
BankSimple: A Bank That Doesn't Suck - ssclafani
http://www.fastcompany.com/magazine/157/banksimple-josh-reich-shamir-karkal
======
MatthewPhillips
Who is Fast Company serving with this article? So the PR firm BankSimple hired
pitched an article; fine. Declaring that a product that hasn't even launched
to anyone outside of family "doesn't suck" is irresponsible reporting. "Aims
to not suck" is accurate. There's nothing in this article to indicate that the
writer has been using the service (just perhaps seen the interface). I'm as
excited about BankSimple launching as anyone else but these type of articles
rub me the wrong way.

~~~
tptacek
Who does Fast Company ever serve with an article? The charter of Fast Company
is to identify what the cool kids are talking about, digest it, and
regurgitate it for the kinds of people who use magazines like Fast Company to
keep up with trends.

With a few notable exceptions this is how all print tech journalism works.

I think you're looking for a semiotic value to Fast Company stories that
doesn't really exist. They aren't getting written up because something
important is happening. They're getting written up because people have been
talking about them. That is probably literally the only element of
newsworthiness underpinning the story.

~~~
smikhanov
I never heard of BankSimple anywhere except for the HN and al3x's Twitter
which I happen to follow (and I read lots of technical news). There were maybe
couple of mentions on TC. BankSimple is not Foursquare or Facebook, I
seriously doubt anyone, leave alone cool kids, _talks_ about it.

So, yeah, it apparently was just a pitch from the PR firm.

~~~
ghotli
Eh, I for one have been talking about it. I hate banks and bank apps and
things that only work with mint some of the time. If they solve this problem
I'll be a happy man and I'll tell everyone I know. I don't care if this is
just self serving PR. Here's hoping I'm pleased with the product and that they
get the hype / exposure needed to become profitable.

~~~
EwanG
You might want to try USAA's bank rather than waiting around then. They have
had an option to deposit a check with your iPhone for almost two years (out
much before Chase had theirs), have consistently scored high in customer
satisfaction, and have been mentioned in several places as having some of the
lowest fees around. FWIW...

~~~
Goronmon
Except their mobile deposit option requires you to be a member of the military
or a qualifying family member, so for the general population, the feature
might as well not exist.

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zheng
Tangent to the article, but what I really want is a bank that allows me to do
funds transfers immediately. I understand they make a lot of money off of the
floating period, but there's got to be a way to place some other kind of
restriction on me so that I can transfer funds quickly. Or, just find a bank
that offers both a checking account and a high interest rate...

~~~
nicksergeant
FWIW, USAA does fund transfer immediately, at least perceptively. When I
transfer from a BoA account to USAA, funds are available within 10 minutes
(close enough to "immediate" for me).

USAA also does interest on checking accounts, debit-card-as-credit points, and
ATM fee kickbacks.

~~~
dkokelley
I've noticed that while funds show as arrived/available in USAA, the
originating account stills shows the funds available as well. This tells me it
might be a convenience offered by USAA, even if the transaction hasn't
processed yet. This is similar to cashing a check that the bank hasn't
collected from yet. They take your good standing with them into account, and
give you the money.

~~~
chris11
That's what they do with deposit@home. I don't think USAA cashes the checks
immediately when you cash your checks online. That's why they require you to
have a line of credit with them. When you cash a check they give you an
interest free loan for the amount of the check. When the check clears the loan
is paid off. And if the check doesn't clear they have the ability to take the
money out of the account, or they actually give you a loan to cover the check
if you have drained your acccounts.

~~~
nroach
I use deposit@home and have no formal line of credit with USAA. It may be
something they're doing internally, but my only products with them are debit
accounts. (My credit and insurance is done elsewhere due to non-competitive
rates charged by USAA).

~~~
chris11
Yeah, I think its done internally, but according to the requirements you need
to have either an active property insurance or an active line of credit, and
you need to be qualified for both. So I don't know what's going on there. But
I have noticed some of the bank's rates are not competitive.
<https://www.usaa.com/inet/pages/bank_deposit>

~~~
stevoyoung
You basically have to be P&C eligible to use deposit @ mobile / home. To be
P&C eligible you need to be military or spouse / child of military.

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dkl
ING and USAA are two really good banks that have no physical presence. I use
both of them. USAA has mobile deposit of checks, too. I can't see how
BankSimple can beat them, but maybe they can.

~~~
pitdesi
Of note: ING direct was sold to Capital One last week. Capital One has til now
addressed an entirely different demographic, so it'll be interesting to see if
there are changes...

USAA is good, but it's interface doesn't compare to what BankSimple is shown
so far.

