8 ms·

I'm not sure I understand the proposition now. Who is the relationship with? As in... who has my money? I read it as them hiding that from you for simplicity

by buro9 15y ago

I'm not sure I understand the proposition now. Who is the relationship with? As in... who has my money? I read it as them hiding that from you for simplicity... you get this one interface and customer service which is wonderful, but to achieve this they are the proxy to your bank? So... do they set up the bank accounts, or do you? Do you have the ability to go straight to your bank, or does Simple preclude that ability? In this text: > Simple is not a bank. Simple replaces your bank. We build the services and support you need to manage, understand, and automate your everyday spending and saving. Meanwhile, we integrate with chartered banks who manage your deposits in FDIC-insured products. We take care of you, our partner banks take care of your money, and jointly, we’ve designed a better financial experience. I come out confused. Who has the money, can I go straight to them to get it? That's the missing bit of clarity that would make me feel the love (trust).

smackfu 15y ago
I think the idea is: What if you took mint.com, and instead of interfacing with hundreds of banks, you interface with a single bank. You can integrate much more closely and provide a better experience, and the customer shouldn't really care what the underlying bank is.
- finisterre 15y ago
  I wonder if the Mint team ever thought of going that route; they were/are very well placed to lead users into this model. Once you get used to the idea of being able to see all your accounts and varies metrics in one place it's obvious to appreciate being able to push data the other way and instigate transfers and bill payments from that nice central hub. Maybe the complications of getting the banks on board was the barrier.
- burnstek 15y ago
  The problem is that most customers do care what the underlying bank is, especially given the events over the past few years. The world may have been ready for this five years ago, but not anymore.
  - ianlevesque 15y ago
    There are plenty of people still ready for it now.
al3x 15y ago
Hi, cofounder of Simple here. We work with partner banks who hold on to deposits. For all intents and purposes, you never have to think about who that partner bank is, but if you ever need to contact them directly, you'll know where your funds are. You might find our FAQ informative: https://www.simple.com/faq/ https://www.simple.com/faq/.
- buro9 15y ago
  Still confused. Is the account at the partner bank in my name, or that of Simple?
  - delinka 15y ago
    Assumption alert: the account at the partner bank is in your name. Your money must be in your name for it to get the FDIC's "$250,000 limit per depositor" insurance coverage. Having one big mattress with Simple's name on it would preclude your money being insured. Ergo, the account must be in your name.
    - buro9 15y ago
      Excellent. That's all I needed to know.
    - damoncali 15y ago
      I dont' think that's exactly true. There is such a thing as the CDARS program, which allows you to spread your money between accounts at multiple banks. Not sure what the limitations are on that, but I would be weary of assumptions on this. If the money were not in my name, that would be deal killer. EDIT: for clarity.
      - delinka 15y ago
        It's per depositor per bank. Not per depositor period. Spreading your money across accounts at a single bank would not get you additional protection. Spreading your money across banks is how you protect more of your money.
qeorge 15y ago
As I understand it: Banking is a commodity product. Other than access to ATMs, customer service, and online banking there's not much difference between banks (other than rates & fees, of course). Same goes for the customers, honestly. If the bank doesn't extend you credit anyway, its a "your money is green" situation. Yet the marketplace is still inefficient, and they think they can make money by making it efficient. To do so, Simple has defined a standard checking account, if you will. It has x% interest, y fees, etc. Since banks and customers are a commodity, Simple can then say "we have 10000 customers at this price. Any FDIC insured bank - do you want them?" and perform a reverse auction of sorts. Its very much like LendingTree or FeeFighters. The obvious obstacle is the same with internet banking - what if I need to talk to someone or get money out of an ATM? You're not going to convince me a random bank in New Mexico is interchangeable with Wells Fargo when I need cash. They are handling this objection by providing a front-end which standardizes the customer service, ATM access (they pay the fee so use whatever ATM), and online banking pieces, and hopefully that standard is high quality. So you still have an account with XYZ bank in Nowhereville, USA, but you've got a nice front-end instead of a questionable online banking product/customer support. All XYZ bank does is hold your cash for you, and its insured anyway so they can't screw that piece up. Sounds great to me.
- maaku 15y ago
