<html><head><meta http-equiv="Content-Type" content="text/html charset=windows-1252"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space; "><div><br></div><div><div class="singleAd" id="TopAd" style="margin-top: 1px; clear: both; padding: 5px 0pt; text-align: center; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: rgb(211, 211, 211); "><div class="clearfix"><div style="font-family: Arial; font-size: 10px; color: rgb(0, 66, 118); float: right; margin-right: 125px; "><a href="http://www.nytimes.whsites.net/mediakit/" style="color: rgb(102, 102, 153); text-decoration: none; ">Advertise on NYTimes.com</a></div></div></div><div id="main" style="border-top-width: 1px; border-top-style: solid; border-top-color: rgb(255, 255, 255); clear: both; margin-top: 15px; padding: 0px 0px 7px; "><div class="spanAB wrap closing" style="background-image: url(http://graphics8.nytimes.com/images/layout/vertical_rule.gif); padding-bottom: 10px; background-position: 617px 50%; background-repeat: no-repeat repeat; "><div id="abColumn" class="abColumn" style="float: left; display: inline; overflow: visible; margin-right: 1px; width: 617px; "><div id="article"><div class="columnGroup first" style="width: auto !important; margin-bottom: 12px; clear: both; margin-right: 7px; margin-left: 10px; color: rgb(51, 51, 51); font-family: georgia, 'times new roman', times, serif; font-size: 12px; line-height: 18px; text-align: left; background-color: rgb(255, 255, 255); position: static; z-index: auto; "><h1 itemprop="headline" class="articleHeadline" style="margin: 0px 0px 8px; color: rgb(0, 0, 0); font-size: 2.4em; line-height: 1.083em; font-weight: normal; "><img id="d977b6a6-f70b-4b3d-a05c-ceab4e2e54cf" height="18" width="122" apple-width="yes" apple-height="yes" src="cid:B736FE30-5830-4C50-9759-30887C0EC384@att.net"></h1><h1 itemprop="headline" class="articleHeadline" style="margin: 0px 0px 8px; color: rgb(0, 0, 0); font-size: 2.4em; line-height: 1.083em; font-weight: normal; "><nyt_headline version="1.0" type=" ">A Financial Service for People Fed Up With Banks</nyt_headline></h1><div class="articleSpanImage" style="width: 600px; margin-bottom: 8px; "><span itemprop="associatedMedia" itemscope="" itemid="http://graphics8.nytimes.com/images/2013/01/09/business/SIMPLE1/SIMPLE1-articleLarge.jpg" itemtype="http://schema.org/ImageObject"><img width="600" height="397" alt="" border="0" itemprop="url" itemid="http://graphics8.nytimes.com/images/2013/01/09/business/SIMPLE1/SIMPLE1-articleLarge.jpg" id="dedcfe8c-3cde-4fc9-ac8b-058540b59881" apple-width="yes" apple-height="yes" src="cid:DBAF8CFD-EF3B-4000-BDF0-8D9ECC01A9A6@att.net"><div itemprop="copyrightHolder" class="credit" style="font-family: arial, helvetica, sans-serif; font-size: 0.9em; line-height: 1.223em; text-align: right; color: rgb(144, 144, 144); margin-bottom: 3px; ">Steve Dykes for The New York Times</div><div style="margin: 0px; font-size: 1.1em; line-height: 1.2727em; font-family: arial, helvetica, sans-serif; color: rgb(102, 102, 102); ">Shamir Karkal, left, and Josh Reich, center, the founders of Simple.</div></span></div><nyt_byline><h6 class="byline" style="margin: 2px 0px; color: rgb(128, 128, 128); font-size: 1em; line-height: 1.2em; font-weight: normal; font-family: arial, helvetica, sans-serif; ">By <span itemprop="author" itemscope="" itemtype="http://schema.org/Person" itemid="http://topics.nytimes.com/top/reference/timestopics/people/w/jenna_wortham/index.html"><a href="http://topics.nytimes.com/top/reference/timestopics/people/w/jenna_wortham/index.html" rel="author" title="More Articles by JENNA WORTHAM" style="color: rgb(102, 102, 153); text-decoration: none; ">JENNA WORTHAM</a></span></h6></nyt_byline><h6 class="dateline" style="margin: 0px; color: rgb(128, 128, 128); font-size: 1em; line-height: 1.2em; font-weight: normal; font-family: arial, helvetica, sans-serif; ">Published: January 8, 2013</h6><div class="articleBody" style="margin-top: 1.5em; margin-bottom: 1.7em; "><nyt_text><div style="margin: 0px; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Like many people, Josh Reich got <a title="Blog post." href="http://blog.i2pi.com/?p=196" style="color: rgb(102, 102, 153); ">fed up with his bank</a> after it charged him overdraft fees and he endured painful customer service calls to fight them. But unlike most people, Mr. Reich, a software engineer from Australia, decided to come up with a better way to bank.</div></nyt_text></div><div class="articleInline runaroundLeft" style="float: left; clear: left; display: inline; margin: 6px 15px 10px 0px !important; width: 190px; "><div class="inlineImage module" style="margin-bottom: 12px; clear: both; width: 190px; "><div class="image" style="margin-bottom: 2px; "><div class="icon enlargeThis" style="padding-left: 16px; text-align: right; margin-bottom: 2px; background-position: 0% 50%; background-repeat: no-repeat no-repeat; "><a href="http://www.nytimes.com/2013/01/09/technology/a-financial-service-for-people-fed-up-with-banks.html?pagewanted=2&_r=0&nl=todaysheadlines&emc=edit_th_20130109&pagewanted=all" style="color: rgb(102, 102, 153); text-decoration: none; display: inline; font-family: arial, helvetica, sans-serif; font-size: 1.1em; padding-left: 15px; background-image: url(http://graphics8.nytimes.com/images/icons/multimedia/enlarge_icon.gif); background-position: 0% 50%; background-repeat: no-repeat no-repeat; ">Enlarge This Image</a></div><a href="http://www.nytimes.com/2013/01/09/technology/a-financial-service-for-people-fed-up-with-banks.html?pagewanted=2&_r=0&nl=todaysheadlines&emc=edit_th_20130109&pagewanted=all" style="color: