341 karma · joined June 23, 2009
There is no political intent behind this site. It is meant to be a joke. A joke with a grain of truth.
Backstory: I was waiting for a conference call, saw that stopsoap wasn't registered and put this together in 15min.
Deeper backstory: I'm the co-founder & CEO of Simple.com. We deal with many SOAP APIs. The upside is that SOAP provides very clear specifications as to how the API is supposed to work. The downside, is that things rarely work as expected. It is frustrating, but such is life in banking.
On a more serious note, We're Hiring. If you'd like to work at Simple, where we replace you bank & give you clean REST APIs to your finances, check us out: http://simple.com
We don't have the notion of 'overdraft'. Instead, we set up a special savings goal for each customer called an Emergency Fund. We automatically start saving a small amount each day towards the Emergency Fund. So, you might have $1,000 in your account and $500 in your Emergency Fund. If you then went to a store and spent $1,200, we would draw $1,000 from your Safe-to-Spend and an additional $200 from your Emergency Fund. Again, no overdraft fee. In fact, instead of paying a fee and then paying interest on the overdraft, you will be earning interest on any money in your Emergency Fund. A small tweak on how overdrafts typically work, but a huge bonus for customers.
I'm just here for the day. I came to town to speak at The Economist's banking conference. Flying back tomorrow to celebrate the launch with our team.
The way it works is the card gets linked to an account on signup. This account is a non-interest bearing card account. When you deposit funds, we place those funds in other accounts. The other accounts are determined by what products we have available from our partner banks, and your historic usage patterns.
For example, if you start spending less, we'll move more of your money into an interest bearing account so that you can benefit from your financial restraint.
As you spend money, we (in real time) move funds to the card account from your other accounts to cover the cost of anything you buy using the card.
As our portfolio of financial products grow, we'll continually rebalance your money across these products to maximize your return.
This system automates what most people try to achieve, but banks make difficult to do: namely, earn as much interest on money you have and pay as little interest on money you borrow.
We do this because it is the right thing to do for our customers & quite easy for a computer to manage. Other banks don't do this because they earn significant revenue when people make mistakes in managing their money. We have none of those punitive fees, so our interests are aligned with our users.
(PS: I'm in London right now. What's up with English Bacon??)
In addition to the co-mingled account, everyone gets an individual interest baring account, which is directly titled in the name of the customer.
Either way, you can access your funds at any time.
In the case of the co-mingled account, we generate pseudo-account numbers that correspond to your portion of that account.
It is a complicated answer, but unfortunately, banking is complex. We do a lot of heavy lifting on the back end to make it as simple as possible for you.
(Josh - CEO, Simple)
I've never lived in SF, but as I understand it, it is not much cheaper.
There is a great community of tech startups, but they tend to be around the Union Square area in Manhattan. I spend a bunch of time meeting up with folks around Union Square, but its only a 15min train ride in from Dumbo in Brooklyn. Meetup is based here and there are a ton of tech and startup meetups. You wont find yourself lacking for social support as you build up your business.
I love NY. There is a fantastic culture of getting shit done. The city is cut throat, but that is inspiring. Everyone is on a mission. And its not all about technology. You meet inspired folks from all walks of life. Talented designers, musicians, financiers, advertisers, chefs and architects.
I'm going to miss NY. My company is heading to Portland, but I hope to bring the best of NY to Portland.
BankSimple is the name of our product, our company is Simple Finance Technology Corp. (rolls off the tongue...) There is plenty of precedent for our situation - not being a chartered bank but having 'bank' in our product name and URL. BankFreedom, BankRate, FindABetterBank, etc. Not comparable businesses, but face similar issues.
IANAL, but, by god, we pay them handsomely to deal with this and many other banking issues.
While our relationship with banks is similar from a regulatory perspective, we have deep technology integrations that allows us to provide a much better end-to-end user experience.
This is why it is possible to launch an 'affiliate' card in a matter of weeks, but it is taking much longer for us. We first had to find banks that shared our vision, were willing to cede control of fees and user experience to us and had the technical chops to integrate with us. It was a tall order, but we'll be making some key announcements on this front real-soon-now.
I don't have the latest numbers, but in '08, the large banks were making closer to 45/55, not 80/20.
In addition to our core team, we have multiple payments systems consultants, banking lawyers and former regulators working with and advising us. We are also actively growing our compliance and regulatory teams. The jobs aren't posted on the site, because that's not the best way to hire for those roles.
