Last Updated May 18, 2010 5:21 PM EDT
Imagine, for a moment, a bank that doesn't suck.
A bank that doesn't gouge you with fees. A bank that doesn't treat you like crap. A bank that cares about design, but gets out of your way. A bank that puts your money to work automatically. A bank that's building a platform for the future of personal finance.
I've imagined that bank, usually while on hold with my current bank after they've screwed something up. I want to be a customer of that bank.I'll meet you at the barricades, comrade. Payne announced yesterday (via Twitter, natch) that he was quitting the microblogging firm to join BankSimple as co-founder and CTO. The challenge: Building a "social" bank.
I'll frankly admit I have no idea what that is, having far more experience with the antisocial variety. But clearly Payne and his cohorts Josh Reich and Shamir Karkal, whose backgrounds are in finance and technology, respectively, hope to channel bank customers' angst in dealing with their financial institutions.
BankSimple remains in beta, so we can't assess the company's products. Some experts, however, are skeptical -- such as, for instance, Jacob Jegher, an analyst with financial consulting firm Celent:
Does their idea sound great -- absolutely. Is it as simple to pull off as they make it sound? Not even close. Startups consistently underestimate the requirements of jumping into the banking space.... Banksimple.net has lofty goals. It sounds like Nirvana and I'll believe it when I see it.For now, BS (sorry, guys, didn't your branding gurus warn you?) says only that it will offer what other banks don't: honesty and freedom from the sort of unnecessary features aimed at sucking you dry. On its blog, the firm accuses companies like Captal One (COF) and JPMorgan Chase (JPM) of introducing services that no one wants or needs.
Chase recently launched their Sapphire card in direct competition with the American Express brand. To establish this as a premier brand, they ran a gracefully crafted television campaign. Ads shot in black and white, with an attractive and financially successful looking middle-aged white couple. The ads talk about the product features (rewards, customer service), but sell the viewer a particular lifestyle. "If you bank with Chase, your life could be like this."
No. Banking with Chase will not make you look good in an open backed dress. I just want a bank that cuts the crap and gets out of the way.Not to quibble, but not banking with Chase won't make me look good in an open-backed dress, either. But of course BankSimple has a point. Like many big consumer-oriented companies, banks paint lots of pretty, and utterly inane, pictures in hopes of getting you to sign on the dotted line.
Then again, isn't the kind of grassroots "authenticity" that BS, or Twitter, for that matter, peddles itself a pose? After all, if Payne had really wanted to avoid the hype, he could've simply tweeted his departure from Twitter without using it as an opportunity to promote BS. And perhaps the banking company wouldn't fine-tune its sloganeering to the kind of customer it presumably hopes to attract: younger, tech-savvy, irreverent.
That's slightly petty of me, I know. But I'm not sure why viral marketing, along with its myopic fixation on branding and other forms of online uplift, is any more attractive than the usual TV pandering to "financially successful looking middle-aged white couple[s]."
If corporate pitch-lines such as Citigroup's (C) "Live Richly" are nothing more than soulless come-ons targeting its demographic of choice, so are declarations by plucky startups to "not suck," as BS defines its mission. (I might add that for a business, not sucking is a fairly low standard to aspire to.)
There's also something disingenuous in suggesting that it's impossible today to find a bank that doesn't "gouge you with fees" and "treat you like crap." It's not so hard -- try your local community bank. By and large, these institutions dish up basic, crap-free service. And if you like the occasional smile with your service, you can actually pop by the branch and speak to someone, which you presently can't do by clicking a mouse.
"The banking highway is littered with alternative banking models that have been tried over the years, but the main driver of consumers to banks is convenience of location," said independent banking consultant and economist Ken Thomas in an email message. "Since most customers have multiple bank relationships, they may use an Internet bank... for a good rate on a CD, but their main relationship is usually a walk-up, personal one with a banker."
Thing is, I'm curious to see what BankSimple comes up with when it launches later this year. Consumers need choices, and it's certainly true that rampant consolidation has allowed a handful of big banks to dominate the industry. Here's to not sucking.
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