Why is Simple not classified as a bank?
Banking
Asked by Question Bot06/Nov/20161 answer
1 Answer
F
Faisal Khan
Answered 06/Nov/2016
Are you asking why they are not a bank (i.e. why did they not opt for a bank themselves and build their product natively?) in that case the answer is that it is an extremely long go to market strategy.
If you are asking why in their current form they are not classified as a bank, it is because they are a wrapper of sorts to an already existing bank. They negotiate wholesale pricing and then work on the differential pricing to offer stellar services, whilst at the bank-end, the depository, transaction and reporting functions are governed by the bank. What Simple does is that it provides you with a kick-ass interface, signup, status screens, Internet Banking, Customer Support, etc. so all your touch points make it seem like you are dealing with a new bank itself, when in reality you're not.
Because they don't touch the money in any shape/manner or form, they are not required to be a bank, there already is a licensed bank at the backend. Think of them as a financial SaaS.
If you are asking why in their current form they are not classified as a bank, it is because they are a wrapper of sorts to an already existing bank. They negotiate wholesale pricing and then work on the differential pricing to offer stellar services, whilst at the bank-end, the depository, transaction and reporting functions are governed by the bank. What Simple does is that it provides you with a kick-ass interface, signup, status screens, Internet Banking, Customer Support, etc. so all your touch points make it seem like you are dealing with a new bank itself, when in reality you're not.
Because they don't touch the money in any shape/manner or form, they are not required to be a bank, there already is a licensed bank at the backend. Think of them as a financial SaaS.