Throughout the course of time, the US banking system has gone largely unchanged. There have been a variety of micro-evolutions – from cash to check, check to debit, and the like – but the way we interact with banks has remained much the same. Many people take comfort in the fact that they can walk into a local branch and speak with someone should a problem arise, but therein also lies the problem with banking as we know it: physical branches. I'm not saying that brick-and-mortar banks are a necessarily a bad thing in themselves, but being tethered to a physical location can be exceedingly annoying.
For example, let's say you're on vacation and need to pull some money out of an ATM – if you hit up an "out of network" ATM, you're charged with a fee. On top of that, your bank hits you with a fee. Sure, it's a trivial $4 or $5 charge, but it's still annoying. Another, much more drastic example: what if you move to a new location, and your mom-and-pop bank is nowhere to be found? That's a major headache. Not only do you have to switch banks, but get all new cards, change all your online bill pay information, and more. That's so much more than annoying – it's beyond frustrating.
So what's the solution? Virtual banks. Cloud-centric establishments that have nationwide ATMs and easy-to-reach customer service agents. All transactions are handled digitally, be it a simple transfer of funds to something more "complicated" like disputing a claim.
Fortunately, two new services that fill this niche have emerged over the last few months: Simple, a service backed by Bankcorp; and GoBank, a Green Dot company. Each service has its own respective set of pros and cons, so I've been using both for the last six weeks (give or take) to find where each excels and falls short.
What do you mean by "cloud banking?"
Essentially, both GoBank and Simple were designed to work without physical locations; thus, everything is handled virtually. Your checkbook is online, photodeposits are the norm, and everything in between is easily tackled from a keyboard and mouse.
While Simple has focused primarily on making the experience smooth within the browser and offer an app as a companion to that, GoBank designed its service from the ground up with mobile in mind. Basically, everything that can be done from the bank's website can also be handled from its mobile app. That in itself is absolutely fantastic. But I'll get into the details later.
Of course, there's a major concern with this: where is your money? If you're used to walking into a bank, then you associate a face with the name. You know that you can walk through those doors and discuss any issues with an actual person, face-to-face. With a cloud-based experience, that's not the case. I'll admit, it's slightly unsettling at first to send your hard-earned cash off to some virtual vault in the sky. After the initial shock wears off, you realize that your money is safe (both banks are federally insured), and it really isn't that much different than a traditional experience.
The real benefit is in the apps, web portal, and getting in touch with someone should a problem arise.
Services in a nutshell
If you've ever used Mint to manage your money, then you already have a good idea of what Simple and GoBank aim to do with their online tools. The main difference here is that the service is incorporated with your bank account, instead of being a man-in-the-middle. As a long-time Mint user, I absolutely love this.
Simple on the Web
First off, Simple doesn't consider itself a bank. It's a service that works hand-in-hand with The Bankcorp Bank, which is technically where your money is stored. For all intents and purposes, though, we're calling Simple a bank.
Simple's web front is very intuitive and feature-rich. It offers most of the tools one would need for good money management, including activity history, deposit management, and more. My personal favorite feature of Simple (and one that I'm quickly realizing I can't live without) is the "Goals" tool. Essentially, it allows you to offset money from your available balance to save for other expenses, both long- and short-term.
For example, let's say you want to go on vacation and need $5,000 to make it happen. You can use Goals to automatically set back the appropriate amount either immediately or over a given window of time. This will be removed from your "Safe-to-Spend" amount, though the money is still safely stored in your account. This is set up to keep you in check and avoid dipping into your savings.
Another great use for Goals is for short-term bills. Each month, I enter all of my bills into Goals (especially the ones that are deducted automatically), which prevents me from spending money that should go elsewhere. Once the funds are deducted from the account, I can specify that within the Activity log by spending from that particular bill's goal. Example: I set aside $185 for Verizon Wireless each month. Once that payment clears, I edit the entry in the activity log to specify that those funds should be taken from the Verizon Goal, and not the Safe-to-Spend balance. While it may sound slightly confusing in text, it's actually quite intuitive in use.
That's really the standout feature of Simple, and one that I haven't seen duplicated elsewhere. Everything else is expected of any bank: access to account numbers, statements, and policies. You can also manage your Simple debit Visa from the online portal, which includes the option to block it if it has been lost or stolen (an action that is also reversible if you happen to find your card).
