I'm sorry, but I want my bankers to be grave old men in suits. I also want my bank to have offices all over the world and I want to know that they are handling money many hundreds of times larger than whatever I have.
I don't want a bank started by a guy called al3x, and who just left twitter. It sounds innovative, but it doesn't sound...dependable.
And if there is one feature I want my bank to have, it's dependable.
That's why I'll be using it first, and lots of my fellow college students who have a lot less to use and a lot more to gain from using a bank like BankSimple.
Time is in short supply, and fees eat away at my little pool of cash.
I'm willing to take the risk, and willing to put my money in the hands of people who are young, smart and innovative, instead of bureaucratic, slow and set in their ways.
Not only that, but if you'd checked, your cash will be FDIC insured through their partners. I certainly don't have a quarter of a million sitting around.
Finally, the way things are going now, the government is the only reason those "grave old men in suits" still have your money at all.
ING Direct (ingdirect.com) is an amazing online-only bank that has virtually no fees. They've got amazing customer service. And they have the best bank web user interface I've ever dealt with. BankSimple will need to differentiate themselves from ING Direct somehow.
edit:
Why the downvotes? I use ING Direct as my main bank. I love it. BankSimple will need to differentiate themselves from ING Direct to win me over.
edit #2: I have nothing against BankSimple. I hope they succeed. The market could use another friendly, efficient, tech-savvy bank. Perhaps they will drive innovation in the banking industry.
When I first signed up, their savings accounts were yielding 3% interest, which seemed great considering no minimum balance and no withdrawal fees. With the dip in the economy, they're just barely hovering over 1% now. Even still, if you compare that with the two other banks I've dealt with (5/3 and Chase), they don't really have anything that comes close unless you have massive balances or you want to tie up your money.
I'd love to hear if there are other easily accessible savings accounts out there that can tie into your checking account, with no minimum balances or withdrawal fees, that offer comparable interest rates.
My finances aren't stable enough right now to look into anything like CDs, Bonds, etc - it needs to be an interest bearing savings or checking account.
HSBC Direct is an online-only bank that offers slightly better rates than ING Direct. In fact, their rates are possibly the best (and ING the 2nd best).
The downside to HSBC, is that their web interface and operations of business are antiquated. While I have an online checking and savings account with them, I really only use the savings account. I just can't bring myself to deal with them because the user experience of ING Direct is so much better. For example, if you want to transfer money from checking to savings (or vice-versa), with ING it's instantaneous; but with HSBC you have to wait a business day! Ridiculous, I say.
HSBC is great if you're traveling/living in east Asia. I traveled through nine countries in Southeast Asia last year and never paid an ATM fee. Their ATMs are all over, and they're also partnered with many other Asian banks.
If you live in the USA (like me) I'd say keep your 6-to-12-month cash reserve in HSBC. And do your day-to-day banking and short-term savings with ING Direct.
This was a great article, thanks for sharing it. I'm a huge fan of twitter myself, so I can only imagine how awesome this bank will be. I wish him luck in his future endeavors.
ING is part of AllPoint's network. You can get instant withdrawals. There are 32,000 surcharge-free ATMs located in all 50 states, including major retailers like Target, Rite Aid, 7-11, and many others.
For deposits, I use direct deposit via my employer which works great. I get my money the same day everyone else does. For depositing checks, I use my credit union (2nd bank). Since I only get a few checks/year, this is not an issue for me.
I use ING direct for checking, savings, bill pay, and personal money transfers.
I use e*trade's "Max-rate checking" product and it's amazing:
- Until recently they had a great interest rate on your checking account (2.5% APY).
- I also get direct deposits, and mail in checks (is more convenient than going to the bank for me, and I don't need the money right away).
- They offer ATM fee refunds at ALL ATMs. That's just awesome. Not only do they not charge you a fee, they'll instantly refund the fee the ATM charges you (comes in very handy in Vegas ;)
It's no-fee with great customer support. I've been very happy with them.
your cash will be FDIC insured through their partners
This is not something I'm willing to take their word for without seeing a copy of a legal opinion from someone independent. I don't want to find out after they go under that they've simply been depositing their reserves in an FDIC-insured account with another bank, and that as long as that partner bank stays afloat the FDIC won't pay out.
