Though Simple Finance Technology Corp.’s BankSimple has yet to launch, it is becoming an early adopter with the technology it uses to open accounts and vet new customers.
The New York-based company promotes BankSimple as a worry-free alternative to the traditional bank. Simple Finance is one of the first companies to use a software-development kit from Andera Inc. of Providence, R.I., to design its own account-opening process, Andera’s chief executive Charlie Kroll says.
The kit provides a consistent user experience on the front end while, on the back end, Andera searches multiple databases of credit and identity records, Kroll says.
Account verification is frequently an alienation point for customers when they submit an application online, experts say.
“Andera’s software development kit … does not redirect customers to an external site, and this minimizes consumer attrition, which is always a concern with banks of this kind,” says Julie Conroy McNelley, a senior risk and fraud analyst at Aite Group LLC.
Andera’s fraud-detection network continuously searches for fraudulently opened accounts across its base of customers.
“They want to make sure this process is smooth,” says Jacob Jegher, a senior analyst at Celent. “They will also leverage the risk management competencies of Andera.”
Simple Finance also announced Aug. 10 that it will provide its customers with access to Cardtronics Inc.’s network of 43,000 Allpoint-branded surcharge-free cash machines.
Simple Finance, which plans to offer Visa Inc. debit cards, expects to launch BankSimple following a six-week test in October.
Simple Finance further announced $10 million in additional financing from IA Ventures of New York and Shasta Ventures of Menlo Park.
In 2010, Simple Finance reportedly raised venture financing of more than $3 million from a consortium of firms, which also included IA Ventures. The latest funding will let Simple Finance build its customer service organization, says its co-founder and chief executive Josh Reich.
“One of the biggest challenges of bringing customers on board online is the account-opening process,” says Reich. “Each bank has its own set of identification verification procedures … and this lets us integrate with a single provider that lets us meet the ‘Know Your Customer’ requirements of the multiple bank partners.”
In June, Simple Finance announced partnerships with The Bancorp Inc. of Wilmington, Del., to issue debit cards and with CBW Bank of Weir, Kan., to hold customer funds (
So far, Simple Finance has tested its debit cards internally with 27 employees. Reich says its credit card processing system tracks the zip codes of purchases. This information will be used to provide offers online.
Reich says customers will be able to query the online banking service to show them where they made their purchases, and where they can make comparable purchases with vendors who might offer better prices.
In March, Simple Finance announced a partnership with TX Via Inc. for processing debit card, online bill payment and automated clearinghouse transactions (
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