

BankSimple Launches Preview Site - ssclafani
https://www.banksimple.com/

======
jakarta
I'm still trying to nail the business model here.

"BankSimple account plus BankSimple debit card replaces your existing personal
bank account. Make deposits, withdraw cash, pay bills, earn interest, and
more.

However, BankSimple is not a "bank." We partner with chartered banks who
provide FDIC-insured products, leaving us free to concentrate on designing the
complete consumer banking experience, via the web and your smartphone."

From the looks of it, it appears as if Bank Simple is going to be gathering
deposits for the actual banks they partner with. In exchange, those deposits
will be fenced in and administered by Bank Simple via the online and mobile
presence.

The mention of debit cards at first made me think that maybe they would be
able to split fees, so Bank Simple would get a cut of the interchange fees
that occur whenever a debit card is used... but those fees will go away
because of the Durbin Amendment (this is putting the squeeze on every major
bank in the US and will result in an increase in fees for customers -- see
Jamie Dimon's comments at the recent Barclays Conference).

Maybe the partner banks will split some of the interest they make off of the
deposits? Presumably, Bank Simple's value proposition to them would be that
they are providing something that is slightly more than zero cost funding but
less than a CD rate. So they could earn a little bit in that area.

The only thing that is left then, that I could think of, is that Bank Simple
will mainly try to make money by cross-selling products. Bank Simple Brokerage
Accounts. Bank Simple Mutual Funds. Bank Simple Pre-Paid Debit Cards. That
sort of thing, where they'd be able to gain market share. This would work out
pretty well I think.

For reference, the average American uses 16 different financial products, with
about 2 products per bank. A good bank like Wells Fargo boasts a ratio of
5.5-6 products per customer. Your typical bank earns its money on an 80/20
split, where 80% comes from the interest spread (borrow at 3%, lend at 6%, net
3%) and 20% comes from fees (overdraft, interchange, fees for other products).
But a trust bank will have a 60/40 split, where they earn extra fees by
offering wealth management services to the majority of their wealthy
customers.

~~~
chrisgoodrich
from the FAQ (<https://www.banksimple.com/faq/>)

> If you don’t charge hidden fees, how do you make money? We make money from
> two sources: interchange and interest margin. Interest margin is the revenue
> earned from lending, less what they pay on deposits. For example a bank may
> charge a customer 12% to borrow money, but pay 5% interest on a savings
> account. The difference, less any defaults on the loan, is revenue to the
> bank. Interchange is a small revenue source that card issuing banks earn
> whenever that card is used at a store. Typically banks earn less than 1% for
> each time the card is used to make a purchase. These are both great revenue
> streams, but banks got greedy and started charging additional fees to
> bolster their revenue. Without hundreds or thousands of branches, our
> operation is low cost, so we don’t need to rely on extraneous fee revenue.

~~~
howardlothrop
Average net interest margin for Q3 2010 is 3.75% per FDIC.
<http://www2.fdic.gov/qbp/2010sep/qbp.pdf>

<http://www.echopartners.com>

------
Lewisham
I'd pay for Mint + Bank in a single package. It looks great. However, it's
hard not to be a little disconcerted when the "meet the team" bit doesn't have
a single person who has any sort of financial title like "accounts manager" or
anything. It's just a group of devs. That doesn't scream "we know finances" it
screams "we know how to make web apps, hope you trust us with money too... it
can't be that hard, right?"

Mint got away with this by simply being a front-end, and never touching your
money. BankSimple should try a little harder to prove that it's not just a
company that can identify why banks suck (not all that hard, really), but a
company that can actually be relied upon to safely handle your money.

* I know that BankSimple are putting all your money into an FDIC bank, but as the intermediary and the company you are doing business with, the buck stops with them (pun somewhat intended)

~~~
i2pi
Hi. I'm Josh, the CEO. You can read more about our growing team on the /team/
page, but in summary, I have an MBA in Finance and Accounting, and worked with
a multi-billion dollar investment portfolio. Shamir, our CFO (aka 'account
manager'), spent the last few years doing banking and payments consulting for
McKinsey.

In addition to our core team, we have multiple payments systems consultants,
banking lawyers and former regulators working with and advising us. We are
also actively growing our compliance and regulatory teams. The jobs aren't
posted on the site, because that's not the best way to hire for those roles.

Not that any of that is really worth much. Innovation comes from the outside.
A lot of the pain in banking stems from atrocious technology, so we're making
better tech to drive a better experience.

