by Lisha Arino
If a NY-based startup takes off, banking may be the next disrupted industry. BankSimple, a New-York, which promises to offer fee-free, mobile banking announced that it would be launching to the public next month.
“It’s a new alternative for people who don’t go into branches and are looking for a modern and intuitive interface,” said Adam Erlebacher, Vice-President of Product Marketing and Operations at BankSimple
Technically, BankSimple isn’t a bank. Rather, it partners with chartered financial institutions that are regulated by the FDIC. While those banks hold the money, BankSimple helps customers manage it more effectively. So far, only two banks are working with BankSimple, but Erlebacher said that the company hopes to add more partners and to provide more services as it expands.
Like many other mobile banking applications, BankSimple will allow users to manage their finances, make account transfers, pay bills and deposit checks through their smartphones. However, Erlebacher said that at BankSimple, there would be “a much greater focus on customer experience.”
For one thing, they promise not to charge fees. For instance, instead of overdrawing an account, Erlebacher said, BankSimple would just decline the transaction. The company is also offering free ATM access through a partnership with Allpoint, the largest fee-free ATM network, according to The New York Times. According to BankSimple’s website, customers will have more than 35,000 ATMs to choose from.
BankSimple also revealed several new features in a video on its website (see video below). One is a “safe-to-spend” number, which tells users how much money is left over after taking into account their income and routine expenses. The service also helps users budget and save money toward a specific goal.
The company has also focused on making searches easier by emphasizing natural language search. In the video, for example, CEO and co-founder Josh Reich used this feature to figure out the name of a restaurant he visited in Portland, Oregon, the month before. By typing in “food last month in portland” he found out it was called “Henry’s Tavern.”
BankSimple has raised about $13 million in venture capital funds, according to CrunchBase. Erlebacher said that the company plans to raise revenue by splitting the interest margin and interchange collected with the banks. Costs would also be kept down because the company has no branches to build or maintain.
So far, about 70,000 people have signed up for the service, Erlebacher said, but he added that the bank cards would be handed out gradually.
“It’ll be ramping up in sort of a measured way. It’s a large undertaking and it needs to be rock solid as we’re rolling out,” he said.