I've worked in the banking industry for five years. I've watched dozens of focus groups and seen countless quantitative research projects that mostly all indicate how extremely difficult it is to get people to leave their current bank. Even cash incentives ($100 to open a new Chase checking account, etc) don't seem to move the needle very much in terms of attracting people to switch. The reason features like Bill Pay are free to users--and actually cost banks $1+ per user/mo--is because it will make your relationship with a bank that much stickier and difficult to change. Photo check deposit only brings Simple to feature parity with other banks, almost all of which are using the same provider (Mitek or similar). This isn't to say Simple can't do really well attracting new customers; I just don't think they will be effective even in the medium term at convincing people with an existing banking relationship to completely leave their bank for Simple.
I currently bank with Wells Fargo, and am gradually making the switch over to Simple. Couple reasons why:
– like most banks, WF have a ludicrously outdated web interface that makes doing the simplest thing inordinately painful.
– like most banks, WF suck at providing a complete historical transaction history and search. Case in point – a couple weeks ago I wanted to query a transaction on an older account, after checking online and being transferred between at least four different customer service agents in different divisions, I was none the wiser. The best they could do was offer to send me printed statements, at a $100 cost.
- like most banks, WF make obscene profits while engaging in shady practices - e.g., trying to upsell me every single time I call them, mailing me an offer for a "free" credit score service (that, if you read the small print, is actually a subscription) and not least discriminatory lending practices (c.f., recent settlement with Justice Dept)
Once I called Wells Fargo to ask about a fee on my account that didn't make sense, and when I looked back later I noticed they had added a charge of $2 for the privilege of talking to them on the phone about the original suspicious fee. They are not trustworthy at all.
I then moved over to ING. It has been great, but they were bought by Capital One and I am worried that things will go downhill (and I don't particularly want to do business with Capital One). Simple looks like a great alternative--I wish I could get a guarantee that they won't be bought by some shady megabank a year after I take the time to change over.
All of your reasons are common complaints, and I share them (with the exception of USAA). I work at such a bank, and can tell you from painful firsthand experience how difficult it is to do good UX design work inside of a traditional banking environment. I think Simple had the right idea to essentially decouple the "backend banking" stuff from the UX by partnering with a bank and somewhat removing many of the constraints a full-on bank has to wrangle with.
What's interesting though is that despite these complaints, consumers generally are averse to switching their banks.
I've worked at a bank for several years, and agree 100%. It's basically impossible for them to pull off something like Simple.
So the question is – how valid is that research given consumers haven't had a real alternative?
Now that we're (finally) moving away from paper payments, seems to me that it's a bad idea to bank on consumer complacency. Either way, I'm just happy that there's a decent alternative.
People said a lot of similar things before the iPhone launched.
I agree that this is just incremental improvement that actually already exists some places, but it seems like Simple is the first "bank" that deeply understands both software and the importance of user experience. (And perhaps also platforms, which could be incredible in banking/finance.)
That's pretty unique. And it's taken them a remarkably short time to catch-up to current banks. Personal finance is definitely a schlep industry.
Simple is going to compete on experience, not features. This has worked time and time again for lots of product companies, so it will be interesting to see if it works in banking.
You've nailed it. We can't outcompete banks with gimmicks. We can't afford to lure people in with teaser rates or rewards programs that look great in an ad, but never work as well in reality.
Instead, we're competing on experience. Crafting that experience, especially given the cruft of banking, is a schlep. And its a huge competitive advantage for us.
To the grandparent poster, yes, switching banks is hard, but $30bn of revenue switches retail banks each year because of negative experiences. Thats a tiny amount for the top 4 banks, but a large market for a startup. If you can deal with the schlep.
As I mentioned downthread, it is incredibly tough to do good UX design inside of a traditional bank. I actually gave a talk on this recently for World Usability Day. You have regulatory and compliance issues, a patchwork of legacy systems and a huge array of 3rd party vendors to contend with. It's not that banks don't understand the importance of UX; it's just a very difficult environment to actually deliver it. Simple did a great job abstracting most of that by partnering with a bank instead of actually being one.