~~~
Lewisham
Hi Josh, This all sounds great. It's exactly the sort of things I think you
should consider you putting next to those portraits or on the Team page. I
know you guys have all the technical chops, and as a potential customer, I
wanted you to show me you knew what you were doing eyes wide open. Just a
throwaway line "Plus an army of payment systems, banking lawyers and
regulators ensuring the safety and security of your money" would make a
_world_ of difference.

~~~
i2pi
Point well taken. Thanks!

------
rms
In the meanwhile, I've been very happy with Charles Schwab's checking account.
Free as in beer, you're allowed to overdraft with no overdraft fees, free ATM
fees at all ATMs (including international!)

~~~
ndaiger
Yeah, me too. And when I've called customer service, it has always been
fantastic. I've never felt like the rep has just been reading a script.

~~~
masterj
I just opened a checking account with Schwab (and the requisite brokerage
account that goes along with it). As I was registering the account online, the
web system threw an error, and I couldn't finish.

The next day I got a voicemail from one of their operators inquiring about my
account with a number to call him back. The number went straight to him, and
my account was straightened out in a few minutes. They also sent me checks,
something I had never bothered paying for with my account at Chase.

And I haven't even put any money in the account yet. So far I'm very
impressed.

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spolsky
I'm wondering how they got around the state banking laws requiring them to be
a chartered bank if they want to use the word "Bank" in their name (for
example, in New York, Banking Law Section 132). All the confusion in this
forum as to whether they are actually a "bank" makes me think they may not yet
have heard of these laws...

~~~
i2pi
We have certainly heard of that law and similar rulings and are in fairly
regular contact with the regulators.

BankSimple is the name of our product, our company is Simple Finance
Technology Corp. (rolls off the tongue...) There is plenty of precedent for
our situation - not being a chartered bank but having 'bank' in our product
name and URL. BankFreedom, BankRate, FindABetterBank, etc. Not comparable
businesses, but face similar issues.

IANAL, but, by god, we pay them handsomely to deal with this and many other
banking issues.

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Qz
The signup form doesn't work if you use autocomplete to enter your name and
email address. Had to delete random letters and retype them to get the button
to light up.

~~~
jsdalton
Yeah, they are probably using the javascript change event to trigger the
enabling of that submit button. Unfortunately, most autocomplete functions
don't trigger the change event.

It's a real pain; you end up having to poll the form fields for changes and
then trigger the change event manually.

~~~
oomkiller
I always add autocomplete="off" to my inputs, cuts down on this type of thing.

~~~
Qz
That would just annoy me more, I use autocomplete wherever and whenever -- any
site that doesn't let me autocomplete something that should be autocomplete-
able always gets on my nerves.

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nathanwdavis
It's unclear what Bank Simple actually is. Hopefully (for their sake) it will
be clear when they launch.

~~~
abp
Doesn't <https://www.banksimple.com/faq/> help?

~~~
nathanwdavis
I didn't see a link to the FAQ anywhere. I see now it is a small link at the
very bottom.

Regardless, I still don't see what the great value proposition is other than
that they are friendly. My bank (a small local bank) has never charged me a
overdraft fee, never had to wait more than a minute, and I can only remember
one time that I paid an ATM fee. I must have just been lucky enough to get one
of the non-evil banks.

~~~
Q6T46nT668w6i3m
Hi, I’m Allen. I’m an employee at BankSimple.

We think that’s great.

In the past, we’ve shown animosity toward __banks __without too much
distinction. In retrospect, this might’ve been a mistake. Hopefully, we’re a
refuge for resentful and puzzled customers of a certain subset of national
banks rather than a competitor to a non-profit credit union. We wholly realize
the necessary and worthy function that credits unions fulfill that neither we
nor any national bank could accomplish. While we realize we might not be the
right fit for some customers, we believe we’ll be a worthwhile alternative for
many others.

Lastly, I’ve personally spent a significant amount of time thinking about ways
in which BankSimple and other financial service startups could further bolster
credit union adoption and satisfaction to better pursue their mission (e.g.
opening financial research to nonprofits and academics or technology sharing).
I’d love to hear from anyone who has thoughts on this.

~~~
blasdel
It's a bit hasty to read that into his comment and break out the copypasta
keyed under "credit unions"

There's plenty of small local banks that are non-evil, at least until they get
swallowed up by progressively more dastardly banks in a long chain of semi-
annual M&A transactions.

------
callmeed
My email has a . before the @ and was deemed invalid ...

