New Bank Startups
When the Dodd-Frank bill forced major banks to cut back on the debit fees they charge merchants, many found other ways to combat the decrease in profits by charging customers instead. For the most part, the intense regulations of the banking world has kept non-bank competitors from the scene. But one new startup may be changing this.
A New York Times article detailed the invention of “Simple,” a tech startup that a former financial data professional created, with all the basics of a bank but none of the fees, when frustrations with his/her own bank grew too significant. Simple offers free checking accounts and provides members with a Visa debit card, and deposits are insured by CBW Bank and Bancorp.
There are quite a few limits for those who keep funds in a Simple account. There are no ATMs or branches, so funds must be deposited online.
But a major advantage Simple has is its transaction details, which tags the nature and location of each transaction, giving the service a more personal feel. Users can see a map of where they spent their money, and how much was spent at restaurants, coffee or transportation. While other online applications also offer some form of financial trends, few are actually attached to a bank account, giving Simple no real competitors.
Most users of Simple have other FDCI-insured bank accounts as well, although the article notes that some are closing those and relying only on their Simple account.
To stay competitive and offer customers similar nuanced info, banks may want to use software, such as case management software to keep track of customer’s histories and expectations when banking.
By using software to better appeal to customers, larger banks and other financial institutions can use Simple’s advantages to offer specific personalized service to retain customers.