Store

By Jim Bruene on May 15, 2012 7:02 PM | Comments

image The much-anticipated launch of the first truly virtual consumer bank is fast approaching. How do we know? From its tweets, of course (see inset).

Bank Simple tells a twitter follower when to expect a beta inviteCustomers who joined the wait list in 2010 are being told publically that they will receive invites "before spring is over." Others are being told "early summer," "mid-to-late summer," "early fall" and "fall."  Based on those responses, it looks the company plans to work through its entire 100,000 wait list within the next 6 months.

A critical piece of the grand opening is pushing the Simple mobile app past the gatekeepers at Apple. That happened last week (9 May). Within 48 hours, the app had already jumped to 13th-most-popular in the finance section, despite the fact that no one but a few early testers could actually use it. Today, it's fallen back to 53rd in the rankings.

In terms of how it works, all we can do now is drool over the half-dozen screenshots published in the store and on the Simple website. We especially like how they've anchored the forward-looking "Safe-to-Spend" balance in the top-center of every page (see below). The app also includes remote check deposit, something the startup has talked about before.

We'll look at it in much more detail once we get our Simple account, presumably in the next three to four weeks.


Simple mobile banking app, v1.3.1 (14 May 2011)   
Itemized transaction with                     Extra authentication code  
Safe-to-Spend balance on top               for higher-value transfers

image          image


Top 10 Reasons Why BankSimple Dropped the Bank

By Jim Bruene on November 8, 2011 5:38 PM | Comments (3)

Simple login area

When I started my company in 1994, I was told by the state that I couldn't have "bank" in the name unless I was one. So one of the first questions I asked BankSimple founder Josh Reich early last year was how they were getting past that issue. He said it was not a problem since BankSimple was just a brand name. The company name was, and still is, Simple Finance Technology Corp.

So evidently, the startup wasn't forced to change. That got me to thinking about why they moved away from BankSimple, which is a great description of their initial product set. Here is what I came up with.


Top 10 Reason for Changing the Name from BankSimple to Simple

10. While it may be OK in the United States for a non-bank to use "bank" in a brand name, that may not be the case in other markets the startup hopes to eventually conquer

9. There's been lots of bank bashing the last few years; so it avoids negative connotations

8. One word names are cooler than two-word mashups

7. It allows them to move into other less "bankish" areas such as payments and offers

6. It allows them to partner with credit unions, card companies, and other non-bank financial companies

5. Can add any other word to "simple" to create great product names, e.g., "Simple Billpay"

4. The generic word, beginning with S, is being used by the highest-valued fintech startup in the world, Square

3. Much easier to riff off of "simple" for killer taglines (see login screen above)

2. They don't have to worry about anyone saying "occupy simple"

And the most important reason (drum roll):

1. Tweets can have 4 more characters (ba dump bump)

Yes, BankSimple made a good strategic move, though I'll miss the old name, which had a nice oxymoron-ish quality to it.

Comments (3)
Categories: Bank Simple

New Online Banking Report Published: True Virtual Banking Has Arrived

By Jim Bruene on November 3, 2011 9:05 PM | Comments

image I still remember the day in early 1999 when I met with Elon Musk and his 3-person team in a borrowed conference room in Palo Alto. They were plotting the complete and total disruption of the banking industry and fully expected to be one of the largest five U.S. banks by now.    

The startup was named and its original business plan was to acquire one or more existing banks to provide the credibility, and deposit insurance, of a traditional bank. While I was in awe of their ambition, I thought the plan had a flaw. I told them they'd be better off staying virtual, with no bank ownership slowing down their decision making and ability to take risks.

I'll never know if they would have listened to me, because soon thereafter began experimenting with P2P payments via email, and they saw that it was going to be huge. So they jettisoned banking, merged with PayPal, and the rest is history.

Why the reminiscing? That was the last attempt by a major tech startup to take on the U.S. retail banking industry via virtual channels (note 1).

