Many customers of shuttered neobank Simple, whose accounts were migrated to sister bank BBVA USA over the weekend, were locked out of their accounts in the process, per The Verge. Multiple error notifications popped up, including a “system error” message. A BBVA spokesperson attributed the lockouts to the number of simultaneous enrollment attempts through online and mobile banking channels. BBVA USA placed a red banner at the top of its website apologizing for the disruption and offering customer support.
Simple was an early neobank whose closure is part of PNC’s pending purchase of BBVA USA.
The glitches in the transition from Simple to BBVA USA could push more users than expected to other neobanks. Giving Simple autonomy let BBVA offer a neobank that could draw in younger users who weren’t keen on using traditional banks, per TechCrunch. While BBVA USA had a chance to retain Simple’s users with the convenience of an automatic migration, the account lockouts and resulting turbulence could undermine the incumbent bank’s efforts to keep them. That and the upcoming second account migration to PNC give other neobanks with similar value propositions an opening to attract Simple’s customers. Potential winners include US-based challengers like SoFi, which is planning to go public by June 1; Varo, which received a national banking charter last September; and Chime, which recently closed a $485 million funding round. One way that BBVA USA—and later this year, PNC—may be able to blunt attrition is by building on its already-formidable mobile app offering: The incumbent ranks fifth out of 25 banks in Insider Intelligence’s US Mobile Banking Competitive Edge Report for 2020.