In 2009, Shamir Karkal and Josh Reich founded Simple, the original digital bank.
The concept was straightforward and clearly articulated in an email Josh sent to Shamir in July of that year.
That email set off a chain of events that contributed to the rise of digital banking as a model to challenge the banking incumbancy.
Progress in digital banking since 2009 has been slow in tech years (but not in banking years). At the time of writing, we’re twelve years on from the founding of Simple, and the market share of incumbent banks is similar now to then. The world has changed in the intervening period, as digital quickly becomes the primary channel for engagement with banking services. Simple’s vision for a customer-focused bank on a phone is now the default model for banking startups, and increasingly for the industry as a whole.
Driven by advances in infrastructure in recent years, the maturing of digital banks including Chime, Varo and Current, and the digital dislocation experienced in 2020, the promise of digital banking is starting to be fulfilled. Fintech is still a drop in the ocean of the US financial services industry, but in the next few years, we’re looking at a transformational shift in market share in consumer banking.
However, Simple isn’t around anymore to see the industry it created reach maturity. The business was shut down by BBVA in January 2021.
Between Simple’s early success and eventual failure, there are many important lessons for founders, investors and the banking industry as a whole.
Here’s our breakdown of the top four lessons learned from Simple:
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