I have a "premiere" relationship and "personal banker" at my main bank, yet having used Simple for a year I'm actively evangelizing those I know to try Simple, and have switched to Simple for my everyday wallet. The Simple banking experience for what most people need is like the original iPhone was to 2006 era smartphones -- the "feature" list is not the real story.
Simple offers an extraordinarily low frustration factor between you and your goal, and this isn't captured by the "tech specs".
You mention you still have a "main bank". What are the reasons you maintain that relationship and don't completely sever ties? Do you plan to make a full switch to Simple? I'm not being facetious, I just want to point out that this is pretty common--for people to have a "side account" separate from their primary bank (we saw lots of people using prepaid debit cards in this way).
Since this is an area of interest for you, here's more detail:
I'd say I've switched to Simple from cash, not to Simple from another bank. But seeing most people's banking usage, I think they might be well served to switch to Simple from their regular bank barring business reasons not to. My wife is switching to Simple from her bank, for example.
My main bank is HSBC. I rely on their international account features, and enjoy their premiere world card and travel friendly banking and currency capabilities. I can walk into a local branch here in the US and withdraw cash in Euros, for example, or trade them back in, at official banking currency rates, not usurious money exchange rates.
Previously a longtime Citibank, BoA (was Fleet, bought by BoA), and Wells Fargo customer, I have found HSBC to have by far the most customer friendly statements (both the bank and the card), and by far the least hassle as far as upselling, cross selling, fees, etc. Maybe this is why HSBC got a first place ranking as "most ethical company" ahead of Intel ranked number 2:
HSBC is also the only bank I've worked with that lets me use my true credit card (not debit card) as my main ATM card as well. This replaces the high fee high interest "cash advance" role that most credit cards offer, with the true ATM/debit card role of the bank's dedicated ATM card. This way I can carry a single card for both normal CC use and no-fee cash and ATM features. HSBC's online systems are fully integrated across both banking and card services, their bill pay system is fewer steps than Citi's. They also offer high interest "online only" savings rates matching online only offerings like ING Direct. HSBC do not, however, have mobile check deposit.
I'm such a fan of HSBC that when First Niagara recently bought the branch I'd opened my account in and I couldn't move due to banking regs, I reestablished my banking relationship with HSBC all over again. (Meanwhile, First Niagara is the worst online banking experience of any bank I've experienced. It's worth noting that the underlying DNS names of their various online services all point to third parties, suggesting First Niagara outsources all this. They're bad, and they should feel bad.)
After a year with Simple, I've recently closed all the other accounts but Citi which I keep as my business account to keep things separate.
HSBC feels the most ethical of the banks I've worked with, Citibank the most convenient, and Simple the most ... simple. Above I compared Simple to the iPhone. Perhaps HSBC = Nokia, Citibank = Blackberry, and Simple = iPhone.
A small business owner should try Citi, a world traveler should try HSBC, and an everyday consumer should try Simple.
It's also worth mentioning that the customer service really is phenomenal, and I'm hoping that they scale this up at the same rate as the rest of the business.
Part of the magic in the support is having a button on the side of the site where I can just open up a ticket and describe an issue, and in short time get a response back from a real human being. For instance, I went to Mexico a week or so ago and sent them a message asking them to note this on my account. They quickly responded back stating that they had noted this, and including a list of fees and limitations that I could expect when using my card down there. This was a far superior experience to sitting on the phone, punching in prompts, and answering security questions.
If you do need phone support (I have once so far), the number rings through to a real person, and is superior to big banks in response time and helpfulness in my experience as well.
I'm a big fan of the service, as much for what it is now as for what I'm sure it's going to become as it continues to grow.
> I've watched dozens of focus groups and seen countless quantitative research projects that mostly all indicate how extremely difficult it is to get people to leave their current bank.
Apparently none of them thought to try offering higher interest rates. We moved for a 1/4 point.
I'm always skeptical of banks trying to use small interest rate differences to get me to open an account. The bank can simply change the interest rate on my account 6 months later, after I've moved over my bill payments.