Of course, that's not the only good feature Simple offers. It also has a very intuitive memo system that allows you to attach notes to your transactions. While this in itself isn't uncommon, Simple's feature lets you use hashtags to better keep track of specific expenses. For example, you could use this to quickly and easily see how much you've spent on dining out over the last month by adding the hashtag #diningout to all the appropriate transactions. The beauty of this system is that it works however you elect to use it – you can choose to note and hashtag everything or simply the transactions that matter most. Or none at all. It's all about what works for you and your financial situation, where flexibility is key.
No matter how many online options we have for paying bills, there's always one that requires you send a check. Since Simple doesn't offer checks, it has a better solution: it'll take care of the dirty work for you. You need only add the establishment to your contact list, tell Simple how much you need to send, and boom, that's basically it. No writing checks and remembering to send them off. Unfortunately, Simple's payment processor doesn't allow "tax-related" things to be sent out, so you're on your own for that sort of thing.
When it comes to customer service, Simple is doing it right. You can get in touch with someone either by calling an easily-accessible toll-free number (which I haven't had to use) or through the contact form by hitting the always-present "support" button on the Activity page. Support is handled in a very warm and welcoming threaded conversation-like interface, and it's very obvious it's a real person on the other end. Once a conversation is started with one agent, that same person will respond throughout the duration of the exchange, so you won't have to explain yourself multiple times.
Another thing I really enjoyed about using Simple's support system is that it tells you when you can expect to get a response. For example, if you contact support through the conversation option at 7:00PM on a Tuesday, it will let you know that an agent will respond the following morning. I've used this feature several times (for various questions about the service), and the agents have consistently replied to my inquiries within the suggested amount of time.
Finally, let's talk about fees. In short, Simple has almost none. There's no fee to have an account. No overdraft fees. No charge to send a check. If you go 180 days without using your account, they'll charge you a $5 fee. Other than that, you're only stuck with out-of-network ATM charges. It really doesn't get much simpler than that.
GoBank on the Web
GoBank is owned by the Green Dot bank (formerly Bonneville Bank), which also sells reloadable prepaid cards. After realizing this, my first question was what's the difference between Green Dot and GoBank? I reached out with exactly that inquiry, and this is what I was told:
We've found that some consumers are really looking for a checking account, and others specifically don’t want a checking account, but do like the control and convenience of a prepaid account. We’ve created products for each of these markets.
There is a lot of overlap in features, but one of the key benefits for the Green Dot product is immediate access to funds. When the consumer funds the card, they have immediate access to the funds on the card – with the card in the package they purchased at retail. Most Green Dot cardholders can fund their cards with cash at over 60,000 retailers nationwide.
With GoBank, members need to sign up online or from the GoBank app. GoBank serves as a full service bank account, which is built around technology like our budget tools, mobile deposit and notifications … and services like the GoBank Money Vault. It's designed to be fully managed from the member's phone or computer.
The Green Dot prepaid card also offers a broader set of options for signing up for the card. The consumer doesn’t have to have access to a smart phone or a computer with internet access in order to sign up for a card.
In short, GoBank is for those who want full control of their money, access to financial tools, and a full-service bank account. For those who just need a basic debit card, there's Green Dot.
With that out of the way, let's focus on what makes GoBank special, starting with the its web front.
Like Simple, GoBank's online interface is clean, easy to read, and loaded with useful features. As soon as you log on, you're presented with the activity log, along with the account balance, Money Vault (more on that in a bit), budget tracker, scheduled payments, and ATM locator. That's a lot of very relevant info on one screen.
When it comes to the activity log, GoBank's offering is pretty simple. No hashtags, memos, or any other options; in fact, you can't even edit any of the transactions. You can just look at them. What it does have, however, is the Money Vault. This is a very quick and easy way to set back some funds, though there's no way to specify what those funds are for – think of it as a savings account within your bank account, with easy access to move the funds back and forth at all times.
Then there's the budget tracker. Initially I thought this would be more like Simple's "Goals" options, but it's actually quite a bit different. It keeps tracks of all your budgets, be it income or expenses. It can be used to monitor due dates, frequencies, and the like. However, it falls flat on its face in one big way: the amount for the specific budget isn't deducted from the overall account balance, making it much less integrated than I would like.
