An actual BankSimple employee might be able to explain it better, so I welcome any corrections, and I might be very wrong since I believe that only during the last two weeks or so is that the whole team has been built and started wholly working on the product, but this is what I knew about BankSimple from a few months back.

They are working on a great online front end, focusing on awesome user experience, while partnering with another financial institution (just one, or more, I'm not really sure) to handle the back end: all of the transfers, payments, ACH handling, and so on.

So basically you have this awesome online "bank" with a great web PFM but the business processes are actually being handled by an established brick and mortar bank.

There are many banks and they do one thing great - handle money - but many of them have awful web/internet teams. So in comes BankSimple, they solve the web part of the equation and partner up with one or more banks.

If you think about it, it kinda sounds like what Mint could be if they were more than an aggregator and closer to an online bank.