  There are strict rules that govern how banks operate. As bad as that relationship may have gotten recently, there are some basic legally enforced assurances that I can take for granted in how banks will respond to requests about my money. If Simple is a middleman to this transaction, I no longer have those legal protections. That doesn't sound very great to me.
  - Game_Ender 15y ago
    Do you have some concrete examples?
    - maaku 15y ago
      What happens to the deposits if Simple (the company) goes under? EDIT: Yes, I know they are FDIC-insured. But inside accounts setup by Simple. Are those accounts also in Simple's name, or jointly setup? What could potentially happen then during the lawful unwinding of the company?
wmf 15y ago
This is a good example of why "we're not a bank" is more confusing than comforting. IMO Simple should just gloss over that part. Edit: I would liken it to startups that are built on top of some cloud; I don't need to know that because ultimately I hold the startup responsible for their reliability/security, not their underlying provider.
- ohyes 15y ago
  I'd go with 'scary.' I put my money in a bank because there is an assurance that I'll be able to get it out later and that it is safe there.
  - al3x 15y ago
    If you bank with us, you're money resides in an FDIC-insured bank account. You have the account and routing numbers and can transfer funds in or out at any time. We try to make banking anything but "scary" :)
    - sliverstorm 15y ago
      Sweeping the technical details under a rug is what is making this scary. Many people may not care, but it would be very comforting to those that do if you had a document somewhere that explained exactly, in gory detail, where and how BankSimple fits in between the customer and the bank.
- al3x 15y ago
  Noted.
damoncali 15y ago
I don't get it either. I want to know who my bank is. I also don't find checking accounts and credit cards to be all that complicated. My bank (USAA), for example, is pretty good. The idea of putting a startup between them and me just seems odd. It all just seems like a glorified IT system for banks.
- al3x 15y ago
  Hi, cofounder of Simple here. Most banks do use "glorified IT systems". Very few of them develop their technology in-house. Think about it this way: you can have a bank that buys their technology from another company, or you can have a technology, design, and customer service company that partners with banks. Both are viable options, but I think our approach is going to better for retail banking customers in the long run.
  - sector 15y ago
    As a customer, I'd feel a lot more comfortable if you worked solely as a technology vendor to my bank. This isn't a knock on the team you're putting together, or your ability to build a great company. It's caused by the realities associated with venture capital. Now that you took VC money, there's countdown to an exit, and I have to think about likely buyers. If you're successful, one of the top possibilities is a strategic acquisition from a major bank. This basically means that if I buy into the vision and support it, I'm likely to end up right where I started. I want to like this idea, because I want to see more great, customer-service oriented banks. But I just can't quite bring myself to like it, because of the guaranteed change in ownership that is pending and the lineup of probable buyers.
    - al3x 15y ago
      Hi, cofounder of Simple here. There's a ton about when and how and if we exit that's out of our control, and I wouldn't presume to predict exactly what's going to happen. But, please know that our goal is not to sell out to a big bank. We're building this because we want to use it, and part of what we want to use is a banking service that's provided by people who are acting in the best interests of their customers. Unfortunately, I'm not sure that going with a smaller or local bank provides a more solid guarantee that you won't be banking with a giant down the road. The economic crisis of the past few years has seen a ton of consolidation in retail banking, and I think there's even more to come.
bisrig 15y ago
As a follow-on to this, it certainly appears (from quick searches of your site as well as reading through this thread) as though you are not disclosing which banks you are specifically partnering with... this is certainly your choice, of course, but given the events of the past few years, I think that there's a significant number of people that make an active choice not to use certain banks due to their past behaviors - if I were to sign up for something like this, I would be concerned that there would be a chance that I could be implicitly supporting a company that I'm actively not supporting today. Is there any notion of being able to "choose" the partner bank your account is held with, or at least being able to screen a list prior to opening an account?
- al3x 15y ago
  We've disclosed all of our bank, technology, and processing partners. I don't think we're likely to allow customers to choose which partner bank holds their funds, but we do make that information transparent.
  - anonymoushn 15y ago
    Could you point me to the place where you've done this? Edit: it looks like you disclosed two partner banks at http://www.simple.com/blog/Simple/partners-funding/ http://www.simple.com/blog/Simple/partners-funding/, but I'm not sure that this is a conclusive list.