Is it clear that they are actually going to be a real bank? That bit about FDIC insured through their partners implies that they are more of a marketing driven company that off-loads the actual banking business to real banks providing white-labeled services.
My bank (RBC) is run by old men in suits, plus I pay no mandatory fees. Optional fees are another thing. If I want the convenience of using an ATM not run by the bank, I pay a surcharge. But, it's a big bank, with ATMs everywhere I go. The surcharge is never paid. :)
Also, you only get charged fees if you use a "service" of the bank, such as overdraft protection.
If their revenue model of "interest margin" uhm.. interests you, I would suggest joining a local, state-chartered credit union. It is how they have been doing it for years!
[EDIT] and if you are young, time is not in short supply and is actually on your side
The dependable banks... are those the ones that taxpayers just bailed out for hundreds of billions of dollars because they were about to destroy the entire financial system?
Notice how even when they screwed up, they were still bailed out. Obviously I'm not thrilled that any bank would screw up in the first place, but no one's bailing out BankSimple if they do too.
The simplest answer is: if you don't want to bank with us, then don't. We don't imagine that we'll replace every bank ever. There are plenty of traditional banks that may be going bust left and right, but hey, you're free to do business with them.
A more complicated answer is that BankSimple will have the backing of established, traditional financial entities who are fully FDIC insured from the get-go, so the risk to you as a customer is quite low.
There's no such thing as banking without risk, but I understand why you feel drawn to more traditional financial institutions. They certainly do a good job of marketing themselves as stable and dependable.
IMO, the response was right on the money (no pun intended).
My first thought when I read maxklein's comment was that he is perhaps saying it half in jest. But in case he was serious, I don't think one can just deride a person/organization based on stereotypes. (Hey you programmer of some web application, what do you know about banking, where's your suit and your MBA, you'll do a shoddy job for sure ... etc)
Let's see what they come up with and critique/praise them on what they actually do, rather than carrying prejudices.
Being sarcastic or dismissive of concerns isn't the way to deal with that type of criticism which was my point. Not that maxkleins criticism was valid or well based that said however, saying "yeah look how the existing banks" have done doesn't tell us anything about how you plan to better that and doesn't really say much at all since for the most part and most of the time the traditional banks do really well.
He didn't actually give any information on what their plan entails that would remove doubts. They've said their money comes from two places loans and cuts from credit card fees. While what if they have a bad run with their loans/investments(like big banker banks) or not enough people use there credit cards? That makes them just as vulnerable as the existing banks so saying existing banks don't work doesn't tell us why you will.
I take your point that Alex's tone was sarcastic and may be he could have avoided it. But, hey if someone dismissed me as being less dependable etc, just because I am a programmer (or anything else for that matter), I might also lose my politeness for a minute.
Yeah, I would also be eager to see more information on their plans. I hope they would start talking more about them on their blog. I am sure they could get some good inputs if they can get a good community going. (It could be one place where his programming/OSS experience might come in handy.)
Do you work for them or have insider knowledge of what they intend to invest in? You've mentioned this a few times but I've yet to see a response. If you do than what is it they plan to invest in/what kind of loans are they going to be offering to make up for the interest they will be paying out?
That's highly worrying. My understanding is that FDIC is a guarantee of last resort - i.e. a guarantee that ultimately a customer cannot lose his/her money.
i.e. there is no risk.
So are you saying there is no risk - or that there is some added risk to banking with yourself? I'm confused.
If you are trying to differentiate yourself from other banks, I would stop referring to your users as "customers". CUs call them "members". I have always preferred "comrades".
I'm honestly really surprised at the reaction this has gotten out of some people on HN.
Banksimple is only trying to achieve what no other bank thus far has, which is to be genuinely liked by its customers.
Everyone seems to be incredibly worried about the dependability of these guys, yet I don't really see what's so 'dangerous' about this situation. All the deposits are FDIC insured, they clearly have their model laid out; interest margins (and interchange fees) have kept banks running for years, and those are banks with likely 50% more operational costs due to running actual branches.
It's obvious that opening this sort of bank and not selling high-interest rate loans and not charging fees for everything isn't as profitable as it could be if they did, but is it that far fetched that these guys will gladly make less money, but in exchange offer you service that you can actually enjoy?