Fast-forward to 2011: At this year's FinovateFall, we saw the launch of not one, but two well-funded attempts at disrupting the incumbents. One through debit/checking/savings and the other through wealth management:

  • BankSimple: DNA from Twitter, analytics, and consulting
  • Personal Capital : DNA from Intuit, PayPal, Everbank and Fidelity Investments

Both companies are what I call True Virtual Financial Institutions, meaning they are complete front-ends to your money, including transaction capabilities and customer service, but they outsource the actual holding of customer funds to fully-regulated partners which pass FDIC/SIPA protections. This allows the newcomers to focus on user experience and service while moving much faster without the regulatory friction experienced by traditional financial institutions.

Others well-known companies using virtual models: Betterment (also profiled in the report), (Plastyc) and Perkstreet.

Note to bankers: True virtual banking needn't be limited to tech startups. These techniques can be employed by traditional companies to expand beyond regional or industry boundaries. The report outlines seven models for doing just that.


About the report

True Virtual Banking Has Arrived (link)
BankSimple, Personal Capital, Betterment and others go branchless,
paperless and "bank-less"

Author: Jim Bruene, Editor & Founder

Published: 1 Nov 2011

Length: 48 pages

Cost: No extra charge to OBR subscribers, $395 for others here


1. I should add that Lending Club, Prosper, Zopa qualify as major entrants bound on disrupting banking from the lending side.   
2. BankSimple, Betterment, Personal Capital and Plastyc FinovateFall 2011 demo videos are available here.


BankSimple Reveals 2 New Banking Partners: The Bancorp Bank and CBW Bank

By Jim Bruene on June 22, 2011 2:29 PM | Comments (3)

image Yet-to-be-launched BankSimple scored more great press this month with a tease on the cover of the July/August issue of Fast Company:

The Zappos of Finance

The one-page profile in the magazine's Next column (p. 32) is titled:

A Bank that Doesn't Suck

For Netbanker readers, the article mostly covered familiar ground. However, there were two huge reveals near the end that I almost missed; two banks the startup is working with to power its services:

  • Bancorp Inc, a public holding company (TBBK) that powers 300 affinity banking programs around the country (note 1) which will likely power BankSimple debit cards among other things. Bancorp Bank EVP Pete Chiccino was quoted in the FastCompany article.
  • CBW Bank, a small privately held bank based in Weir, Kansas with just $6 million in deposits (note 2), which will likely hold BankSimple-gathered deposits.

BankSimple has a wait-list of 50,000 for beta invites. According to the article, 12,000 of those will be allowed in by year-end before its general-public launch in 2012. 


1. The Bancorp is a Finovate sponsor
2. It took 119 years for the bank to get to $6 million in deposits for a net growth of $50,000 per year. They'll get that much in the first 10 minutes after BankSimple opens its doors. 

Comments (3)
Categories: Bancorp Bank, Bank Simple

BankSimple's Vision Statement is All About High-Touch

By Jim Bruene on March 30, 2011 5:15 PM | Comments (1)

image Over the years I've published more than a million words and this is the first time I can remember using the term "vision statement," and in a headline no less. I've spent enough time in large companies to know that when you hear "vision statement" it's time to run for the exits. Usually, even the employees don't buy it, let alone the customers it's supposed to impress.

However, BankSimple's vision statement is not only believable, but also sets a great tone for the startup's upcoming launch. It's also cleverly positioned on the homepage to "jump up" above the fold as you scroll down.

Why does it work? Everyone knows that BankSimple, with its Twitter DNA and $3 million in venture funding, will have good tech. So the startup focuses on people and service in its vision statement to make it clear that it's not some aloof, high-tech company where it takes a search warrant to find the customer support number, but an actual human-powered organization (see details below). Nice touch (note 1). 



Breaking "the vision" down point by point


It's no surprise that the non-bank bank is tackling the fee issue. It's in the news and it's always high on the list of customer dissatisfaction. But notice they are not using the word "free" or saying "no fees." They are just saying they will be transparent with pricing and will not surprise with penalty fees when you can least afford them.



Everyone talks about service, so this isn't particularly novel. But the use of "prioritize" and "real" will resonate with the segment they are targeting. 



image Grabbing the mobile positioning is brilliant. That's absolutely where the market is headed, so you might as well make it a key differentiator. And while no one knows what "true mobile banking" means, it sounds good.



I'm not sure this adds a whole lot to the vision. In the text by this point, the bank talks about "plain, simple language." Sounds OK, but not as compelling as the other points. I'd have nixed it and kept it to a tidy four-point vision instead. 