by buro9 15y ago

smackfu 15y ago

I think the idea is: What if you took mint.com, and instead of interfacing with hundreds of banks, you interface with a single bank. You can integrate much more closely and provide a better experience, and the customer shouldn't really care what the underlying bank is.

finisterre 15y ago
I wonder if the Mint team ever thought of going that route; they were/are very well placed to lead users into this model. Once you get used to the idea of being able to see all your accounts and varies metrics in one place it's obvious to appreciate being able to push data the other way and instigate transfers and bill payments from that nice central hub. Maybe the complications of getting the banks on board was the barrier.
burnstek 15y ago
The problem is that most customers do care what the underlying bank is, especially given the events over the past few years. The world may have been ready for this five years ago, but not anymore.
- ianlevesque 15y ago
  There are plenty of people still ready for it now.

al3x 15y ago

Hi, cofounder of Simple here. We work with partner banks who hold on to deposits. For all intents and purposes, you never have to think about who that partner bank is, but if you ever need to contact them directly, you'll know where your funds are. You might find our FAQ informative: https://www.simple.com/faq/ https://www.simple.com/faq/.

buro9 15y ago
Still confused. Is the account at the partner bank in my name, or that of Simple?
- delinka 15y ago
  Assumption alert: the account at the partner bank is in your name. Your money must be in your name for it to get the FDIC's "$250,000 limit per depositor" insurance coverage. Having one big mattress with Simple's name on it would preclude your money being insured. Ergo, the account must be in your name.
  - buro9 15y ago
    Excellent. That's all I needed to know.
  - damoncali 15y ago
    I dont' think that's exactly true. There is such a thing as the CDARS program, which allows you to spread your money between accounts at multiple banks. Not sure what the limitations are on that, but I would be weary of assumptions on this. If the money were not in my name, that would be deal killer. EDIT: for clarity.
    - delinka 15y ago
      It's per depositor per bank. Not per depositor period. Spreading your money across accounts at a single bank would not get you additional protection. Spreading your money across banks is how you protect more of your money.

qeorge 15y ago

As I understand it: Banking is a commodity product. Other than access to ATMs, customer service, and online banking there's not much difference between banks (other than rates & fees, of course). Same goes for the customers, honestly. If the bank doesn't extend you credit anyway, its a "your money is green" situation. Yet the marketplace is still inefficient, and they think they can make money by making it efficient. To do so, Simple has defined a standard checking account, if you will. It has x% interest, y fees, etc. Since banks and customers are a commodity, Simple can then say "we have 10000 customers at this price. Any FDIC insured bank - do you want them?" and perform a reverse auction of sorts. Its very much like LendingTree or FeeFighters. The obvious obstacle is the same with internet banking - what if I need to talk to someone or get money out of an ATM? You're not going to convince me a random bank in New Mexico is interchangeable with Wells Fargo when I need cash. They are handling this objection by providing a front-end which standardizes the customer service, ATM access (they pay the fee so use whatever ATM), and online banking pieces, and hopefully that standard is high quality. So you still have an account with XYZ bank in Nowhereville, USA, but you've got a nice front-end instead of a questionable online banking product/customer support. All XYZ bank does is hold your cash for you, and its insured anyway so they can't screw that piece up. Sounds great to me.