Zappos could easily save millions every year by shipping UPS ground for everyone, charging for shipping and cutting back on it's customer service, but then it wouldn't be zappos. I, for one, am entirely happy to see a bank that actually took the time to speak with me personally, and offer a banking experience completely unlike what I've had to deal with as long as I have been banking.
but that's worked out SO well over the last oh, year or so.
The grave old men in suits I mean.
You know, the ones who weren't actually able to stay in business and the ones who didn't go under were acquired by another bank that totally and utterly screwed you. Or your bank was simply shut down by the FDIC.
It's time for new thinking - FDIC insurance will protect you up to, I believe, $250,000 now.
Why do you care about any of that? The vast, vast majority of people don't lend their money to "the bank," they lend it to the government. If your deposits are FDIC-insured, you don't lose them, regardless of what your banker wears or where his offices are.
If these guys can beat the big banks on overhead and usability, they'll do extremely well.
Yes I want my bank to be dependable but you don't have any real point why online only bank can not be dependable?
Before Amazon came along people probably thought that retailing can be done only in physical stores but it changed.
Another example is Netflix over Blockbuster. I think its time for online only bank. I don't remember visiting my bank ever after opening my account with them. We definitely need ATMs but not banking centers.
Seriously. USAA may be a very stogy institution in general, but their banking arm has been on an absolute roll the last couple of years. Between their iPhone app, a great web site, and excellent customer service, they're setting the benchmark for online banking. And, by catering to service members who are literally strewn across the globe, they "get" remote banking.
Oh yes, because the banks seem so dependable right now. Good thing they're such experts at handling obscenely large amounts of money. I mean, it's not like we're funding them with our tax dollars or anything...
My mother-in-law thinks that shopping online is crazy because she thinks people can steal her credit card number from over the wires too easily and because you don't know if you're using a "real" shop.
She is correct. It is a real skill to be able to detect the dodgy websites from the real ones. There are lots of fake ebays out there as well. Sure, you and I can tell from the domain name, lack of SSL cert, spelling mistakes, or such, but so many people can not.
Your mother in law sounds smart enough to realise that she can not tell the difference. A rare commodity these days.
Trusting guarantees is a day-to-day part of life. The majority of people have no idea how a bank works but they still use them! The same argument goes for e-commerce. People should trust their credit agreements and ability to judge situations.
If everyone were as "smart" as you say by refusing to interact with processes they don't understand, e-commerce would be dead in the water. It's not thriving thanks to the <1% of us who know how it works in detail :-)
my mother is exactly the same. she thinks that doing anything online is inherently risky. I try to explain that when shes uses to pay for stuff in a shop, or over the phone, her credit card details are being transmitted over the internet too, but she wont listen.
There _are_ risks with shopping from your PC. Largely from key-stroke recorders. However, the 2 times I've been victim of fraud were both from card-skimming in a physical store.
The current lot of banks seem really dependable, given recent financial history.
Perhaps a bank which is based on customer service (in the age of the internet) and being up-front about their policies and how they will invest your money and reduce your risk is actually what we need. Even if it is co-founded by someone called al3x.
I've wanted to do something very much like this in a future startup. Banking does suck.
Unfortunately, it's debatable how much of banks' suckiness is avoidable. Retail banking is caught in a vice-grip between fierce competition for low margins and government regulations. For example, from what I understand you pretty much have to run mainframes with certain antiquated, government-approved software to process stuff through ACH. KYC rules prevent extremely efficient account openings. Etc, etc.
For my American friends: all "checking" in the UK is free. All ATM use for normal ATMs (those you find at banks, not the shady ones at the convenience store) are free, even if that bank isn't yours.
This is obviously only a day-to-day thing, but I think most people have expressed feelings of ambivalence about banking in the comments here: it's somewhere to store money. In the general case, the UK banks do that better.
I do not have any experience with anything advanced like mortgages or loans.
Also bank transfers, direct debits (Paying bills automatically) etc, online banking, are all free and work really pretty well. Typically a bank transfer will be in the recipients account within a few hours if it's to a different bank, or within less than that if it's the same bank.