The tagline for this point is, "You're a real person, not an account number."

Bingo. Here's a pure-play online bank run by uber-techies, but they are saying they are really all about the people. High tech. High touch. Love it!


Note: Yes, I'm aware that BankSimple abbreviates to BS. And no, I'm not its biggest fanboy. See this self-proclaimed "love letter to Bank Simple."

Comments (1)

BankSimple May be First Invite-Only Retail Bank Launch

By Jim Bruene on September 14, 2010 2:54 PM | Comments (3)

The Bank nightclub, Las VegasI'm not sure what BankSimple told investors, but it worked. The non-bank bank startup grabbed $3 million in VC money last week. The company is positioning itself as a tech company rather than a financial services provider, a smart move for valuations.

imageI finally caught up with co-founder Joshua Reich a few days ago. I came away from that conversation even more impressed. These guys are really trying to reshape the banking experience. They talk more like a credit union than a bank, meaning they are maximizing the customer experience instead of the shareholder one (see note 1).

Granted it hasn't launched yet, but so far the "better experience" strategy is working wonderfully. The startup has a 20,000-person wait list for an account. Think about that, a waiting join a bank. I never thought I'd write that sentence. If 75% convert to actual customers, BankSimple will have already hit its first-year goal. A nice problem to have.

Graphic from BankSimple website

And the beauty of so-called scarcity marketing is that you can use invite codes as a sort of virtual currency to reward existing customers and other influencers. BankSimple plans to use invite codes to encourage certain unspecified behaviors from existing customers. It's a page out of the Silicon Valley playbook. Google kept Gmail invite-only for several years. There was a even a time where people paid real money on eBay for a Gmail invite. The same could happen at BankSimple. 

Other things I learned:

  • 42% of its prospect base already uses Mint, so BankSimple is content to let someone else handle the heavy lifting in the aggregation space. At launch anyway, they will show activity only with direct BankSimple partners. 
  • As previously reported, the bank is committed to mobile remote deposit. They've spent considerable time working the kinks out of that. They even looked at extending the concept to bill payment, allowing users to simply scan bills and have them automatically paid; however, too many tech problems surfaced, so the effort has been shelved. 
  • Focused on real-time everything. They may be the first bank (at least in the United States) to have everything they do occur in real time. They think that will greatly reduce customer service headaches and expense.

1. But clearly BankSimple is no nonprofit. The VCs are there because they smell a 10x return, not because they don't like banking fees.
2. Photo credit: The Bank nightclub in Las Vegas.
3. Previous posts on BankSimple here.

Comments (3)
Categories: Bank Simple, Launches

BankSimple Provides Sneak Peek of User Interface on iPad App

By Jim Bruene on August 12, 2010 5:49 PM | Comments

imageThe bank that everyone's talking about, and no one is using, finally released a few peeks at its user interface. Based on these screenshots posted on the bank's homepage (see last screenshot), it looks like a killer iPad app (note iPad logo in upper left of first screenshot).

image The startup also unveiled a new logo, moving from the trendy gray/red (left) to a bolder font in a very bank-like and comforting blue.

Finally, the startup has purchased the .com version of their URL, an important, albeit expensive, pre-launch move. Currently, redirects to the old .net version.


1. Safe-to-spend balance appears to incorporate future scheduled payments and displays goals to help users keep the bigger picture in mind, rather than spending the $1,208 on drinks and dinner out.


2. The bank's customer service focus illustrated in chat screen with co-founder Alex Payne. On the right you can get a glimpse of the transaction flow.


3. My favorite screenshot. It indicates the bank will use out-of-band authentication, a must-have these days. It also demonstrates that BankSimple is really thinking through the UI. Instead of tiny little digits requiring reading glasses, the bank provides the 5-digit code in big, bold numbers. They are also rendered in an attractive flipboard style.



Note: HT to Keith Caswell @kthcswll for the tip.


BankSimple Scores More Press

By Jim Bruene on August 2, 2010 11:05 PM | Comments (3)

image In the history of online banking, has there ever been so many words written about a company before it's even opened for business? I can't think of any.

