Where have all the cowboys gone? In her 1997 hit, Paula Cole laments the decline in down-to-earth, working-class, relatable romantic options.
Today we look at the loss of a cowboy in banking. Fintech startup Simple has been sent off along the old dusty trail by acquirer BBVA. As the sun sets on this tech-based maverick, we find some lessons for your human-centric community bank.
Simple was founded in 2009 and became one of the first fully-digital banking challengers to achieve any real traction, paving the way for the current generation of fintechs and neobanks.
Simple was conceived to simplify banking. In their words (from their site), Simple was the response to these questions:
- Why is banking so complicated?
- Can a bank exist to help people, not confuse them?
- What if banks didn’t charge so many ridiculous fees?
- What if your bank taught you to feel confident with money?
In 2014, BBVA purchased Simple to “accelerates its digital banking expansion,” according to a press release announcing the acquisition. The $117 million acquisition brought 100,000 customers. BBVA allowed Simple to function almost autonomously, until now.
From the bank-peer peanut gallery, there were cheers, and there were jeers. Simple’s original customer base cried foul.
The commentary fell into two categories:
- I told you so! One group will have you believe they predicted this. They say the world never needed a Simple anyway—that any success it enjoyed was a fluke. In their eyes, Simple amounted to nothing more than a trendy, gimmicky, millennially frivolous competitor.
- This is why we can’t have anything nice! Another group attributed Simple’s death to corporate greed crying, “the big guys will always crush the little guys. Customers will never get what they want!” BBVAs sunsetting of Simple was another example of classical corporate neglect of the client’s needs and experience.
I’d suggest the narrative isn’t so simple as big vs. small, the establishment vs. innovation, or the past vs. the future. This is not a conversation strictly between megabanks and fintechs. Nor does this event score points for the “See? No one wanted an online-only bank” crowd.
It might seem strange, but community banks have the most to learn here—why they should listen to their customers and why they must remain stalwart in maintaining independence.
First things first
This announcement is likely tied to another acquisition: PNC’s purchasing of BBVA’s US-based assets. If so, Simple’s shutdown is a byproduct of consolidation and the expected skinnying-up that comes with any acquisition—a cost-cutting measure to ensure profitability.
Even without this acquisition, one has to wonder how Simple looked on BBVA’s balance sheet. As of October 2020, more than 35.6 million of BBVA’s 56+ million active customer base were considered “digital customers.” Compared to Simple’s 100,000 customers, it’s pretty easy to build a speculative business case where Simple simply didn’t make sense.
For those who say, “…But Simple brings a better experience!” Well, that’s not the case. As of this writing, the Apple App store rating for Simple’s app is 4.6 stars while BBVA’s is 4.8 stars with 284.8 thousand reviews (more than 17-times Simple’s).
All of that being said, this is big-bank-scale stuff. No community bank I know would scoff at 100,000 customers. And according to the backlash following the announcement, they’re 100,000 loyal customers—not trend-chasing transients as popularly assumed about the digital sect.
It’s not about tech.
Simple grew from zero to 20,000 users between its founding in 2009 and 2012. Between 2012 and 2014, that number skyrocketed fivefold to 100,000 users.
Why?
Simple was pretty. Simple was focused. Simple was simple.
But most of all, Simple was different.
Being different isn’t enough. If they never told anyone—never got any press—it’s hard to believe they would have enjoyed the same growth.
Simple realized their difference and communicated this difference beautifully, clearly, and with an adequate budget.
Simple positioned themselves as the solution to well-known industry woes. These were tropes that clients and banks alike took as status quo and unchangeable.
This isn’t about creating a great app. It’s not even about scale. It’s about providing something your customers can’t get from megabanks.
Community banks have been doing this for years. They just forget to tell people.
Instead of comparing your community bank to a big bank, you must work to define your own metrics of success and reframe the customer’s perception to help them understand why your success is better for them than big bank success.
That’s what Simple did. Now, those who sought out Simple’s experience will be without a bank.
While you might not be a high-tech whiz-bang bank, you must consider Simple’s story as you consider your bank’s future.
You must consider this key question: If YOUR bank didn’t exist, what would my customers be missing?
Where have all the cowboys gone?
“Where have all the community banks gone?” might not cut as poignant a refrain, but remember, the cowboy didn’t go away due to our culture’s lack of love for the archetype.
The story of Simple turns on this question: Do enough people value what’s good over what’s expedient and widely available?
The answer seems to be Yes.
Simple’s core group of customers—those who chose to leave other banks for Simple’s brand promise—are upset that the banking experience they specifically chose is going away.
“But BBVA’s app is better” isn’t stilling their anger.
“But Simple’s founders made a lot of money” isn’t consoling those people.
Simple succeeded because it clearly defined its purpose and why you should choose their experience. They went all-in on it. Simple made it clear what customers were choosing between. Have you done the same for your bank? Or do you believe that people should choose a community bank because they inherently know it’s better? Hint: they don’t.
Defining your bank’s edge
Couching your bank as “independent,” “service-oriented,” and “people-focused” doesn’t cut it. These are what we call Beneficial Features. They seem packed with meaning and sentiment, yet they don’t actually tell your customers anything on their own.
Go back to Simple. Simple, as a word, is a beneficial feature. Would you prefer a process to be difficult or simple? Would you rather hear a complicated explanation to a problem or a simple one? Those are clearly loaded with beneficial leaning. But would you rather have a gourmet meal with complex flavors or a simple hot dog? Would you rather be known as a dynamic thinker or simple-minded?
Most community banks overuse similar buzzwords because they come loaded with meaning but fail to connect that meaning with value. Every individual brings their own deeply personal associations to words like “family,” “community,” “success,” and “stability.” You don’t have to explain these concepts to them.
But you do have to explain how your bank embodies those concepts to provide value to the customer.
One reason you might make a clear, focused value proposition is you fear excluding potential clients who might have different definitions of value. Banks often fear lighting the beacon of their value because they fear it will repel others. Simple was willing to commit to its message, even if it meant passing up people who wanted the opposite, who wanted something complex. They knew some folks might not like what they had to offer. But 100,000 people did.
Additionally, defining success also defines failure. Once you make a promise to the customer, you must fulfill it. Banks fear overcommitting to a promise, but I’d caution that while murky water may obscure accountability, it also obscures direction.
These conversations are hard, and it’s tough to get everyone on the same page. In small banks, we all wear multiple hats. Creating a consistent customer experience is difficult. But you must identify what it looks like when your bank wins—when your team wows the customer. And you must determine how to make this a consistent experience and how to communicate this to potential customers. What are you doing better? How can you do that more?
Simple customers didn’t leave because it got bought by a big bank. They left because BBVA eliminated what they wanted.
Your bank offers something your customers want. What is that thing? What would your customers miss if you were gone?
More pointedly, Why do you not want to be bought?
I’ll tell you: because your customers will miss you when you’re gone. It’s up to community banks to make certain community banks continue to exist.
Your bank is unique because your people and your communities are unique. You put the customer first. That counts for a lot. You just have to tell people how.
