Betabeat has a new internet bank to dote on now that BankSimple has abandoned us for the City of Roses. Movenbank is a New York-based personal banking service that uses near field communication–the same technology as Google Wallet–to remove the cards and the wallet from banking transactions and replace them with your phone. Founder Brett King, an Aussie based in New York and London, rode the success of his book, Bank 2.0, and his experience with his boutique consultancy firm User Strategy, to start up a bank with “No paper. No plastic. No hidden fees.” The bank is launching its first product, a Mint-esque personal finance profile based on social data, on October 1 and plans to roll out the financial services over the summer.
Alpha users can sign up for Movenbank with Facebook and turn over the keys to their Twitter accounts, Klout scores and other sites where users maintain a rating of some sort; customers will not connect their bank accounts until later in the company’s development. Eventually, Movenbank will look at factors such as social connections in order to determine who gets a credit line.
“Think of it as a product like foursquare or Klout initially, but around your financial life,” Mr. King said. “Wherein a typical bank might say–you come to them, and you say you want a credit card–and you’re a customer with a score of say 580, the bank’s going to say ‘no, you’re marginal, you’re too high-risk.’ But we might give them a card based on other things. Say they have 10,000 friends on Facebook and Twitter. We’ll say okay, they have high influence–we should probably pay this guy to get access to his friends list!”
Movenbank raised “quite a big funding round” from an Asia-based investor about a year ago, Mr. King said, and has eight full-time employees in its Midtown office as well as part-time and contract workers in the U.K. and Asia. They decided to go with NFC because “clearly that’s the way things are going to go,” Mr. King said. Bank of America is installing 18 NFC-enabled ATMs in New York and Citibank is also implementing the technology “on a fairly large scale,” he said.
Betabeat noticed that Movenbank’s blog is rife with mentions of its more famous and now West Coast-based cousin, Banksimple–a surprise since startups often like to pretend their competitors don’t exist. “My pals at BankSimple soft launched their debit cards internally for their staff this week, which is big news because it signifies the acceleration of the big shift in the BANK 2.0 landscape,” Mr. King wrote on Sept. 20.
The BankSimple launch is significant for a number of reasons. First of all, when was the last time you heard of a new bank having 50,000 customers signed up or registered before the bank launched?? Secondly, the fact that BankSimple doesn’t have a banking license of their own, is no hindrance in offering better banking service today. Lastly, if you are going to change an industry, be prepared for some resistance.
“We’re big fans of what they’re doing,” Mr. King said. “From our perspective the more reform that takes place in this space the better. We’re creating a new mode of banking so it’s actually in our interest to work together in that rather than be strong competitors … if Banksimple is successful that adds credibility.”
Movenbank is still negotiating with partner banks who will power the financial backend, the same way Banksimple works. The company has a few thousand subscribers signed up, Mr. King said.
Movenbank and Banksimple might be considered allies in a fight to disrupt the personal banking industry. Both startups have run into the same problems with an entrenched and unpopular system–both originally wanted to charter their own banks, but found the process too time-consuming, complex and uncertain. Movenbank, which just started building a product in the beginning of this year, can look to Banksimple for some of the challenges it might face ahead: the (now) Portland-based company’s launch dragged on as it struggled with the pressures of its ambitious task, losing its lead engineer in May, which was around the time it was supposed to launch.