~~~
city41
You mean like foo.bar@mail.com? Mine does too (most gmail addys do), and it
worked. It did say my email address was invalid, but focusing and unfocusing
the textbox fixed it. I don't think it's an issue with the email format, just
the form is buggy.

~~~
scotje
Unless it has changed recently, Gmail ignores the dots anyway. So if you find
a form that wont validate your john.smith@gmail.com, you can use
johnsmith@gmail.com and still receive it.

------
simonista
Good work guys. A few text/spelling errors you might want to fix. On the
careers page after clicking for more detail in the "smart and talented?"
section, there are about 5 places where two words are getting smushed
together. Maybe a line break problem or something. And then in the thank you
email after signing up, the first line, "thank you requesting ..." should be
"thank you for requesting ..."

~~~
tobysterrett
Thanks, good catches. I just fixed the email text, and the job listing should
be getting fixed soon as well.

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jond2062
This bank "overlay" concept appears to be very similar to what SmartyPig
(<http://www.smartypig.com>) has been doing for a couple years. The revenue
model is slightly different (SmartyPig partners with retailers to offer cash
back bonuses to customers if they convert their savings goal into a retailer
gift card or load it on to the SmartyPig Cash Rewards Card), but the general
model of leveraging existing banks for client deposits is the same. I will be
interested to see how competitive BankSimple's interest rates are and if they
can differentiate themselves in a meaningful way from the many great online
banks that already exist (INGDirect, Ally, etc.).

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Andrenid
I'm very excited to see how this pans out. Even though i'm not a country
they're going to support, if they do well it will set a good precedent and
maybe we can finally see banking stirred up a bit. Banks are my most hated
companies as a whole.

~~~
Dramatize
What countries will they support?

~~~
abp
The US.

 _For the time being, we are concentrating on the US market. Banking
regulation and service levels vary widely around the world. After we launch in
the US, we may look at international expansion._

~~~
HectorRamos
Here's hoping that it works in Puerto Rico.

I'm sure BankSimple trusts Banco Popular :)

------
yummyfajitas
I'm just curious - what exactly is banksimple selling? Just regular banking +
better UI?

~~~
dschobel
The same way Zappos just sells shoes?

A nice UI, efficient operations and customer service which doesn't actively
hate you can make a pretty compelling value proposition.

~~~
phlux
True, but we all have such a sour taste from our experience with all banks
that we are rightly a little squeamish to the concept.

I think the subconscious reaction is "yeah right, trust another banker?"

This got me:

"...designing the complete consumer banking experience, via the web and your
smartphone.."

I am not sure how good this will be, I mean, credit unions were supposed to be
the answer to big banks issues - but they are largely aggregating under
umbrella ownership as well. Their overdraft fees are a large percentage of
their revenue (mine for example advertises the $500K per month they take in in
overdraft fees as a primary asset directly on the wall in front of the tellers
(Valley Credit Union))

\---

What people really need is fundamental help with managing their spending and
finances.

Though the following is overly complex, for illustration imagine the
following:

You bring home $10K per month. You allocate a particular budget online.

But you have certain cards for certain classifications which are allotted a %
of your spending budget after certain bills are accounted for (rent, utils,
ins, legal req's (child support/tuition, etc).

These cards can only be used for the intended purpose. You'd have a "Food
card", "Car card", "Entertainment card" etc...

The types of cards, their budget % and what not could be based off
understanding you spending needs, habits and goals dependent on your history
and other factors that you've already been measuring through the use of Mint.
And manually set based on your own preferences.

The "food card" works at any grocery, restaurant, cafe, etc (based on the
establishments profile ID in Mint, as an example) -- but will not work at
Kragen, the gas station, etc..

This system could be used to teach people to allocate funds to a bucket - and
ideally prevent them from over spending.

(Sure, there will be plenty of people on HN who will say "PSHAW! only an idiot
would need to have such granular control over their spending - look at me, I
don't spend beyond my means, blah blah blah" -- but there are literally
HUNDREDS OF MILLIONS of people who ___DO_ __\-- thus all the financial issues
that people have, and the preying on such people that many financial
institutions, rent-to-own etc type establishments that exist.

There really is a deep need for material hand-holding in financial issues in
the world. Hand-holding to a degree that some people don't want or need, but
many many others do.

If the system could have a measurable view; such as it requires that you
select a >5% savings number that is not as easily accessed (e.g. like
transferring from your savings to checking whimsically) and that gives you a
constant and real-time view of your credit rating, payment standing and
history on credit-based accounts etc...

With incentive offerings to provide a bit of gamification to the entire
service "Pay your X bill on time for N months and get Y months free Z
service", automatically - without the user required to do anything.

Rewards on brand loyalty simply built into their purchases, integrated group
coupons for the users of the financial training instruments etc...

There is a serious and deep need for a pivot of the entire financial industry
that differs from the centuries old taking that the industry is known for, and
there is a universe of room for innovation in this area....

