True Virtual Banking Has Arrived

BankSimple, Personal Capital, Betterment and others go branchless, paperless and “bank-less”

Jim Bruene

October 2011

: OBR 198



Download Printable Version of this page

Since the 1990s, the term virtual bank has been used to describe financial institutions operating predominantly online. However, most of the upstarts were not full-service banks, but specialists such as ING Direct or Emigrant Direct, using the Internet to gather high-rate deposits.
But at this year’s Finovate, we witnessed something that we’d not seen at our previous 10 events, the launch of not one, but two truly virtual financial institutions: companies designed to be the front-end of your entire financial life without the burden of being depository institutions.
• BankSimple
• Personal Capital
In this report, we examine the newcomers (BankSimple, Betterment and Personal Capital) and look at how their model could be adapted to traditional financial institution as well. Seven different potential business models are discussed.

True Virtual Banking Has Arrived


direct banking, virtual banks, ING Direct, PFM, personal financial management, strategies