And many banks have mobile deposit of checks... PNC, Schwab, Chase, State Farm
etc.

I personally really like Schwab bank.

Edit to reflect that USAA banking is now open to all

~~~
billpaetzke
_ING direct was sold to Capital One last week._

Wow. That's the first I heard of the news. A quick Google News search shows
many ING customers (like myself) are upset.

This could be a boon for BankSimple. If Capital One botches the ING experience
over the next two years, I'll definitely defect to BankSimple (assuming it's
comparable).

~~~
skrebbel
You're only mad because you don't know anything about the company that used to
own ING Direct (a Dutch bank called ING, currently heavily state supported
because of over the top cowboy banking).

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HoyaSaxa
I really do think there is a great opportunity for a better bank! However, I
think BankSimple is making a big mistake by not becoming a real bank, and
instead acting as a front end interface. BankSimple claims that all accounts
will be FDIC insured "at launch." However, from what I am gathering, it will
be impossible to keep these accounts FDIC insured in the long term especially
since the company claims it will be transferring money around from bank to
bank in order to acquire the best rates. Really? Banks are going to be open to
opening a new account for every new customer (which is what would have to
happen in order to be FDIC insured)? I am skeptical. Also, a big concern of
mine is the claim they will move money between savings and checking
automatically for you. Recent legislation prohibits more than 6 electronic
transfers from the savings to checking accounts in a month. So if a computer
is pushing your money around; you might be out of luck towards the end of the
month when you need some extra cash, but all six of your transfers have
already been used. Also, at the credit union I work at, we charge the normal
returned ACH payment fee if you surpass these 6 charges ($25! yikes!!) and
BankSimple states all fees will be passed onto the consumer. So in actuality,
BankSimple is really just a nice mobile experience that moves money around the
top few banks (which really aren't that great). You still incur the same fees.
Just doesn't seem like a very good business structure to me.

However, I would invest in BankSimple because a big bank would pay big $$$ to
acquire the technology the company is developing. Mobile is the future of
banking and that is what BankSimple recognizes so perfectly. Look for a big
acquisition in the next few years.

~~~
oasisbob
_Recent legislation prohibits more than 6 electronic transfers from the
savings to checking accounts in a month._

IIRC, this is regulation DD, and is quite a traditional rule. On the books,
banks account for savings and checking funds separately, and have separate
capitalization requirements because checking accounts are assumed to be more
liquid.

Under these circumstances, you don't want consumers to treat savings accounts
like checking accounts (which they have an incentive to do, because of
traditionally higher interest rates), so you create a disincentive through
transaction limits.

For BankSimple, this is probably not much of a problem. Reg DD allows for more
than six transactions if you charge a per-transaction fee. Most banks charge a
buck or two (or $25), I'm not sure if there's any regulatory problem with them
dropping the fee to $.01 or $.001

~~~
HoyaSaxa
Regulation D was amended in 2009 to take away the 3 sub-limit that applied
previously increasing it to 6 in all circumstances. But you are correct in
that this is really a traditional rule that has been around for years. It is
definitely becoming more of an issue as more and more people rely on online
transfers and shy away from in-person banking (which is exempt from the rule
as is ATM transfers).

Are you sure about your last point? I have never heard of this, but I wouldn't
be surprised if the bank lawyers found some type of loophole. But just to
clarify the $25 I referenced is a returned ACH fee. The money is never
actually transferred out of savings into checking when this happens.

~~~
oasisbob
Ahhh, you're entirely right, I misremembered. Fees aren't required at all
under Reg D (not Reg DD, damn alphabet soup). The FI does have a
responsibility to monitor excess transactions and prevent non-occasional
violations by either converting the account, or removing transactional
abilities. So yeah, a token fee wouldn't be a viable strategy.

Getting back to the topic at hand though, I don't think this would be much of
a problem for fancy automatic transfers. Deposits to savings accounts aren't
covered transactions, so something like "If I spend less than x budget this
week, send the rest to savings" would work.

If the FI designed a product that would see more frequent withdrawals, they
could just designate it a transactional account and skip the whole issue
entirely. Fits in the spirit and the letter of the law.

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earle
And have been waiting,.. and waiting,... and waiting.... shocked nobody has
come around and beat them at their own game it's been so long...

~~~
kwis
I'd argue that USAA is already trouncing BankSimple.

USAA competes with the same sort of value proposition (convenient banking with
great service, but without a B&M presence), and is a fortune 500 company with
millions of happy customers.

