Nice piece on the NYT home page today for Simple.com. They quickly zero in on this main question: Can Simple get people to switch their banking relationships? Nobody likes their bank, but getting off your behind and doing something about it seems like a risk.
While I certainly agree that this is the main hurdle from a customer perspective, I also think switching isn’t as scary as they make it out to be. Younger people’s financial relationships aren’t all that complicated to begin with and re-doing your bill pay list seems like a small price to pay for a bank you might actually like. After all, you deal with them on a daily basis. Plus, trying out the Simple.com service before moving your entire relationship there is quite easy.
The more interesting question to me seems to be in Simple’s business model. Can they really make enough money just off the interest rate spread (especially in a near zero interest environment) and off interchange fees that have been capped by Dodd Frank? It doesn’t feel like enough. But if they take the long term view and build a business model off a profitable relationship rather than a profitable product, well that would be the most disruptive thing of all.