maaku 15y ago
There are strict rules that govern how banks operate. As bad as that relationship may have gotten recently, there are some basic legally enforced assurances that I can take for granted in how banks will respond to requests about my money. If Simple is a middleman to this transaction, I no longer have those legal protections. That doesn't sound very great to me.
- Game_Ender 15y ago
  Do you have some concrete examples?
  - maaku 15y ago
    What happens to the deposits if Simple (the company) goes under? EDIT: Yes, I know they are FDIC-insured. But inside accounts setup by Simple. Are those accounts also in Simple's name, or jointly setup? What could potentially happen then during the lawful unwinding of the company?

wmf 15y ago

This is a good example of why "we're not a bank" is more confusing than comforting. IMO Simple should just gloss over that part. Edit: I would liken it to startups that are built on top of some cloud; I don't need to know that because ultimately I hold the startup responsible for their reliability/security, not their underlying provider.

ohyes 15y ago
I'd go with 'scary.' I put my money in a bank because there is an assurance that I'll be able to get it out later and that it is safe there.
- al3x 15y ago
  If you bank with us, you're money resides in an FDIC-insured bank account. You have the account and routing numbers and can transfer funds in or out at any time. We try to make banking anything but "scary" :)
  - sliverstorm 15y ago
    Sweeping the technical details under a rug is what is making this scary. Many people may not care, but it would be very comforting to those that do if you had a document somewhere that explained exactly, in gory detail, where and how BankSimple fits in between the customer and the bank.
al3x 15y ago
Noted.

damoncali 15y ago

I don't get it either. I want to know who my bank is. I also don't find checking accounts and credit cards to be all that complicated. My bank (USAA), for example, is pretty good. The idea of putting a startup between them and me just seems odd. It all just seems like a glorified IT system for banks.

al3x 15y ago
Hi, cofounder of Simple here. Most banks do use "glorified IT systems". Very few of them develop their technology in-house. Think about it this way: you can have a bank that buys their technology from another company, or you can have a technology, design, and customer service company that partners with banks. Both are viable options, but I think our approach is going to better for retail banking customers in the long run.
- sector 15y ago
  As a customer, I'd feel a lot more comfortable if you worked solely as a technology vendor to my bank. This isn't a knock on the team you're putting together, or your ability to build a great company. It's caused by the realities associated with venture capital. Now that you took VC money, there's countdown to an exit, and I have to think about likely buyers. If you're successful, one of the top possibilities is a strategic acquisition from a major bank. This basically means that if I buy into the vision and support it, I'm likely to end up right where I started. I want to like this idea, because I want to see more great, customer-service oriented banks. But I just can't quite bring myself to like it, because of the guaranteed change in ownership that is pending and the lineup of probable buyers.
  - al3x 15y ago
    Hi, cofounder of Simple here. There's a ton about when and how and if we exit that's out of our control, and I wouldn't presume to predict exactly what's going to happen. But, please know that our goal is not to sell out to a big bank. We're building this because we want to use it, and part of what we want to use is a banking service that's provided by people who are acting in the best interests of their customers. Unfortunately, I'm not sure that going with a smaller or local bank provides a more solid guarantee that you won't be banking with a giant down the road. The economic crisis of the past few years has seen a ton of consolidation in retail banking, and I think there's even more to come.

bisrig 15y ago

As a follow-on to this, it certainly appears (from quick searches of your site as well as reading through this thread) as though you are not disclosing which banks you are specifically partnering with... this is certainly your choice, of course, but given the events of the past few years, I think that there's a significant number of people that make an active choice not to use certain banks due to their past behaviors - if I were to sign up for something like this, I would be concerned that there would be a chance that I could be implicitly supporting a company that I'm actively not supporting today. Is there any notion of being able to "choose" the partner bank your account is held with, or at least being able to screen a list prior to opening an account?

al3x 15y ago
We've disclosed all of our bank, technology, and processing partners. I don't think we're likely to allow customers to choose which partner bank holds their funds, but we do make that information transparent.
- anonymoushn 15y ago
  Could you point me to the place where you've done this? Edit: it looks like you disclosed two partner banks at http://www.simple.com/blog/Simple/partners-funding/ http://www.simple.com/blog/Simple/partners-funding/, but I'm not sure that this is a conclusive list.