I'm interested in some examples of the differences. One thing that struck me when I lived in Japan was how easy it was to set up automatic payment of things like rent and utilities and I thought, wow the US needs these things (I also thought it was cool how I could deposit cash and the atm would count it and update my passbook and how there were signs saying please don't take out more than 100 bills at a time) but all that is here now and I find US banking rather non-sucking overall.
Well, we must be living in a different UK then. I would be actually willing to pay a monthly fee for a bank account at a bank that has a call centre with staff who actually speak English.
Try an American bank some time (I had a British bank account for much of the 27 years I lived there, and have had various US banks for the past 6 years). Of course there's always room for improvement, but if you haven't tried banks in both countries, you really don't know how good you have it in the UK.
Barclays is pretty good, but all the in branch staff are good.
All call centers suck, and all telephone support sucks IMHO.
I certainly wouldn't pay extra just to get telephone support. How often do you need it? If you need it a lot, then that's a really really niche use case.
It may be due to the Barclays online banking being pretty solid. HSBC is also fairly good.
Well, it's not really when I call them (I don't call them, I either try to sort out stuff online or if I can't, I just walk into a branch) - it's when they call me. Like when someone is fraudulently trying to use my card details (happens every now and then). It is really annoying when you need to discuss urgent and important matters and you simply don't understand what they're saying.
My bank, one of the 3 biggest in the country, has offered me nothing but excellent phone support. Quick to pick up the phone, knowledgeable staff, and quick and correct answers to my problems. So obviously quality phone support is far from impossible.
UK Banks, hahaha. Don't make me laugh. While it is great to have a bank that actually pays interest, they have only just started to move away from signatures for all transactions, and towards pins.
Plus, they have required huge bailouts as well, I think the RBS is now 70% owned by the government.
Australian banks are actually ones that have come out very well, limiting there exposure to toxic assets, no gov bailouts. Of course, Australia has maintained a very strong economy so far.
>UK Banks, hahaha. Don't make me laugh. While it is great to have a bank that actually pays interest, they have only just started to move away from signatures for all transactions, and towards pins
UK has been chip+pin for some years now. Most places won't accept non-chip cards any more.
Also the story with banks isn't the same all over. For example, Barclays, one of the biggest banks in the UK accepted no government bailout, and continues to post big profits.
The amount of banking suckage is very dependent on what country you live and bank in (I say this from experience of living in the UK and the US). I'd be really interested to know how much of the variance is due to local laws, and how much is just "this is the way we've always done things here".
Of the value props he describes, the only one that remotely resonates with me is: "A bank that puts your money to work automatically."
He writes that nobody LOVES their bank. But does anybody really HATE their bank? Maybe some vocal folks, but a bank to me is a utility-- a hole in the wall where I stick my money. I've never felt gouged by fees (when I was young and stupid, I've been annoyed by overdraft fees, but they seem justified). I've never been overwhelmingly frustrated by the design decisions of my bank. They decidedly don't treat me like crap. Every time I've needed to interact with my bank(s) it's been a pleasant experience.
Given the switching cost/inconvenience, I think this is going to be a hard sell for most people.
Have you tried to pay a friend an amount of money that would be inconvenient to do in cash? The best way to do it through your bank is to have them chop down trees into paper checks, physically mail them to you (this takes a few days), have you scribble down a number on the paper, hand (or mail... wait a few more days) the check over to your friend, who feeds it into an ATM, which scans the number you scribbled down, then you wait a few more days and eventually a few bytes in your bank's servers change to reflect your intended payment.
The last time I tried to make that entire process electronic-only, Bank of America said I needed to know my friend's account number and routing number, and even then they wanted me to show up to a bank branch in person to complete the deposit.
Sure, you could use Paypal, but it's an additional layer of complexity and risk, and if you're not careful they'll skim 3% off the top of your transaction.
Let's see... what else? Debit and credit cards. I live within my means. I don't want credit. I pay off my balance in full every month. Other than a hypothetical emergency, I would have no use for a credit card... except consumer protections for credit cards are much stronger than for debit cards. I'd be a fool to use my debit card instead of my credit card. And even though I've paid my credit card balance off in full every month for years, the one time I slipped by 3 days, I got slapped with a $30 late fee on a $200 balance (180% APR!).
