Banking

BBVA USA shuts down neobank Simple

BBVA USA, the Birmingham, Ala.-based unit of BBVA in Madrid, sent out notices to customers Thursday saying that its digital bank, Simple, is being shut down.

Simple, which was founded by Josh Reich in 2009 and acquired by BBVA in 2014, was the first U.S. neobank and the pioneer of a challenger bank movement that now includes a host of startups like Chime, Varo and MoneyLion.

BBVA USA, which has $102 billion of assets, declined a request for an interview, but offered a statement saying that the bank has been reassessing its goals as it prepares to merge with PNC Financial Services Group in Pittsburgh. The $457 billion-asset PNC said in November that it is buying BBVA USA for $11.6 billion. The sale is expected to close in mid-2021.

“We’re focused on the things that make the most sense for the company’s future….As a result, today we’re accelerating some changes and stopping work on others, including the closing of Simple,” BBVA said in its statement.

Twitter was immediately flooded with messages from Simple customers.

Reich, an Australian software developer and hedge fund quant, started what was then called BankSimple in Brooklyn as a “really boring, simple bank.” It provided basic banking and budgeting on a mobile app with low fees. It was a reaction what he considered needless complexity in American banking.

Two years later, he moved the company to Portland, Ore., and rebranded it Simple. (Regulators didn’t allow him to use the word “bank” in the name because it didn’t have a bank charter and instead offered services through bank partners.)

Reich joined BBVA when it acquired Simple, but left in 2018 to start a family farm in Portland as in currently in the midst of moving his family to Australia.

“I’m saddened for the closure but happy for the journey and the lasting oversized change that Simple has had on the global banking world,” he said in an email to American Banker Thursday . “Customer experience matters. Great teams matter.”

BBVA USA said it will be migrating Simple customers to the its mobile app. When BBVA USA’s merger with PNC closes, the Simple users will become PNC customers.


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