Yesterday, BankSimple, the eagerly anticipated, socially conscious to-be-started bank, released the tool it is using to develop its application programming interface, known as API.
What this means is that not only will BankSimple offer an API, which allows other developers to build applications on top of whatever web service BankSimple offers, but BankSimple is actually allowing everyone and anyone to build the tool that can be used to build the applications.
This is as far as I know radically unprecedented in banking. I can recall some specific applications that allowed for such “social coding,” as it is called. But I cannot recollect a bank – or eventual bank, in this case – incorporating social coding on such a level. To me, this is a real sign on the part of BankSimple of not just radical foresight. BankSimple understands that it will only be as good – and as successful – as the people who use it. What better way to insure that the bank is used to maximum benefit than to effectively allow consumers to build its IT infrastructure?
Join the BankSimple coding effort here.
I am not sure if people really care for the exception based pricing structure – have they ever had a real alternative? I have been amazed by how many potential customers spontaneously offered to pay us a monthly fee in exchange for getting rid of the penalty fee structure. I’ve come to the conclusion that customers really want transparency and clarity in their fee structure, more than an absolute price level.
As you guys noted, the biggest problem with the API is compliance. However, there is precedent in the form of OFX feeds which many banks have offered in the past. Any standardized method of extracting data (even OFX) is better than the screen scraping via Yodlee/CashEdge/uMonitor that seems to be the industry standard today. The real compliance nightmares begin when you go beyond data extraction and start allowing operations through the API.
Unfortunately, things in banking never move quite as fast I want. We are however gearing up to get our first cards out early next year, and more announcements on our partnership structure and plans are in the works. Thanks for the continued support and encouragement guys.