For example, If I make a $3000 deposit, but have budgets for $600, $200, $500, and $150 due within the same timeframe as the deposit (let's say monthly), I want the $1450 total to be deducted from the overall account balance. Instead, GoBank always shows the exact amount of funds in the account, with a "budget summary" directly below that which includes the amount of income and expenses, along with a readout of how much is left over after the fact. The account balance and left over funds are independent of one another, so if you're the type of person who likes to keep a bit of money in your checking account at all times (don't we all?), then this can be a bit confusing because it's difficult to quickly parse how much money you actually have that's unaccounted for. I found it easier to just avoid the budget options altogether, which is disheartening because I feel like it's a missed opportunity for a highly useful tool.
When it comes to making deposits, it couldn't be easier: photo deposits are always welcome, or you can set up direct deposit through your employer. Up until a few days ago, there was also an option to deposit money directly into your GoBank account via a debit card, but that option has now been removed. That was originally one of the most standout features of GoBank, so I was sad to see it go. Using a debit card to transfer funds into the account is now only allowed during the signup process. Boo.
Like Simple, GoBank doesn't offer checks as part of your account. What it does offer, however, is something very similar: they'll write the check and mail it for you. The "pay a bill" page is actually pretty rad – it shows an actual check and lets you fill out the appropriate info to get the funds on their way. Done and done.
It also offers the option to send funds to other people. Basically, you can send money to a recipient via email, mobile, or – get this – Facebook. To claim the money, they'll either need to open a GoBank account (of course), or transfer the funds to their PayPal account. Definitely handy if you need to get some funds to another person without, you know, actually leaving your desk. Or couch. Or bed.
GoBank's take on fees is a bit different from Simple. And by that, I mean you get to choose how much the service is worth to you – up to $9 monthly. Past that, everything is about a cut-and-dry as it gets: a basic debit card is free (one with a customized image is only $9), and out-of-network ATMs garner a fee of $2.50 for a withdrawal and $1 for a balance inquiry. Not sure why you'd need the latter, however, because the GoBank app can give you that info in a split-second.
OK, I'm interested. How are the apps?
Apps are undoubtedly a major part of the cloud bank experience. If the app sucks, well, that doesn't speak well of the service, does it? Fortunately, both GoBank and Simple have developed apps that cater well to their target audience. When it comes to features, however, GoBank easily walks away with the prize. While functional, Simple provides only the most basic of information.
When you first fire up the Simple app – which is available for both phones and tablets, though it's the same interface across devices – you're greeted with a classy-looking guide that shows Simple's benefits. If you're not already a member, you can request an invite from there. If you already have an account, you can sign in with the button on the top right, or quickly find an ATM with the button on the top left. Once signed in, you'll create your login PIN, which is used to sign in to the app in lieu of typing your password every time.
From there, it jumps into the main interface of the app, which starts with the activity log. This section is about as straightforward as it gets: these are the transactions you've made, both cleared and pending. Tapping a transaction allows you to edit the category, add a memo, or specify the goal in which the funds should be taken from. It also shows a nifty little map showing where the charge took place.
On the top left the activity log is a dropdown that can also show scheduled payments (read: payments that have been physically mailed but not yet cleared). A left-to-right swipe reveals the app's one-and-only menu, which is where you'll find the ATM locator, option to deposit a check, your account numbers, how many invites you have left (each user starts with five), and the settings menu.
Settings are surprisingly sparse in Simple's mobile app, with toggles for mapping and transaction notifications. You'll also find a contact number to call customer service tucked away in here, but past that, there's nothing of value.
In a nutshell, that's basically all the Simple app has to offer. It's very... simple. Too simple, actually. Hopefully the company is working on adding more features soon.
Let me just preface with this: For the most part, I love the GoBank app (though that useless legacy menu button needs to go). There isn't a single thing that can be done on the site that can't also be done from the app, which is fantastic in every fathomable way. One of the selling points of GoBank when it was first announced was its mobile-centric nature, as it was designed from the ground up with the option to be used exclusively from a mobile device, and it definitely lives up to that promise. Huge props to GoBank/Green Dot for delivering. That said, it's not perfect; sadly, the GoBank app is only available for phones at this time – hopefully a tablet-optimized is in the works (or maybe that's just wishful thinking).