It's a two-edged sword. Free publicity is great for building a brand. But it can also ratchet expectations up so high that delivering the goods becomes harder.

The BankSimple team is keeping things low-key on its website. You even have to search a bit to figure out how to get on its mail list (see note 1). But some of the press accounts are downright giddy over the yet-to-be-launched-nonbank bank (note 2).

image Case in point: Friday's Mashable post which generated 1,000 Tweets, 365 likes, 33 comments, and eight Diggs. The author, Jennifer Van Grove gushes about BankSimple, using terms usually reserved for a new Apple i-something launch:

The Banksimple formula is one that puts customers first and focuses on automatic, "worry-free" money management with a digital twist and penchant for social integration.

...the startup's bleeding-edge approach to banking that we predict will be both controversial and groundbreaking.

And these were the subheads in the article:

  • A New Way to Bank
  • Predictive Money Management
  • Social Media Meets Banking
  • Fee-Free for Real
  • The Zappos of Banks

But after all that setup, the reader comments were predominantly skeptical/negative. I think it all sounded a little too good to be true. 

Relevance to Netbankers: Despite the skeptical Mashable comment thread, there is a real appetite in the country (world?) for fresh ideas in the banking sector. But there's also huge trust hurdles for financial startups. BankSimple is planning a hybrid model. A Web-based, social-media-loving startup running on the banking rails (note 3). It worked for PayPal. It will work again (note 4). 


1. Prospective customers must first click on the Join tab on the far right of homepage. Users are asked for their email address (obviously) and something I've not seen before, their bank balance. Maybe it's just me, but that seems a little too forward for a beta invite page and may dissuade some from leaving their name. Also, it seems just a bit out of step with the bank's populist message. Not a big deal.    
2. And given that this is our third post on BankSimple, I guess we are in that category as well.
3. We've written about this theme many times over the years; the last time we published a full report was almost ten years ago: Online Banking Report: Building the of Financial Services.  
4. This is a general statement. Until I understand what it's doing, I'm not predicting anything about BankSimple, other than it will get a lot more press.

Comments (3)

Lifehacker, Bank Technology News Spread the BankSimple Meme

By Jim Bruene on June 5, 2010 8:34 AM | Comments

imageBankSimple has already become well known among the digerati and its notoriety is spreading to the mainstream press (here and here). Bank Simple's latest PR coup was being named Tuesday to the Bank Technology News annual top-20 innovators list (see note 1).

Quite a feat for a company that hasn't yet launched or even shown its service outside a small group of testers (note 2).

Lifehacker Asks, "Are you happy with your bank?"
Lifehacker, a popular blog (note 3) that deals with personal productivity and other minutiae of day-to-day living, positioned the BankSimple story as a backlash against traditional banks in a post titled, "Are You Happy with Your Bank?"   

imageAfter a few speculative paragraphs about Bank Simple, the blog concluded with a quick poll to see how motivated its readers were to switch banks. I expected this self-selected sample to be very anti-bank. But surprisingly, more than half the 3900 voters declared themselves relatively satisfied with their bank. Only 13% said they were unhappy and another 30% said they'd consider consider switching.

Given the sample bias, you can't read too much into the the data. But it does demonstrate that even in a worst-case polling situation -- where participants are pre-conditioned with a vision of a utopian entity that does everything right with nary a fee -- it's still difficult to budge consumers away from their existing bank/credit union.

1. Four recent Finovate alums were also listed: Backbase, CashEdge, Intuit, and Segmint (see our Finovate blog post yesterday).
2. If you read all the published articles, a fairly thorough picture of Bank Simple emerges. It will not be a bank, but a simple web 2.0 interface (e.g., Twitter/Tumblr) on top of a checking account (e.g., what PayPal did for online payments ten years ago). 
3. According to Compete, Lifehacker averages about 1.2 to 1.5 million unique U.S. visitors each month.


Complexity in Financial Services: Can We Really Bank Simple?

By Jim Bruene on May 28, 2010 2:34 PM | Comments (2)

Financial confusion Despite the best intentions of governments worldwide, does anyone really believe that consumer financial services will become simpler anytime soon?

Yet, I've been intrigued by Bank Simple and apparently, so have many others. Evidently, Twitter/Square founder Jack Dorsey and TechCrunch founder Michael Arrington talked about Bank Simple on stage at the TechCrunch Disrupt conference this week.

