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Banking Updated: 18 Aug 2017

Simple, how a FinTech startup creates its business model in online banking

The growth of this FinTech startup is one of the success examples within the sector: creation of a retail bank with operations that are exclusively online and, mainly, executed via mobile device. In addition, with the acquisition by BBVA, Simple also has become an example of open innovation strategies.


In 2009 Joshua Reich and Shamir Karka made a risky decision: “We're going to start a retail bank” and in just a few months Simple was born. These two young men had a clear vision: to provide the customer with modern tools so that they may control their finances.

After obtaining funding in the risk capital market, they launched their beta version in July 2012. Their objective was clear: to be a bank without offices, in other words conduct all their business through Internet and, above all, using the cell phone. In 2013 Simple had already become the financial intermediary in over 6.6 million transactions.

At that point, the young founders made an alliance with Bancorp, the partner that provided them with a platform for growth and for structuring their business model.

During this first year of operations, their results were spectacular:

-  Over 250,000 requested an invitation from Simple.

-  They processed over 1,000 million dollars in transactions in the year.

- Their Visa cards have been used in over 2 million operations.

- They recruited over 40,000 customers in all states of the US.


Simple has become an example of open innovation strategies.

To achieve these objectives, Simple uses intelligent algorithms to analyze the customers' monthly expenses and, using their tools, assist customers in managing their savings in any operation to achieve the objective they have set for themselves.

It works like a social network, as you can add to the operations stickers, comments, and even images. The objectives its customers set for themselves are like virtual piggy banks to which part of the money may be moved in a simple motion each time the customer wishes to do so.

These were a few of the secrets that ensured Simple became in its first year one of the FinTech startups with the best prospects of the market. For this reason, BBVA, in full transformation toward the digital era, cast its glance upon it. “BBVA believes in our vision and the path we have taken to transform the sector." It was with this statement made in February 2014 that Joshua Reich, while the company was growing at full speed, justified the sale of the company to the BBVA Group.

The BBVA operation, through its US subsidiary BBVA Compass, was in keeping with the Group's digital transformation strategy, through new products and services, developed both internally and through investments in vanguard startups such as Simple, with the objective of reinventing the financial services sector.

For this reason, after the sale to BBVA, the founders insisted time and again that all the popular aspects of Simple were going to be maintained "without change". “We're going to keep embracing our philosophy, our business model and the way we treat our customers. To work with BBVA gives us the resources, scale, and autonomy that we need to accelerate our growth, remaining faithful to our mission."

For this reason, after the sale to BBVA, the founders insisted time and again that all the popular aspects of Simple were going to be maintained "without change"

The key to this has been that Simple has continued to work as an independent business within the BBVA structure, i.e. in parallel, but always with the support of the most global banking groups. "We will have important resources to grow and follow the innovation rhythm that our customers deserve," Reich predicted.

At the start of the summer of 2014, Simple announced growth of 330% in its financial services, with respect to the preceding tax year. With the good annual results, Simple estimates that it will be able to grow 50% in terms of number of employees to be able to improve its products and the services it offers to its customers.

Who is Simple

Headquarters: Portland (Oregon, United States).

Founded in: 2009 by Joshua Reich and Shamir Karka.

Commercial launch in: July 2012.

Sale to BBVA: in February 2014.

Selling price: the transaction was evaluated to be worth US$117 million.

Customers: at the time of its sale to BBVA, Simple had over 100,000 customers in the United States, five times the users it had at the end of 2012.

Employees: at the time of its sale to BBVA, the organization had 92 workers.

Services: OIt offers its customers everything they need to spend more intelligently and save more. It boasts the most advanced Android and Apple apps, which include saving tools and outstanding customer service.

Source: BBVA and Simple.