Upon its US launch in 2011, BankSimple aims to provide an easy, intuitive, and social banking platform for people who appreciate simple online services. The web-based bank will partner with other financial institutions which will hold the actual deposits, while it focuses on the customer experience. However, its lack of physical presence and unconventional approach may limit its appeal.
BankSimple aims to utilize sophisticated analytics to help consumers better manage their finances by providing an individualized service, catered to specific needs and goals. These systems will reflect the ongoing trend of consumer wellbeing in financial services, with consumers seeking to take control of their finances and use available resources to make better financial choices.
In Datamonitor's Financial Services Consumer Insight survey, over 70% of consumers in the US agreed that their financial services providers must make it simple to manage their finances, while a further 24.3% claimed that they did not have time to manage their finances. It seems appropriate, then, that BankSimple aims to grant consumers realtime functionality in managing their finances through systems linked directly to their smartphones. This connectivity gives consumers much greater control over their finances. Simplifying the banking process by unifying all accounts into one combined account will also appeal to consumers looking to simplify their busy lives. Indeed, Datamonitor research indicates that over 60% of consumers in the US believe that living a less complicated lifestyle is more important now than it was two years ago.
BankSimple has already generated positive word of mouth through personalized responses to consumers signing up to its waiting list. A number of industry bloggers have expressed delight at being sent a personalized email thanking them for their interest and asking them what they would like to see from their bank. As such, a relatively straightforward process has yielded an easy PR win for the soon-to-be entrant.
Although BankSimple is developing what looks to be an attractive offering, the bank faces a number of challenges to its successful market entry. In the past, Datamonitor has cited the importance of financial services providers offering a range of channels, with many consumers seeking the option to contact their bank through online, telephone, and branch channels, depending on the task in hand. While BankSimple is hoping to utilize sophisticated mobile banking systems to make its service competitive, the lack of branch presence may dissuade many American consumers.
BankSimple must also ensure that consumers are comfortable with dealing with a separate entity than that which will hold their deposits. Although its partnership with the member banks may seem straightforward to BankSimple, it may seem like an unnecessary complication to the wary consumer.
Given its ambitious and innovative plans, BankSimple represents an interesting enterprise to watch. However, faced with the historic intransigence of current accounts and a typically apathetic consumer, its vision of new banking could be another start-up that fails to live up to its hype.