It's hard to find discussion about retail banks on the Internet without
finding satisfied USAA customers telling their stories.

~~~
ISeemToBeAVerb
Yup. I've been a USAA member for about 10 years now and I've never once had an
issue with their service, not to mention that I know I can always get an
actual human on the phone who is happy to help me. As someone who travels
quite a bit, I can't imagine using any other bank.

In the end though, I can't see how having another option in the marketplace
could hurt.

Any company seeking to offer better banking services gets a high five in my
book.

------
michaelcampbell
Sadly, like all computer programs must expand to include email, all banks that
don't suck must eventually get bought by those that do.

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cbailey
I was really impressed with the concept back in January when I tried to get a
beta account. Being a 20-something and born into the tech generation, I would
be comfortable with a bank that didn't have a brick and mortar presence and
used the strategies that BankSimple uses (will use) to get great rates, etc. I
can see how older generations would be very wary of truly online bank. I know
people who were baffled when I told them I would be switching to ING or
another online only bank.

~~~
chris11
I really can't image using a brick and mortar store. I've used USAA all of my
life, so I don't see any need to talk to a banker face to face. My father has
bought several houses through them, and he has been able to do everything over
the phone and at home. Any documents that need to be signed are 1-day fedexed.
And local notaries are paid to come by and notarize docucments. So online
banking is really convenient.

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dreamdu5t
"We’re reinventing personal banking." means absolutely nothing. Marketing
drivel, like when Chase says "Chase what matters." It's meaningless. It's not
simple. It's not direct.

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zacharypinter
Interesting that the article mentioned one of their main revenue sources is
planned to be debit cards.

I use a credit card that I pay off monthly for all my purchases. I chose the
credit card because it has the best rewards I could find (1.5% back for all
purchases, anywhere VISA is accepted).

Would BankSimple not work with that model?

~~~
r00fus
1.5% seems very nice. Who's your bank?

~~~
zacharypinter
My credit card is through Fidelity, here's the link:

[http://personal.fidelity.com/products/checking/content/inves...](http://personal.fidelity.com/products/checking/content/investment_rewards_card.shtml)

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Derbasti
Do they do at least two-factor authentification? Do they accept international
wire transfers? Can they do online wire transfers? Is the transaction history
accessible from some banking software? Do they not send me spam? Can I use
their credit card abroad without a hassle? Does the credit card use the chip
for authentification instead of the insecure magnetic strip? Do they transfer
money instantly without holding back my money for days? Do they have 24/7 and
helpful customer support? Can I call them without negotiating with some
computerized voice for minutes? Can I call them without suffering through
several minutes of elevator music? Can I call them for free? Can I withdraw
money from every/enough ATMs without paying a fee? Can I manage account
details at a bank franchise other than the one where I created it? Do they
have a helpful, easy to use website? Do they have employees that are more than
human computer interfaces and are actually helpful?

Now that would begin to sound like a bank that does not suck indeed...
(Suckage assembled from several countries)

~~~
pennig
I'd hate to see your list of questions posed to a potential mate.

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jarin
All these articles about BankSimple are fine and dandy, but I feel like I've
been waiting for my beta invite for at least a year. Meanwhile, companies like
Dwolla are springing up and poised to pull the rug out from under them.

As long as everything is bulletproof secure, just launch already.

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jason_slack
We don't _actually_ know that they dont suck..they have not launched yet.

I was really hoping to move to a better bank. I am ready and BankSimple still
is not available so I need to go shopping and exclude BankSimple from my list.
I wont switch twice that is for sure..Lost my business.

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lowglow
I think a lot of the ideas that revolve around making things more convenient
for clients have a lot of merit. It's not about gimmicks, but solid business
sense: Convenience drives consumption.

If they truly can make banking simpler for real people then hats off to them.

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famousactress
....aaaaand, didn't read it. Why? Cause I was confronted by a stupid countdown
advert. At least when it's a movie or a tv show I file a "remember to go steal
that" ticket in my brain.. but in the case of a magazine article, I'm
certainly not gonna go torrent the thing. Just stupid.

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meowzero
There's already a bank that doesn't suck: Charles Schwab.

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trebor
Is it just me, or does the article date say "July 22, 2011" when it's _June?_

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Apocryphon
Do they trade in BitCoins?

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samtp
I'm going to be honest: it's hard to trust a bank who's founders look like
people hanging out at my local dive bar. For them to get my money I need a
more professional look from the company. This whole informal startup look only
works for companies that provide non-critical services.

~~~
nickik
I disagree, I think people should dress however they like. If I'm going to
trust them depends on there skill. In a normal bank i feel like I'm not
talking the people im talking to what the were orderd to be.

In IT this works much better, some really good programmers walk around in
suits others walk around well like Stallmen.

~~~
samtp
This appearance works well for the hacker crowd, but do you really think it
helps for people over 40? I seriously doubt it

