BBVA purchased financial technology start-up BankSimple for $117m in late February. I came across this news on a couple of blogs I follow: Jim Bruene from NetBanker and Ron Shevlin from Snarketing 2.0. Both have insightful posts on this deal.
Jim Bruene’s post has a link to Bank Simple’s presentation at Finovate’s 2011 Fall event. This video incorporates a short demo of BankSimple’s interface. BankSimple’s proposition is a simple and easy to use internet only banking product. It is not ground breaking. BankSimple offers a neater internet banking platform than most other banks. Some features are:
- A single interface for all products
- Natural language search capability for transactions
- Use of geo-spatial data and machine learning to better categorise and clean transactions.
In my view, BankSimple has taken some of the technology that is common place in e-commerce and search engines and incorporated it into a net banking platform. I can see most banks adding these features to their net banking platforms in the near future. As Ron Shevlin notes, the technology and the size of the deal would not qualify BankSimple as a major disruptor.
The fact is that BBVA paid $117m for something they could have built on their own for less. This is around $1200 per customer. Many commentators have speculated on why. Perhaps the value of brand, or to acquire the team that created Bank Simple. There is plenty of debate on the blogosphere on whether this was a good deal.
For me, this transaction highlights the growing focus on providing a seamless banking experience from both customers and banks. On one hand BankSimple had 100,000 customers who had consciously shifted from their current bank in search of an easier banking experience. On the other hand, BBVA felt it worthwhile to spend $117m to pick up BankSimple.