Speaking of debit/credit cards... I visit my family in Mexico 3-4 times a year. Every time I go, I have to make sure to call Bank of America twice, to let both their credit card and debit card departments know that I'll be traveling. I'll have to wait on hold an average ~30minutes each time I call. If I forget to do this, and I try to use my credit or debit card while in Mexico, my cards will get frozen due to "suspicious activity", again necessitating a call to Bank of America. I do appreciate that they're looking after my financial safety, but I really do travel to Mexico quite frequently. There's nothing anomalous about my using my cards while I'm there. Once I do call they're incredibly helpful, but it's annoying that I have to call at all.
And don't even get me started on the fees and shitty exchange rates for using your card outside of the US...
Banking in America really is broken. If they're as good as they say they will be, I look forward to giving BankSimple my business.
You need to use credit cards for the rewards too. Credit card rewards eat a couple % of the merchants' profits, which they pass along to all customers in the form of higher prices. Therefore people who pay by other methods are effectively subsidizing the frequent flier miles and Red Lobster gift cards of those who use credit.
He writes that nobody LOVES their bank. But does anybody really HATE their bank?
I did love the bank I used in the UK (Lloyds-TSB - they gave me an indefinite interest-free 2000 UKP overdraft when I was a student, and have never charged me any fees that I can remember). Conversely, I hate every American bank I've had to do business with (WaMu/Chase and BofA so far).
I hated my bank (BofA) enough to close my accounts and move everything to a local Credit Union. CU's are far better, IMO, than banks; and their rates are generally lower across the board (credit cards, CD's, savings, auto loans).
I've been banking with a regional bank for years, and while I suppose love is too strong a word for my relationship with them, I would gladly use the words trust, respect, and appreciate.
Of course, even they apparently had a little too much subprime exposure, and were bought up by a larger bank last year, to be fully integrated this summer. If the customer experience goes away with the old name, I'll consider Al3x's new project, but that's the only way.
Agreed. I've been doing my banking through a small, local bank since I had my first account many moons ago. I don't pay fees for normal banking activities, and have always had good experiences when dealing with the bank employees face-to-face. I don't LOVE my bank, but do I need to LOVE my bank? I'm not sure...I need to be able to trust them.
I hate most banks. I put up with my current one. I don't know -- this is an area that could stand some innovation. Whether the old guard will stand for it: that's another question.
I was just as dubious about what could really be done until I talked to the guys who are now my co-founders. There's actually a ton of good stuff that can be done, today, in the current regulatory environment. The future looks good.
Guys guys guys, great idea, I applaud your efforts but...
More than once I'll be typing banksimple and hitting ctrl+enter so I'll go right to a phisher's page ready to empty my bank account as soon as I type my id/pass.
How would one go about stopping that? Does phishing break the social contract that allows people to keep their rightfully-squatted domains? As in, when someone's using their domain for phishing of your site, will ICANN take their domain away since they're abusing the privilege of having that domain?
We've had the bank discussion here before, and some of it seems to come down to the fact that banks are required to do a lot of regulatory stuff that is not 'simple'.
I work for a bank (not from USA though) and what I see as the toughest barrier in initiating a Bank is the massive amount of banking regulation that every institution must comply (not negotiable). Also the impact of new regulations on the systems running the business are usually non trivial. Missing any of these, means that you cant operate (or you can't do certain operations, generally critical).
As I said, the effort put in keeping with all this is very big. Usually the split is 50/50 with regulation vs new features (my view is as a software developer). The bank being global only makes things worse, as only adds more regulations from different places to equation.
Well that was the boring part. I think theres a place for new financial services but perhaps the way to get started is providing those new services and avoiding being a bank. As the institution adds more services and grows, it can begin to take into account the regulation little by little. That was my simplistic view ;)
I'd be curious if incorporating outside the U.S. is the best option for them here to avoid the regulation. Or going on a SeaStead :) They'd still need relationships with Visa and Mastercard though.
This is going to be interesting. Sucky banking services are largely an American phenomenon.
My bank in Norway has no physical offices and conducts all of its services over the internet, phone or mail. There are (practically) no fees and the interest rates on its savings/checking accounts (there are interchangable, since there are no fees) are within 0.2% p.a. from the best that can be obtained anywhere in the country, regardless of capital amount. All funds are insured from bankruptcy through the national bank security fund. The young crowd almost never uses checks in Norway - all bills are paid online. The only problem with this system is speed and service - if you suddenly lose your credit/debit card, you will have a few days of worry while the bank sends you a new one. Identification can be complicated, since there isn't a person 15 minutes away that can physically talk to you and verify your identity.
