When is a bank not a bank?


When is a bank not a bank?

One of the most frequent questions we get asked is whether Move-and-Bank is a bank or not. Well, let’s just set the record straight. From a regulatory perspective, we don’t have a banking charter (some call this a banking license), so we’re technically not a bank. We don’t have a charter because it gets incredibly complicated and expensive, which is the reason hardly any new banks have launched globally in the last few decades. Instead, we are redefining what banking is all about by making it simple to spend, save and life smarter.

So the bank in Movenbank’s name is referring to what you do – you move, and you bank – because banking is something you do, not a place you go. We’re enabling the doing of banking. We’re enabling banking whenever and wherever you need it, but in a way that doesn’t frustrate our customers, and with reasonable and transparent fees.

Don’t you need a banking license to do banking?

Not at all, as practically any firm can offer banking – taking deposits and offering credit – by working with a bank. PayPal does this – they make it easy to pay over the internet, but it all sits on top of the banking system.

That’s how we are starting too. We are working with some fantastic banking partners who do the core banking stuff; including holding the licenses and FDIC insurance that protects the deposits of our customers. In financial services this type of arrangement is very common, just checkout Walmart’s debit cards.

But don’t think we don’t understand banking. We understand exactly what it means to be a bank. Our team has been working in banking for decades, and we’ve worked for some of the best known banks and financial services players on the planet including Citibank, HSBC, LloydsTSB, ANZ, E-Trade, and others.

What we’re doing is best described as banking rebooted because everyone needs banking, they just don’t need banks, especially those that insist on you visiting their branch every time you need to make a deposit or change your address.

In fact, we can’t think of any other way that says what we do what we do as clearly as Move-and-Bank. Although we admit that some might prefer that we call ourselves a fully-fledged ”2.0”, 21st century, non-bank, mobile, social media-enabled, PFM service that makes banking fun but that isn’t technically a bank. We just think that sort of name would suck…and the URL would be really loooooooong.

Why don’t you just get a charter?

In the last three decades, very few new banks have launched globaly because the barriers to entry are extremely high:

you have to start with lots of capital to comply with regulations;

you have to have even more upfront money to get FDIC insurance licenses;

you then need to jump through another bunch of hoops to get approval to start up; and

once you get going, you have to heap another layer of cost into the process to ensure compliance with all the regulatory controls.

Why do you think firms that have wanted to open a new bank for years – firms like Walmart – haven’t done so?

Besides, the money that we’d have to throw at establishing a charter, is better spent on revolutionizing the banking experience for our customers, rather than giving it to regulators, central banks or sitting in some bank account to cover capital adequacy requirements.

What difference does it make not having a charter?

None at all. You only need a charter if you are going to keep deposits which we will not, to start off with. That part may come later, but to begin with we just want to make it easy to save, spend and live smarter. That means making it easy to move your money in a good way, like Starbucks do with their Starbucks Card, like Dwolla and Venmo do for moving cash around, like PayPal and the mobile network operators do when they take deposits in the form of pre-paid telephone contracts, like the NYC Metro system and others do. It’s actually really common to do the bits that are very similar to what banks do, without a charter or license.

In fact, by not having a charter, Movenbank will be a better banking experience for our customers. Not owning a bank charter – like the 7,000 other “banks” in the United States – means we will not think or act like a bank. 99% of these banks think that banking is all about fees, charges, overdrafts, interest rates, branches, signature cards and checkbooks. We think it is about making it simpler to save, spend and live smarter.

That is why we’ve outsourced our bank charter to some great partners who really get this stuff, and then we’ve built something truly different on top of that. So you get the protection of a licensed, FDIC insured bank partner, and you get a revolutionary re-think of the way banking should work. From the time you join us:

you never have to fill out an application form,

you never need to go the bank;

you don’t have to sweat the small stuff as we make banking work better for you;

you never need to think about where the bank is, as it’s there every day, wherever and whenever you need it.

We’re here to make banking smarter, to help you spend, save and live smarter. We’re not here to follow the crowd and do things the same way they’ve been done for hundreds of years.

It’s time banking got a reboot!

Brett King named ‘Innovator of the Year’ by American Banker and Bank Technology News Magazine
Design in context: Using big data to change small behaviors

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