Finextra held court for a much viewed Twitterview yesterday with soon-to-be launched US retail bank, banksimple.
Once launched, banksimple plan to offer individual deposits to US customers as well as small amounts of credit. There will be no branches and no hidden or complex 'fees' because "Banks can make plenty of money from net interest margin & interchange, aka
Old Fashioned Banking, especially without branch costs."
This Twitterview had a lot of audience participation and interest. Finextra HQ were excited to see involvement from the Huffington Post and from uber-blogger Felix Salmon of Reuters, as well as our own Paul Penrose.
For the sake of 'simplicity' the following transcript, for those of you Twitter-adverse who didn't follow the
#finxlive hashtag yesterday, this is the Q&A between banksimple and the Twitterview audience.
You can view the
Twitterview transcript between Finextra and banksimple here.
Some of the Tweets have been combined or modified (very slightly) to ease reading (trust me I'm a journalist).
@felixsalmon on a scale of one to evil, how do community banks compare to Wells/Chase/BofA/Citi? What about credit unions?
banksimple It's hard to be evil when you have strong roots in customer support and ties to the local community. Big banks grin f*ck us all
@omniprasan What are most common way Big banks use the 'Caveat Emptor' and how are you differentiating yourself?
banksimple Banks give retail customers highly complex financial products, but have no tools or education to help them.
Finextra But aren't you arguing that by not offering those tools and education it brings in more profits?
banksimple Yes, by not helping the consumer, banks earn short-term profits . If we had true competition, this wouldn't fly.
@jny2 Why can't community banks organize and push for regulation that would require big banks to play nice?
banksimple Elizabeth Warren is trying, but with 41% of deposits controlled by the top 4, its hard for the others to fight back.
@felixsalmon will you use your customers' detailed spending data to send them customized offers from retailers? If not, why not?
banksimple We hate spam. But other business have shown us that people like getting deals. It's a fine line & we tread carefully. In short, we might. But not from day one. Day one is about fixing what's wrong with the current banking experience.
@paulpenrose Banking is a commodity. Differentiation breeds complexity. It's a zero sum game = evil banks. What's banksimple's USP?
banksimple We're a bank. We don't suck. Not sucking is our USP. But we think complexity currently exists to confuse the customers. Simplicity is our core selling point.
@HuffBusiness How do you think our notions of what a 'bank' actually is have become distorted? And why did it happen?
banksimple In 140 characters :) Banking should be dead simple. Fee revenue led to greed justified by nonexistent complexities.
@eparillon arguably part of turn to fee income was competing away of deposit margins. Any take on what your approach would be?
banksimple But at the same time, costs have dropped dramatically due to technology. Banking is highly scalable on current margins & net interest margin is lower in Europe + Asia, yet they have lower fees. What happened to efficient capital markets?
@tek_fin What is your take on external PFMs such as Mint. Do you intend to have your own PFM/portal, or will you rely on them only?
banksimple External PFMs would be great if banks shared the right data with them. As it is they are handicapped... PFM's struggle to do basic double entry book-keeping, which isn't sexy, but is necessary to make good recommendations.
@omniprasan What are your back up channels? How do you plan to handle 'internet' outages?
banksimple Across Internet, ATM network & phone, our uptime should be fine.
@tek_fin So you will have your own version of PFM/portal for your users?
banksimple Yes. With proper accounting & full consideration for financial service terms & conditions, not just headline rates.