All in all, I think this is very promising. Someone needs to pull American banking into the 21st century. This guy will have problems with legislation and bureucracy and huge competitors, though..count on that.
All of these bad gateways I'm getting from nginx don't give me a whole lot of confidence in this banking website =P I know it's early, but perceptions like that matter.
I have worked in the banking industry. Building a better technology stack for a bank is possible. But you need to understand the current technology first, including how it got to where it is today.
You also need to understand the banking industry.
And you need to be focused on reliability. Twitter's reliability history is not adequate for a bank.
So do I think he can do this by himself? Not a flippin' chance. But I do think he could contribute some innovative ideas, if teamed up with people who have deep experience in the industry.
There is no such think as a bank that doesn't suck. If there are, they are called credit unions. For profit banks have customers. Non-profit credit unions have members.
This is at least the second long time Twitterer to found a new business related to finance or payments (the other was Jack Dorsey's Square). I guess they're in a position to perceive a high level need in that area? Pushing money around gives you a lot more chance for revenue than dealing with mere tweets, I suppose.
A bank that wants to do things differently and be known for customer service should conspicuously publish their privacy policy and reveal their network of partner banks.
It's not clear what happens with the statistics of your bank usage nor where your money actually is.
Is this version 2 of Mint with banking 'features'?
I wonder if his new company will do everything in Scala. If I were starting a company and writing the corporate stack from scratch, Scala would be a good possible choice. He has written a fair amount about Scala, so I am just wondering...
It's not just a pretty interface to Bank of America or anything like that. But they aren't a normal bank with a charter and millions of dollars put up in bonds to allow them to operate legally. They haven't gone into detail about exactly how everything works, but they have a "network of banks" where the money will be stored (which is how they get it FDIC insured), and they sit on top of that in some way.
>When we first started thinking about starting a bank we looked into the de novo banking process. This is the process by which new banks are formed from scratch. This is both expensive and, more importantly, it takes too long to launch. It is near impossible to innovate with an imposed three year launch delay. The best way to serve your needs is to launch quickly and to adapt our offering to meet your individual needs. Modern technology lets us do that. To achieve this we are planning to launch with a special corporate structure. We are bringing together a group of financial institutions to provide our underlying banking services. Our partner banks hold all deposits in insured accounts.
USAA Banking and Investing isn't accessible to most of the public, and is locked down as to be almost indistinguishable from other credit-unions for their non-veteran, non-military customers.
My closest military connection is a grandfather who served in the Air Force in WWII and I was able to get into USAA. I think it's more accessible than a lot of people think.
And if you can get in, it's definitely worth it. I've used them for several years now and have zero complaints. Their customer service is awesome, their website is very good, and the iPhone/Android apps are great.
From their about faq page:
How do I deposit checks?
Take a photo of the check with your smart phone and send it to us with our app. Pretty simple, right?
Is this really secure? I know there are some people doing cardreaders as an attachment to the phone, but pictures of checks?
USAA lets you deposit scanned check images. The only requirement is that you have to have a credit card setup as overdraft protection. Decent photos seem like they'd work ok.
So do you think we'll move away from paper checks completely and just move around echecks from phone to phone? I've never really understood how checks are secure. They just have a routing number, an account number, and your signature right?
Cheques are earth-shatteringly non-secure. The entire system runs on trust. I've had a several-months-post-dated cheque I wrote cashed by a bank and accepted by mine without apparently as much as a look at the date field. (They also dinged me an overdraft fee. Reversed that when I complained, but not the cheque withdrawal itself.) A while back, there was a pretty loud story about an payday-advance business suing the maker of a subsequently cancelled cheque for the money and winning the amount.
The sooner North America weans itself off cheques and external for-profit inter-bank transfer systems (Paypal, grrr), the better off we'll be.
Yes. The technical requirements for a piece of commercial paper---sometimes called a "negotiable instrument," or a check---are that it be a writing, payable to the order of someone specific or simply the bearer, that it be signed by the maker or drawer, that it be for a sum certain, that it be unconditional, that it be payable on demand, and that it be payable in currency.
