The Imaginary War Between Movenbank and Banksimple

A bank exec jokingly tweeted the following recently:

@rshevlin @brettking Just wait til the MovenBank / BankSimple wars…

Although the tweeter was joking, there may very well be folks within the financial services industry who believe that Movenbank and Banksimple really are “at war.” They shouldn’t believe it.

Movenbank was founded by Brett King (author of Bank 2.0) last summer, and is planning a soft launch in July 2012. Stealing (shamelessly, but with citation) from NetBanker, Movenbank will be:

“Mobile only, with no paper or plastic. NFC-enabled app. Incorporates “gamification” in UX. According to Startuply, “reinventing credit scores and more with an open, social transparent, and viral model” (sounds P2P lending-esque). Bottom line: MoveNbank is looking to leapfrog the competition by removing all vestiges of old-school banking. No branches (of course). No paper (no surprise). And no plastic (what?).”

For those not familiar with Banksimple (and if you’re not, then what rock have you been living under?), here’s what Mashable had to say about it last summer:

“Banksimple doesn’t hold its own bank charter; instead it works with FDIC insured banks that serve as the financial backbone for the platform. Customers, however, will have an entirely Banksimple-branded experience from the time they login and make their first deposit to each and every cash withdrawal they make at ATMs. With Banksimple, customers will have one account and one debit card. The signup process will be relatively painless and require the user to make an initial transfer of money to setup their Banksimple account. From there on, Banksimple seeks to provide an automated banking experience with a flair for the unconventional, but the comfort of traditional serves like automatic deposits and bill payments.”

My take: One day Movenbank and Banksimple may very well be rivals at “war.” But for now, the two firms are better off collaborating than fighting. I come to this conclusion based on a lesson I learned from Coke and Pepsi, which are (arguably) two of the fiercest head-to-head competitors in any industry.

In a previous life, I worked on a consulting project for a Pepsi bottler who was building new plants in Argentina and Brazil.

On my trips to South America, I was surprised to find that representatives from Coke and Pepsi would meet to discuss the market and the opportunity it held. My first impression was that this was some kind of nefarious, illegal collusion.

At the time, the regions of South America that Pepsi was looking to expand into were greenfield territory for the soft drink providers. As a result, Coke and Pepsi were collaborating to help develop the market. They knew that if they didn’t first get people to like their products — and make it a staple of their diet — then they would just be pummeling the crap out of each other for a market that wasn’t even worth fighting for.

The Movenbank/Banksimple situation is analogous. The two firms have to educate consumers on what a new type of bank is, will be, or could be.They have to build demand for the new type of bank they’re building. Which is, of course, no easy feat.

There’s no rivalry between Movenbank and Banksimple today. But I have to admit that it’s not a bad tactic on the part of existing bank executives to try to play the two startups off against each other. 

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