BankSimple’s dream team (left to right, from top): Thomas Lockney, engineer; Shamir Karkal, CFO; Bill DeRouchey, creative director; Josh Reich, CEO; Toby Sterrett, engineer; Brian Merritt, operations; Alex Payne, CTO; and Ian Collins, engineer.

BankSimple: A Bank That Doesn't Suck

Inside BankSimple's quest to put user experience above all else.

"LET'S START a retail bank." That was the email subject line that greeted Jerry Neumann, a venture capitalist, one morning in 2009. The sender: his former employee Josh Reich, a Wall Street denizen so fed up with his personal-banking experience — the hidden fees, the confusing jargon, the poor customer service — that he vowed to build a better one.

Alas, regulatory roadblocks prevent most people from bootstrapping a bank. So Reich and partner Shamir Karkal created BankSimple instead.

The New York tech startup, which in May launched a closed-beta version of its web app, aims to streamline the U.S. banking experience by decoupling it from actual banks. Services such as Mint and LearnVest have toyed with this notion for years, launching sleek personal-finance tools that source stats from existing accounts. BankSimple plans to one-up them all by offering checking accounts, debit cards, and more. The twist: Rather than handling cash, it partners with "back-end" banks, so employees can prioritize user satisfaction. "Our core brand value is 'Don't suck,' " Reich says.

At first glance, BankSimple's sparse, elegant platform looks more like a Tumblr than, say, a Chase.com. That's because creative director Bill DeRouchey designed for mobile from the get-go, which, he says, "forced us to make the flow as simple as possible." The site also nods to Twitter and Google, offering a scrollable stream of recent transactions and a search feature that understands commands like "show me every transaction greater than $50." To give users a real-time snapshot of their financial health, a "safe to spend" balance figures in pending bills and savings goals.

BankSimple's operations are even bolder than its design. Because it's tethered to multiple banks (via special software), the startup can shift users' money between them to secure the best interest rates. The FDIC-backed firms, in turn, get additional customers without paying for marketing, meaning "there's enough revenue for both of us to be happy," says Pete Chiccino of Bancorp, which is slated to join CBW Bank as a BankSimple partner. Reich also promises his company won't charge the kinds of extraneous fees that netted U.S. banks some $36.5 billion last year. In fact, BankSimple touts 30,000 fee-free ATMs in its network and plans to extend credit to prevent users' overdrafts. To offset those costs, it relies on retailer fees from its debit card, and soon, interest from loans — much the way banks operated before deregulation in the late '90s.

To be sure, BankSimple has plenty of obstacles to overcome. Among them: servicing 12,000 beta testers by year's end; opening its platform to developers; launching to the general public in 2012; and luring customers away from brand-name banks with physical branches. "I'm not saying it can't be done," says Brad Strothkamp, a VP at the research firm Forrester. "But the answer is not as simple as, 'We've got better technology.' "

"People are going to raise an eyebrow," counters CTO (and Twitter vet) Alex Payne. "Then, hopefully, they'll realize we're building something better than a bank."

BankSimple’s dream team (left to right, from top): Thomas Lockney, engineer; Shamir Karkal, CFO; Bill DeRouchey, creative director; Josh Reich, CEO; Toby Sterrett, engineer; Brian Merritt, operations; Alex Payne, CTO; and Ian Collins, engineer.

Add New Comment


  • MB

    It's amazing to me that this so-called Bank is not even open yet and already they are getting kudos as the best bank evah!! C'mon now. They have partnered with 2 other banks to do the heavy-lifting for them. I hope these partner banks charge enough to make up for giving the glory to somebody else!

    Just sayin'

  • Subbu Iyer

    Congratulations. Somebody got to doing it finally! For ages, everyone threatened Microsoft would. Thank God for small mercies. Forrester and their ilk can keep finding arguments for why it won't work. But I hope the team will wake up every morning and look into the mirror and kiss their faces saying they are happy to be part of creating a new world that involves them as Customers and Consumers. Way to go, guys!!!

  • ryanmatzner

    Is it just me or is the publication date on this article a full month in the future?

  • Chad Keck

    Most of the USAA banking services including credit lines are open to anyone. It's mainly the insurance services that are for military/employees only.

    ING Direct was always my favorite bank even though they had their issues, but with the Capital One acquisition I've dropping them and most likely going back to USAA. USAA does have branches locally in San Antonio where they are based but I know that doesn't mean much to anyone else, but still a great bank.

  • Josiah Kiehl

    USAA isn't open to the public for all their awesome services. I tried to sign up for an account to get iPhone check depositing ability, but was told I can't if I don't have a credit line. I can't get a credit line if I'm not a vet or other special kind of person.

  • zftcg

    USAA opened up their banking (and some, but not all, of their other products) to the general public in 2009. From their website (https://www.usaa.com/inet/page...

    "USAA's investment products, most checking and savings products, credit cards, life insurance, and shopping and discounts are available to other individuals. USAA auto and property insurance is not available due to membership eligibility requirements."

  • Michael Kreppein

    I'm not in the beta so I can't compare but this seems much like USAA bank or ING Direct.  USAA has no physical branches, credits my ATM withdrawl fees and always has the leading edge apps.  From an end-user experience, what's the difference?