Coming soon: simpler banking

by Bruce Kasanoff on July 14, 2011

Think of BankSimple as a banking app unburdened by the bricks and mortar restrictions of an actual bank. That’s not far from the truth. This start-up designed its mobile app first, then started recruiting banks to handle the backend of actually protecting your money.

Their goal is to revolutionize banking, making it simpler, faster and a better fit with the realities of your life. I recently posed a few questions to Adam Erlebacher, who is VP of Product Marketing for the start-up.

Q: After 15 years, my bank’s ATM hasn’t figured out what language I prefer to speak. Will BankSimple do better?

A: When we began looking at how we could improve personal banking, we looked at the entire value chain, from managing treasuries to improving people’s online and mobile banking experience. If we were to have built a bank with the best treasury management group, maybe we’d have been able to squeeze out a few basis points of savings that we could have passed on to customers. That would have been very incremental and it would have meant almost nothing to customers. As technologists, we knew that we could have the greatest impact by focusing on customer experience instead.

Customers want a modern online interface, beautiful mobile apps and great customer service. They are frustrated by bank websites that haven’t improved in ten years. They are skeptical of all the fine print and surprise fees. Our customers would rather deposit a check by taking a picture of it with their mobile app. So that’s what we are building: a modern website, well-designed iPhone, Android, and iPad apps, and fantastic customer service. And our customers will have fee-free access to over 35,000 ATMs – that’s twice as many ATMs as the largest banks in the US. 

Q: Despite language to the contrary, most banks stumble because they have merged with other banks and their systems don’t play nice together. How do you avoid this problem, especially since your approach depends on your banking partners, who may have similar challenges?

A: Over the years, banks have grown mainly through acquisition. That meant buying bank branches, repainting them, and giving everyone at the bank new uniforms. It also meant that the tellers would often need to look at two different systems to serve their original customers alongside the acquiring banks’ customers. This works OK in the branch context, but it doesn’t work online, especially when you’re trying to integrate 1960′s-era mainframes that were never designed for the internet. 

The benefit that BankSimple has is that all of our technology has been built in the last five years. This means we can make things faster and easier. When you use your BankSimple debit card at a merchant, you’ll immediately receive a push notification to your smartphone with the amount and location of your purchase. Since you are able to see where your spending is occurring, this helps eliminate fraud. It also allows our customers to categorize and label their expenses in real-time. We also have a single customer record, so our customer service team knows what BankSimple products you have: no being transferred from one department to the next depending on whether you have a question about your mortgage or your savings account.

Q: What’s BankSimple’s core competency?

A: Because BankSimple is not a bank, we can focus on delighting our customers while leaving banking to bankers. BankSimple controls the customer experience while our bank partners hold our customers’ deposits in FDIC-insured products. That means that when you interact with the BankSimple website or our iPhone app, those applications are built by us. When you call BankSimple customer service, a BankSimple customer service representative answers the phone. We are obsessed with the details and pay attention to every aspect of the customer experience.

Q: Given that many people are still rattled by the recent near-economic disaster, will it be obvious to your customers which bank holds their money? That is, am I going to see “BankSimple” on every communication or “1st National Bank of Cleveland”?

A: We spend a lot of time speaking to potential bank partners. BankSimple partners need to meet three criteria. First, they must allow BankSimple to own the customer relationship. Second, they must share our philosophy. This means offering products that have transparent terms and conditions and no surprise fees. Third, they must be technologically savvy so that they can integrate with the BankSimple platform.

BankSimple owns the customer relationship while customers’ deposits will be held in FDIC-insured products by our bank partners. This means that the financial products we offer will be branded BankSimple and the communications you receive will be from BankSimple, but customers will know what bank is protecting their money.

Q: When are you launching, really?

A: We recently started testing card swipes and our back-end systems among employees. Once we are satisfied that our platform is solid, we will begin rolling BankSimple out to a small group of friends and family. After that we’ll slowly open our doors this year to those who have requested a beta invitation on a first-come, first-served basis.

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