Not that any of that is really worth much. Innovation comes from the outside. A lot of the pain in banking stems from atrocious technology, so we're making better tech to drive a better experience.
My startup is extraordinarily stressful. But I'm not in it just for the money. I was sick of working in a highly paid position in a field that I couldn't muster any passion towards. From the authors perspective, I imagine that my decision to walk away from that salary, and the bonus (oh, the bonus...), was a mistake. But, for all the hard work that I am committing to what we are doing and for all the stress it entails, I'm a happier person.
That's not a bad place to be.
The biggest problem that you'll face is not actually moving the money, but complying to anti-money laundering regulations and the like.
That said, we're building a banking service with an API. We've done the hard work. I'd love to know more about your use case to see if we can help.
Given your unique experience, you could probably find niche pilot tools that could use help. Check out freshmeat.net and other sites to find projects that are both interesting to you and could benefit from additional input.
Personally, I think you'd just be better off buying government bonds from your favourite world leaders.
This is a big difference. If the purpose is to rate photos based on their effectiveness in a social networking environment, I'd much rather use implicit social network data rather than deal with low response rate & terribly biased data from explicit surveys.
In short, OKCupid seems to have a much better source of data to achieve the goals common to both FriendlyRank + MyBestFace.
However, I seriously doubt whether the proposal will ever be enacted. There is just too much going against it. I do like that agent simulation is becoming wider known in the broader financial community as it finally gets us closer to acknowledging that financial instruments _are_ computation. And along with that association comes the tacit recognition that not everything is easily computable.
For a good introduction to the intersection of computability and economics, check out http://www.oxfordscholarship.com/oso/public/content/economic...
But the branch remains the number one channel for upsell opportunities. Banks are desperate to keep people walking into branches so that they can push more products on their customers. Brand apathy is rampant due to undifferentiated crappy products from the top banks, so they rely on branch upsells.
This is why more banks don't offer remote check deposit capabilities. If they did, they'd lose the sales channel.
We at banksimple figure that its better to just give you the product features that you actually want to use instead of relying on expensive sales channels to grow our customer base.
Of course, with the recent outbreak of spring weather here in NYC, I've been out and about instead of checking HN. But I'll follow this thread for any questions or comments that you may have.
The typical banking model of net interest margin (the amount earned by the difference in savings & loan rates) dominates revenue elsewhere. The American market, however, is so lacking in competition that they can get away with charging hidden fees and charges.
Sure, it helps if you check your balance. But do you read your full terms and conditions each time your bank changes them. I spent most of my summer reading the T&C's of every major bank account in America. You'd be very surprised by what they contain.
Here's a personal favourite of mine: most banks would retain the right to re-order your transactions in any 24 hour period before settlement so that withdrawals for large amount came before any smaller amounts, and then deposits were posted in reverse order. What this means is that if you were to start out the day with $100, then have a $2,000 check clear and post to your account, you could go out and make a purchase in the afternoon for $500 and _still_ get hit by an overdraft fee. And if in the morning you made a few $5 purchases, they would _also_ incur the $35 (median) overdraft fee, despite the fact that if the balance was updated in chronological order you would incur no such fee.
I say 'would' as this practice is being phased out. That said, overdraft fees, while expected to earn $40bn for banks in '09, are only about 7% of overall revenue. There are plenty of other tricks that banks have up their sleeve.
Falling back on the argument that banks are allowed to do whatever you agree to in your contract is intellectually and morally dishonest. No one reads their T&C's. Banks know this and use many invisible and often unavoidable fees to earn excessive revenue from unsuspecting consumers.
And even if you were to level the playing field in terms of fees and charges, banks are sluggish and don't grok what it means to have a good online experience. We are working on fixing this.
If you want to speak with us in more detail, track us down and we'd be happy to chat.
Even if you were able to acquire a bank, you'd need to go through much of the FDIC and OCC (assuming it is a nationally chartered bank) approval process. This is typically a time consuming process. Prior to the crisis this would take 18 months to 2 years. Currently the FDIC is making this more difficult and de novo banks forecast a 3+ year approval process.
In addition to the time constraints to starting a de novo (brand new) bank, you need to have regulatory capital in advance of opening. Off the top of my head you need to have enough capital to cover your expected three year deposits. So unless you have $50m lying around, it will be tricky.
That all said, there are ways to do this. If you'd like to know more about what we are up to, let me know.
Oh, and I totally agree. Banks suck. We are trying to fix that situation. We are 6 months into the process and hope to have something in the market by the end of this year.