Real Simple Banking: Commodore Vanderbilt in a Brooklyn Basement

He was sent to the home equity group because the problem also involved mortgage payments. “It took them three fucking weeks,” he said in another interview with The Observer last month. “At the end, they sorted it out and said, ‘Yeah. It happens all the time.’” Over December and January, the first version of BankSimple was built.

 

THE PAIR DOES NOT HAVE warm feelings for most online banking. “You have all these really little pain points that are fundamentally caused by just crappy technology,” Mr. Reich said. “So we wanted to fix the technology that impacted customers’ lives, and that was the online experience, and that was the customer service.”

For starters, there won’t be overdraft fees: The bank will automatically draw down savings, or extend credit, if a balance is exceeded.

More importantly, the Web site will look like, say, a very painless Tumblr page. On the other hand, he said, signing up at Bank of America “drops you back to like 1993″; Ally takes way too long; and the online bank PerkStreet has a gorgeous home page to click on, “and then as soon as you interface with the technology, it really hurts.” Community banks have their heart in the right place, he said, but can have even more problems with technology than the big ones. What he likes best is something like ING, although it’s not quite meant for daily banking (and was hobbled during the financial crisis). He’s even unhappy with kinks in the bill-payment system at USAA, his favorite bank. “It’s that pang,” he said, grabbing his chest. “Eh!”

A revised demo version of the BankSimple site will be ready around July for the next round of fund-raising, but the history of financial Web start-ups is not good. A recent pair of Fast Company stories about the fallen ones reads like a joke dictionary: There’s Buxfer, FiLife, Geezeo, Rudder, Thrive and Wesabe; even the shining star, Mint, the financial management Web site, has not had any good swell in unique visitors since it sold for $170 million last year.

Still, in the midst of financial regulation, it could be good to be new. When the Senate lowered the fees that merchants pay to process debit transactions, for example, the general take was that banks might make up for any lost revenue by stripping away perks and inserting new charges. “They’ll move away from fees people don’t notice to fees that people do notice,” Jerry Neumann, the new bank’s first serious investor, “and that will be good for BankSimple.”

Mr. Neumann, the former managing director of Omnicon’s interactive media investment wing, was given the title of chairman. “I invested on two guys and a PowerPoint. Actually, I’m not even sure that they had a PowerPoint,” he said. “The thing I like about it is, these guys really want to change the world.”

Still, he had known Mr. Reich for a while; Mr. Payne had not. “A friend of mine, another techie dude out in San Francisco, tweeted-appropriately-a link to what Bank Simple was doing,” he said. “In the last few years, for the first time in my life, I had a need for a decent bank. I hadn’t been living paycheck to paycheck. And I hadn’t been satisfied with my current bank.”

He emailed a request for a BankSimple invitation. The pair has been responding to them personally, but they’re in the thousands, so it takes a while. It was Mr. Karkal’s turn to write back, and he said to say hello if he ever wanted to. Mr. Payne replied that he knew a lot of tech types if they had a need for them. Mr. Reich got in touch a day later. 

“Everyone has been really enthusiastic, much more enthusiastic than when I signed on at Twitter, actually,” he said. “No one has said, ‘I absolutely love everything about my bank. And you’re an idiot for going to work on this.’”

What they have said, especially on techie Web sites that announced his move, is more traditional. “I’m sorry, but I want my bankers to be grave old men in suits,” one commenter wrote. “I also want my bank to have offices all over the world and I want to know that they are handling money many hundreds of times larger than whatever I have.”

“It’s funny, you know,” Mr. Reich said. “You’d think that the large banks would have just all the trust in the world for their long history, going back to the robber barons or whatever. And they haven’t done a very good job of that.”

mabelson@observer.com