~~~
pennig
_What people really need is fundamental help with managing their spending and
finances._

Check the "Know what you can safely spend" blurb under The Product section. It
seems like it's in the ballpark of your grand vision. You can allocate
spending/saving buckets, and it will tell you — based on your income/spending
streams — how much discretionary money you have at any given point. Seems
really handy.

------
corin_
Has been said before but: if it was available in the UK, I'd sign up in an
instant.

------
marcamillion
I guess it is a testament to how messed up the banking industry is, that I
actually dream (quite literally in my case) about the launch of this
bank/site.

The most annoying thing is that I don't live in the US any more, so even when
this launches I won't be able to partake - but I have been longing for tech
entrepreneurs to take a stab at some 'traditional' foundational businesses.

Banking is one of those things that really needs some TLC. Plus, there doesn't
have to be branches.

We need a bank for tech entrepreneurs. Not just based in the US dammit.

------
joshuacc
Love the reference to Joseph Schumpeter in the debit card image.
<http://en.wikipedia.org/wiki/Joseph_Schumpeter>

------
jamn
I got a message from BankSimple telling me that I was going to get an invite
soon and asking me for feedback. I got really excited and responded with an
e-mail, but never heard back from them. I'm not sure if I misinterpreted the
original e-mail, but this was a huge letdown.

Did this happen to anyone else? In any case, best of luck to BankSimple. I
can't wait to actually get to try the service. :)

~~~
Q6T46nT668w6i3m
If possible, resend the e-mail. I'll look into it.

------
csomar
Is this going to support third-world countries? Will I be able to sign up and
get the card and bank account running?

~~~
SupremumLimit
The FAQ says they'll concentrate on the US market initially.

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julius
The site has an easter egg. Keyboard navigation: Try j,k,Esc,1-7

(its explained at the bottom of the page)

~~~
KirinDave
The keyboard nav isn't really an easter egg.

HINT: The site does have two easter eggs. I'll spoil one; try clicking in the
far top left of the guilloche background. Didn't you wonder how we got the
page to load so fast with such a huge image?

~~~
blasdel
That's just canvas, it's no surprise. The four seperate webfonts as data URIs
are bigger than that canvas would have been as an image anyway.

Try typing <script into one of the signup fields for the real easter egg!

~~~
KirinDave
Now who told you about that, I wonder...? :)

Surely someone _told_ you about it. You didn't try to XSS our form just for
fun, surely.

~~~
blasdel
I saw the trollface in the sprite and went sourcedigging :)

------
arithmetic
I love the UI for signing up for an account (the bank check-like interface).
That's a nice touch.

------
vamsee
Ok, probably this might be a bit beside the point, but I really liked the red-
tinted logo. The new blue one looks boring. I'm guessing "blue signifies
stability" or some reasoning for that, but still, the old logo looked much
more distinctive.

------
rkwz
Alex talks about BankSimple and more in this podcast.
<http://thisdeveloperslife.com/post/1475231255/1-0-7-audacity>

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benmccann
I like new design. Very cool. Good luck guys.

~~~
justinchen
When I first started scrolling I got a little confused b/c I didn't realize
the header was fixed. The sign up button disappeared and I couldn't figure out
how to get it back.

~~~
nailer
Yeah I find it confusing too. It didn't feel like I was scrolling down, just
covering the sign in page. It's weird and non-simple.

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haribilalic
I understand it's not the only thing behind BankSimple, but I'd love to see
that UI on top of my current Internet banking.

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irons
The first time I connected, Safari 5.0.3 threw an invalid-issuer SSL warning.
Can't seem to reproduce it, though.

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jaywalker
Only for the US

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clofresh
SSL. Respect.

~~~
nailer
Indeed. But I wish the certificate had 'BankSimple' rather than 'Simple
Finance Technology Corp'. Who the hell are they? (rhetorical)

------
x0ner
Anyone else having issues signing up for the beta?

~~~
oof
What issue are you having?

~~~
Qz
The button wasn't lightning up for me if I used autocomplete to enter name +
email.

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muffinman2010
Looks great, but scrolling is choppy on my computer