rgb(102, 102, 153); text-decoration: none; display: block; "><span itemprop="associatedMedia" itemscope="" itemid="http://graphics8.nytimes.com/images/2013/01/09/business/SIMPLE2/SIMPLE2-articleInline.jpg" itemtype="http://schema.org/ImageObject"><img itemprop="url" width="190" height="156" alt="" style="border: none; " id="58353433-c099-4c75-bfa4-b8803e8d0fab" apple-width="yes" apple-height="yes" src="cid:790F524E-763A-4586-BB30-0507DEF03DAD@att.net"></span></a></div><div style="margin: 0px; font-size: 1.1em; line-height: 1.2727em; font-family: arial, helvetica, sans-serif; color: rgb(102, 102, 102); ">Simple</div></div><div class="inlineImage module" style="margin-bottom: 12px; clear: both; width: 190px; "><div class="image" style="margin-bottom: 2px; "><div class="icon enlargeThis" style="padding-left: 16px; text-align: right; margin-bottom: 2px; background-position: 0% 50%; background-repeat: no-repeat no-repeat; "><a href="http://www.nytimes.com/2013/01/09/technology/a-financial-service-for-people-fed-up-with-banks.html?pagewanted=2&_r=0&nl=todaysheadlines&emc=edit_th_20130109&pagewanted=all" style="color: rgb(102, 102, 153); text-decoration: none; display: inline; font-family: arial, helvetica, sans-serif; font-size: 1.1em; padding-left: 15px; background-image: url(http://graphics8.nytimes.com/images/icons/multimedia/enlarge_icon.gif); background-position: 0% 50%; background-repeat: no-repeat no-repeat; ">Enlarge This Image</a></div><a href="http://www.nytimes.com/2013/01/09/technology/a-financial-service-for-people-fed-up-with-banks.html?pagewanted=2&_r=0&nl=todaysheadlines&emc=edit_th_20130109&pagewanted=all" style="color: rgb(102, 102, 153); text-decoration: none; display: block; "><span itemprop="associatedMedia" itemscope="" itemid="http://graphics8.nytimes.com/images/2013/01/09/business/JP-SIMPLE-1/JP-SIMPLE-1-articleInline.jpg" itemtype="http://schema.org/ImageObject"><img itemprop="url" width="190" height="127" alt="" style="border: none; " id="7fef2988-1b6e-44f5-9175-797afced3679" apple-width="yes" apple-height="yes" src="cid:8ACE98AA-181B-4DD0-AE64-1BB2EDB9B10A@att.net"></span></a></div><h6 class="credit" style="margin: 0px 0px 3px; color: rgb(144, 144, 144); font-size: 0.9em; line-height: 1.223em; font-weight: normal; font-family: arial, helvetica, sans-serif; text-align: right; ">Steve Dykes for The New York Times</h6><div style="margin: 0px; font-size: 1.1em; line-height: 1.2727em; font-family: arial, helvetica, sans-serif; color: rgb(102, 102, 102); ">From left, Chelsea Hoffer, Erik Wasik and Kelly Behm work on an account at Simple</div></div></div><div class="articleBody" style="margin-top: 1.5em; margin-bottom: 1.7em; "><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Mr. Reich and a co-founder, Shamir Karkal, created <a href="https://www.simple.com/" style="color: rgb(102, 102, 153); ">Simple</a>, an online banking start-up company based in Portland, Ore., that offers its customers free checking accounts and data-rich analysis of their transactions and spending habits.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Few entrepreneurs dare to set their sights on industries as large and entrenched as banking and expect to flourish. But Mr. Reich, 34, a professed data nerd who has built computers and tinkered with the innards of sophisticated cameras, holds a master’s degree in business and has a robust background in financial data analysis. He is confident that Simple’s minimalist approach — it promises not to charge any fees for any services — will draw fans and customers.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">“Banks make money by keeping customers confused,” Mr. Reich said. “There’s no incentives to make the experience better.”</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Of course, inviting people to trust a start-up with their money is a lot to ask. The company, which began signing up customers late last year in a deliberately slow fashion, now has 20,000 and has processed transactions worth more than $200 million.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">It also has the backing of prominent venture capital firms including Shasta Ventures, SV Angel and IA Ventures and has raised more than $13 million. Simple has few, if any, direct competitors, although some services like <a title="Web site." href="https://www.smartypig.com/" style="color: rgb(102, 102, 153); ">SmartyPig</a> and <a title="Web site." href="https://www.mint.com/" style="color: rgb(102, 102, 153); ">Mint</a> offer analysis of bank accounts and financial transactions.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Simple is actually not a bank. It has deals with CBW Bank and Bancorp, federally insured banks, to hold its customers’ money.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">And it has built slick apps for the Web and mobile devices to give customers an overview of their accounts and transactions. But it encourages customers to treat it as a bank, closing their more traditional accounts and only using Simple.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">The company’s biggest challenge, banking analysts say, will be to persuade people to give it a try.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">“It is extremely difficult to get consumers to change and leave their banks,” said Jacob Jegher, an analyst at Celent, a research and consulting firm. “Plus, although they are not a bank, they still operate like a financial institution, and they will face challenges that big banks have decades of experience with.”