Technically, you can make a valid check out of a napkin with a Sharpie.
There's no reason it can't be if the app is well-implemented (though this is a big if). I suppose it opens up a concern about phone malware, but with checks that's pretty much the least of your problems. It's not like they're terribly secure to begin with.
I just don't think that the "fee" play is going to cut it as innovative. Others have mentioned ING Direct and Ally.
The real innovation will be cutting out things like the 3 day "clearing" window for funds. Or eliminating the delay for ACH'ing funds (an all electronic transaction).
The problem, banking is too regulated to really innovate, though I applaud the attempt.
Edit: If they create an iPhone app for depositing checks (Just like USAA). I am sold. I would also like to think that many tech-savvy people would be sold also.
I currently use Charles Schwab Bank, and don't really see how SimpleBank would be a big improvement. The only feature that SimpleBank has that Charles Schwab Bank doesn't seems to be the ability to take pictures of checks and send those electronically when you want to make a deposit.
Is "al3x" from twitter really up on all the details and security concerns of running an online bank? Will his company do a better job than Charles Schwab? My gut feeling is no.
I did look at the bank website and at the team before I posted .
As I mentioned, the features of SimpleBank do not appear to be much different from what is available from my current internet bank. As far as the team goes, they may be bright, but none appear to have worked at a bank before, either brick and mortar or digital.
I'm not sure that one guy who "specializes in strategy consulting for financial institutions" make me feel all that much more confident. Are there more members of the team missing from their "Team" page?
Starting a bank from scratch is not impossible but will certainly be no easy feat. I wish Alex Payne and the team he is going to be working with good luck in cracking existing banking structures.
I suspect that not charging overdraft fees will result in adverse selection-people that have no money and therefore can't be used to build a loanable savings asset.
I really hope this works, but due to switching costs, BankSimple will have a very uphill road to climb if they aren't planning to pay very high interest rates or otherwise attract people with some savings.
If they wanted to be truly innovative, they could kick-start anonymous internet banking by being the first institution with a public face to do so. That would be revolutionary, and whilst I admire the aim of making a fantastic bank, it still leaves me feeling a bit unexcited :-/
It would be cool if bills appeared in an inbox on your online bank account so you could review and pay it in one click. Also, you would have the full details of what you bought in the history of your account.
Also a graph and projection of your bank balance would be neat.
Exactly what I am thinking. There is so much inefficiency involved when dealing with money and in fact much of bureaucracy.
My bank offers the same "services" now for almost ten years. It always feels like the 90s all over again when I have to manually handle csv files. I don't even want to talk about advanced stuff like processing of invoices. I don't care enough about it to really have some script scraping it for me automatically and the lack of an API does contribute to that.
There is so much overhead to all of this it's unbelievable.
It would be cool if bills appeared in an inbox on your online bank account so you could review and pay it in one click
A lot of banks have some sort of bill pay feature. I have a feature that is exactly like this in my Schwab account including being able to view the bills to see what's on them and pay in one click.
My Banks have sort of a bill pay feature though it's not like I described, it's just a pre-populated list of payees like Electric, Gas, Water etc. companies and it's not even that simple because each company often has several accounts so you have to pick the correct one.
Sounds pretty cool in theory. But can a new bank like this really make it in today's over-regulated, Wall Street controlled market? Don't get me wrong, I'd love to see it go somewhere and be available nationwide for people to have a better banking experience. I'm just a bit skeptic.
I kind of wondered if this was coming, due to the very specific nature of Twitter's job postings as of a few months back that kind of treaded on al3x's turf.
Best of luck to him. Also, I think I want in. On being a customer, not an employee. I just got my dream job.
Imagine, for a moment, a bank that doesn’t suck...
A bank that display funny pics when system goes down...
The money in your account is eventually consistent...
A bank allow users to type command to transfer money, e.g. "accept $1000"...
> A bank that puts your money to work automatically.
This sounds interesting. I don't know how they'll succeed at this while making money, keeping risk low, and beating the rates that something like Ally Bank will give you.
I don't want a bank started by a guy called al3x, and who just left twitter. It sounds innovative, but it doesn't sound...dependable.
And if there is one feature I want my bank to have, it's dependable.