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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

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. I'll be curious to see how this goes.

abstractbill 17y ago
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".
webwright 17y ago
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.
- imownbey 17y ago
  The cellphone was very much a utility for a large portion of the mobile market before the iPhone came along.
- bmj 17y ago
  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.
- jedc 17y ago
  I bank with USAA, and I pretty much LOVE banking with them. But agree that they are one of the very, very, very few banks where this applies.
- sgoraya 17y ago
  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).
- abstractbill 17y ago
  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).
- crux_ 17y ago
  Many banks do things that, were I a customer, I would definitely hate: http://moneywatch.bnet.com/saving-money/blog/devil-details/fee-free-for-all-banks-force-consumers-into-overdrafts/430/ http://moneywatch.bnet.com/saving-money/blog/devil-details/f...
- mortenjorck 17y ago
  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.
- jorgeortiz85 17y ago
  Must be Stockholm syndrome. 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.
  - vl 17y ago
    Just get American Express, after all you need second backup card anyway, and they are less paranoid about international travel (than Visa in my case).
- sabat 17y ago
  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.
axod 17y ago
>> "Banking does suck." FWIW, This may be true in the US, but certainly isn't a worldwide phenomenon. For example, UK banks pretty much work really well. Seeing US banking in comparison is like using a time machine to go back to the 1950s.
- gcheong 17y ago
  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.
- DrJokepu 17y ago
  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.
  - abstractbill 17y ago
    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.
  - axod 17y ago
    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.
    - 17y ago
al3x 17y ago
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.

abstractbill 17y ago

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".

webwright 17y ago

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.

imownbey 17y ago
The cellphone was very much a utility for a large portion of the mobile market before the iPhone came along.
bmj 17y ago
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.
jedc 17y ago
I bank with USAA, and I pretty much LOVE banking with them. But agree that they are one of the very, very, very few banks where this applies.
sgoraya 17y ago
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).
abstractbill 17y ago
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).
crux_ 17y ago
Many banks do things that, were I a customer, I would definitely hate: http://moneywatch.bnet.com/saving-money/blog/devil-details/fee-free-for-all-banks-force-consumers-into-overdrafts/430/ http://moneywatch.bnet.com/saving-money/blog/devil-details/f...
mortenjorck 17y ago
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.
jorgeortiz85 17y ago
Must be Stockholm syndrome. 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.
- vl 17y ago
  Just get American Express, after all you need second backup card anyway, and they are less paranoid about international travel (than Visa in my case).
sabat 17y ago
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.

axod 17y ago

>> "Banking does suck." FWIW, This may be true in the US, but certainly isn't a worldwide phenomenon. For example, UK banks pretty much work really well. Seeing US banking in comparison is like using a time machine to go back to the 1950s.

gcheong 17y ago
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.
DrJokepu 17y ago
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.
- abstractbill 17y ago
  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.
- axod 17y ago
  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.
  - 17y ago

al3x 17y ago

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.