</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">After the financial crisis, smaller community banks and credit unions gained customers eager for alternatives to larger corporate banks. Experts say Simple could attract those customers as well.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Early adopters are warming to the service; during a speech last fall at a conference aimed at technology enthusiasts, designers and creative people, Mr. Reich asked how many in attendance were Simple customers. A majority of the crowd raised hands.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Mr. Reich said Simple was keeping its first group of customers small to allow it to work out any kinks. (Already there have been some flaws, like one that briefly locked several users out of their accounts in November.) At this stage, those who want a Simple account have to request an invitation on its site, though these are handed out fairly liberally to those who meet the minimal qualifications of Simple and its bank partners.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Customers receive a plain white card that can be used like a debit card. The company offers most traditional banking features, like direct deposit and money transfers. But there is plenty it does not offer, like joint or business checking accounts, or paper checkbooks, which may be a deal killer for some.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">The start-up does not have physical bank branches or automated teller machines, nor does it plan to build any. As a result, Simple customers cannot make cash deposits and must rely on the Internet and phone for service.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Simple tries to make up for what it does not have with modern software design and data analysis.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Each Simple transaction is tagged with detailed information that allows customers to search their accounts with plain English commands like “Show me how much I spent on meals over $30 last month,” or “Show me how much money I spent on gifts in December.”</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Customers can see transactions plotted on a map or search for all transactions in a particular state or country, something that would be difficult with a traditional bank account.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">“Banks throw out a lot of data,” Mr. Reich said. “There are 80 fields of data per transaction, and banks only show you a few: the dollar amount, the place and the date. We can use much more than that to let people have real-time financial data.” The general approach is intended to appeal to technically adept people who are tuned into the rising interest in analyzing one’s personal data and behavior, as captured by tracking tools like Nike Plus and Jawbone’s Up bracelet.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">In the same way that such tools can help people learn more about their physical activity and how many hours a night they sleep, Simple hopes to offer insights into spending behavior.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Simple will have to expand to survive. It makes money by earning interest on the cash it carries and from interchange fees, which it gets from each swipe of the card. It will require a large enough base of deposits and customers to cover its costs.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">And there is always the risk that Simple’s greatest advantage — its data tools — could be copied by competitors, Mr. Jegher, the Celent analyst, said: “Can they get to critical mass before banks catch up with their own digital tools to offer a competing experience?”</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Some of Simple’s early users are big fans, like Chris Lanphear, 30, a Web developer in Fort Collins, Colo., who signed up in July.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Mr. Lanphear said he had been hesitant to try Simple at first because of the company’s lack of physical infrastructure, “but then I realized it doesn’t ensure better service if you see the face of the person you are talking to.”</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">He said he had been impressed with Simple’s quick responses, via phone and e-mail, to questions about transactions and charges. The tracking features helped him realize he was spending too much on dining out, so he decided to cut back.</p><p itemprop="articleBody" style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); ">Mr. Lanphear was impressed enough to move over to Simple and close his old bank account. “I figured it couldn’t be worse than the alternatives,” he said. “But it’s actually turning out to be much better.”</p><div><br></div><p style="margin: 0px 0px 1em; font-size: 1.5em; line-height: 1.467em; color: rgb(0, 0, 0); "><nyt_correction_bottom></nyt_correction_bottom></p><div class="articleCorrection" style="margin-bottom: 2.8em; "></div><nyt_update_bottom></nyt_update_bottom></div></div><div class="columnGroup " style="width: auto !important; margin-bottom: 12px; clear: both; margin-right: 7px; margin-left: 10px; color: rgb(51, 51, 51); font-family: georgia, 'times new roman', times, serif; font-size: 12px; line-height: 18px; text-align: left; background-color: rgb(255, 255, 255); "><div class="articleFooter" style="margin-bottom: 16px; "><div class="articleMeta"><div class="opposingFloatControl wrap"><div class="element1" style="float: left; "></div></div></div></div></div></div></div></div></div></div></body></html>