Two years ago, Josh Reich, CEO of the web-only retail bank, BankSimple, decided he was done banking with Chase.After paying his bills, his account was overdrawn since the bank had put them through twice. And because his credit card was charged to cover the loan, the bank was racking up interest, thanks to the 19% APR.
Several frustrating phone calls, transfers, and broken promises later, Reich was convinced of two things: 1. Customer experience matters, and 2. Traditional banks suck.
For the two or so weeks Reich endured this ordeal, he had zero dollars to his name and was unable to make other payments. It wasn’t much comfort that the bank was collecting on interest, or that every time Reich called to follow up on his requests, he’d get passed around various “fiefdoms” only to be told to wait another four to five business days to have the issue resolved—which happened twice.
“Luckily I had cash on hand,” he mused on his blog.
Reich was burned by the fallout, much like consumers were last week when Bank of America announced yet another round of fees to go in effect next year. Not long after the incident, Reich sent his friend, Jerry Neumann, a venture capitalist, an email with the subject line, “Let’s start a retail bank.”
Today the New York startup is the toast of the blogosphere, giving anxious consumers a glimmer of hope and traditional banks something to worry about besides finding swipe fee loopholes in the Dodd-Frank Act.
As the highly anticipated bank prepares its launch—it’s currently in beta testing—we thought it’d be fun to compose a “Dear John” letter to banks, letting them know exactly how we feel about their shady practices and why BankSimple’s looking a lot more attractive these days. And since no one thinks traditional bricks-and-mortar banks suck more than Reich—”our core brand value is ‘Don’t suck,'” he once told Fast Company—we figured he’d be the man to bolster our argument.
Read on for Reich’s take on what’s wrong with banks today—and how BankSimple hopes to one-up them.
Dear Traditional Banks,
You suck and I want to break up.
I know, you never thought it would come to this, but it has for a couple reasons. First, we don’t even talk anymore. After you hooked up with a bunch of other banks in the 70s and 80s, it just hasn’t been the same. You changed your look, repainted your branches, and didn’t even do anything to change your underlying infrastructure, which hurt me, your customer, more. Everything got really complicated and your customer service started sliding as a result. One minute I’d be trying to work out my mortgage, and the next I’m being passed on to a credit card “expert” who doesn’t know why he’s taking my call.
But with BankSimple’s fluid online technology, perhaps I might be able to get what I need in one place. I could ping someone on Skype, send a quick email, or call and speak to a real live person—not a recording.
Second, I think we want different things. I’m tired of being gouged at the ATM—just because I’m your customer and you’re pissed about Dodd-Frank and the Durbin Amendment doesn’t mean I should pay a $12 service fee to keep my checking account open or get dinged with overdraft charges just because you pulled a Macgyver and re-ordered my transactions all wocky (from highest to lowest amount spent, as opposed to the date they were made, according to SmartMoney).
BankSimple features a “Safe to Spend Balance” that shows what I can actually spend, and because the bank partners with “back-end banks” as opposed to handling the cash itself, I can deal with my debit card, checking, and saving accounts all in one place and not ever pay fees.
Also thanks to the beauty of search and a sleek site that resembles a Tumblr page more than a clunky Web 1.0 castoff, for once maybe I can stop playing Columbo and figure out what is happening to my money.
Maybe the move will be better for both of us. You certainly don’t seem to care whether I stay or go.
Business Insider Emails & Alerts
Site highlights each day to your inbox.