While most articles are hopeful, first-mover skeptics have already posted counterpoints to the startup's "motherhood and apple pie" messaging (make sure you read the comments on Ron Shevlin's post).  

I can't remember any financial entity, other than those with celebrity founders (Square, Revolution Money, Virgin Money) receiving this much attention before it even launched (note 1).

imageI still don't know exactly what Bank Simple will offer. Certainly, they have a great name and a positioning that's right for the times. But can they live up to it? Basic banking really is pretty simple. You deposit some cash, earn some interest, then take it out and give it someone else. Rinse. Repeat.

Innovation often creates complexity
Banking got complicated only when new features were introduced. People got tired of going to the bank, pulling cash out of the vault, and hauling it around to pay people. So checks were invented. Payment became much easier, and personal security greatly enhanced. And as a nice by-product, the returned check was the first PFM tool, serving as a handy authenticated record of who was paid for what, when.

That worked great for a couple generations, but then too many people wrote too many bad checks and it started to become a slow and cumbersome process to identify yourself at the point of sale. So debit cards came along to speed the purchasing process, fight fraud, and return some fee income to the issuing banks (note 2). And the electronic records of merchant name and SIC code made record keeping even easier, originally on paper statements and now online.

Those two innovations, checks and debit cards, really helped consumers save time and hassle. But did they make finances simpler? Not really. Those payment services led to NSF/overdraft fees, PIN vs. signature decisions, card authorizations, check-hold times, float, authorization holds, chargebacks, annual fees, check-printing fees, positive pay, reverse positive pay, remote deposit capture, mobile remote deposit capture, Quicken, My Spending Report, Mint, interchange regulation. The list goes on and on.

It may not be simple, but no one (except visitors to this UAE hotel) is going back to carrying gold nuggets to the general store to buy crackers out of a barrel.

Technology MIGHT be the answer
Technology advances often bring wonderful, sometimes life-altering, benefits (think electricity or water purification), but often at a cost of increased complexity. As much as I love, love, love the Internet, it's not known for its overall ease of use. 

But there's a glimmer of hope on the horizon, and you are carrying it in your purse, pocket, or briefcase.

The smartphone.

I'm still amazed at my iPhone after more than 2.5 years of continual use (note 3). It's the one and only device I've owned that makes life better AND simpler, albeit at a hefty monthly fee.

And I believe mobile apps will ultimately make banking better AND simpler. Why?

  • The phone knows who you are and where you are, vastly simplifying authentication at the point of sale and reducing fraud significantly.
  • The phone (via real-time links to the bank and retailer) knows exactly how much money you have and what you are buying, virtually eliminating overdrafts and unknowingly overspending.
  • The phone can provide an instant, secure way to pay any person or any business, with immediate settlement.
  • The phone has built-in scanning capabilities for depositing checks, capturing receipts, documenting insurance claims, etc.
  • The phone has access to every database on the planet to assist in shopping, evaluating, financing, insuring and closing any deal for any thing.
  • And if you have a question about any of the above, just speak into the device and you'll get an answer in moments via voice recognition self-service.

So yes, there is hope for banking/financial simplification, and I think it will almost exclusively come through mobile apps with the occasional visit to an online mission control (note 4). So if you want to compete with Bank Simple, or Bank of America for that matter, get cracking on your mobile strategy (note 5).  

1. Now that Twitter's Alex Payne has been added as a co-founder, Bank Simple could probably be classified as a celebrity-founded company.
2. I'm still using my first-gen phone bought in Oct. 2007. The battery is still very strong, the touch-screen virtually unmarked, system performance seems unchanged, and it only crashes a couple times every year despite being carried, set down, and tucked away day in and day out.
3. This is a vast oversimplification of the move to debit cards, but the point is they disrupted checks at the point of sale.
4. If you are still unconvinced that mobile will overtake online for banking tasks, here's a thought:  Consider how often you go online now to check the local weather. A waste of time -- right? -- when all you have to do is press a button on your smartphone. The same near-instant response will happen for basic banking info.
5. In our Online Banking Report, we've published several reports on mobile banking strategies.

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