Here’s one of those great ideas whose main barrier is sadly regulation. Two business school friends, outraged by tricky bank fees, have simply decided to launch their own bank — BankSimple, in Brooklyn.
The idea? A bank where you just store your money, without fear of fees, and with easy web access. Basically, they’ll do away with the banking complexity which most of us only use 1% of the time, if ever.
They’ve already brought Twitter co-founder Alex Payne on board and I tell you this: if Shamir Karkal and Josh Reich are successful, I could probably be an early customer:
“The idea of starting it came from the realisation that banks in America make money by keeping their customers confused,” Reich said at the offices of BankSimple, as the product of that inspiration is known. “We realised that there was a business opportunity there.”
Less than a year later, Reich and his partner, Shamir Karkal, are trying to raise $3 million from venture capitalists to fund their vision.
The pitch is straightforward. A bank with no fees or branches, where all the emphasis is on creating a user-friendly electronic home for all your finances.
We can imagine most Americans would prefer a basic bank where money is simply stored and safe from fees over the complex service offerings most large institutions offer. Most people just need a place to keep money which beats their mattress, yet many large banks fail to achieve even this humble goal given that they hit you with all kinds of fees.
Thus starting this business should theoretically be easy… except for the fact that this start up is trying to enter the regulatory jungle of American banking. There’s a reason why you don’t see too many garage start-ups in retail banking. I’ll nonetheless be rooting for BankSimple’s success.
And here it is — Banksimple.net.