That peeve aside, GoBank's app is well-designed, save for a few small annoyances. The login screen is actually one of my favorite things about the app, as it has a nifty "slide for balance" option at the bottom, which allows you to – get this – slide a marker to show your balance. If you're not confortable with that, though, it can be disabled in the settings menu. Personally, I think this is a great feature, because the main reason I open the app most of the time is to check the available balance. With this, I don't even have to log in.
But that brings me to one main gripe about the app's functionality: there's no option for PIN unlock. I really hate typing my password every single time I want to login, especially since GoBank will lock you out of your account for 24 hours after three failed attempts. Let's be honest here: regardless of which keyboard you use, typing in a [good, strong] password is a pain, and there's a good chance you're going to get it wrong. On mobile, a PIN unlock is absolutely clutch in my opinion. Thankfully, this is an easy fix that could show up in a future update (please?).
Once logged in, the app is laid out in three sections: Home, Deposit, and Pay. Simple enough (no pun intended).
Home shows the account balance and money vault contents, along with quick access to the transaction register, budget builder, and a feature unique to the app called Fortune Teller. This option takes into account your current balance as well as any budgets you have set up to help you make a purchase decision. For example, let's say you have $2000 in your account, but $1700 in upcoming bills set up through the budgets option. You can ask the fortune teller if you should spend $250 on [whatever your heart desires], and it will give you a (sometimes vague) answer. It seems like this feature is more for fun than anything else, but I actually enjoy that – I like a service that doesn't take itself too seriously 100 percent of the time. Fun is good! Also, I'm not sure why there's a little dog bouncing around the Fortune Teller button, but whatever.
While GoBank's primary interface looks like it would be swipe-able, that's unfortunately not the case – tapping tabs is the only way to move to the next section. Boo, GoBank, boo!
Deposits and Pay are exactly what they sound like: the former is where you can deposit a check or set up direct deposit (there's also an option for the once-favorite-but-now-defunct "use a debit card" feature), and the latter is where you can send money to another person or pay a bill via check. Again, easy to understand, intuitive, and full-featured. Love it.
In the app's action bar you'll find the GoBank logo followed by a number – this indicates how many notifications you have, should you have that option selected in the settings menu. Speaking of, access to the app's settings can be found in the top right, at the very end of the action bar (you know, in the normal place); here you'll be able to edit your personal info, access security options (which includes setting the ATM PIN and disabling the "show balance" option), notification options, and get support – all pretty standard fare.
Overall, GoBank has done a terrific job with its app. It follows the design guidelines (for the most part) while still keeping a very unique look about it, is chock-full of incredibly useful features, and works surprisingly well for an initial release. Good job, guys!
Great! Which one is right for me?
Ah, herein lies the question. Like with most competing services, there are pros and cons to each. For example, Simple is backed by Bankcorp and has a great way to keep track of upcoming bills/save money, but its app is severely lacking in the features department. On the other hand, GoBank's app is one of the best financial apps I've ever used and the service is full of great features, but it doesn't offer something like Simple's "goals" (which I've come to rely on).
Of course, everyone's situation is different, and there's so much more to consider than just "how good are the apps/features/website/etc." That's really the entire purpose behind this piece: to help users parse what's different about these two services and compare it to their current bank. For me, an online bank is perfect, but I work with mobile and sit at a computer all day. For some, it may be far more practical to head to the local branch to talk with someone, hit the ATM, make a deposit, or the like.
For those who are considering the jump to cloud-centric banking, however, Simple and GoBank are both fantastic choices depending on your needs. Both are so good, in fact, I'm still trying to decide which will be my primary bank of choice – a difficult task even after using both services for several weeks and writing close to 4,000 words about them.
Hopefully that decision will be much easier for you.
For the time being, Simple is still in beta and is invite-only; you can sign up for an invite here, or kindly ask an existing Simple customer to provide you with one (each user is given 5 invites). GoBank, on the other hand, will be available to the public beginning on July 4th. If you'd like to get in on the action before then, you can request an invite here.