From Pittsburgh to Portland
How the Simple tale has come full circle
I opened my first PNC account in 2004, when I started my MBA/MS dual-degree program at Carnegie-Mellon. I already had a checking account at Citibank, but Citi didn’t have branches in Pittsburgh back then, and PNC was everywhere. They also had a desk on campus that made it easy to open the account. Over the years as I completed my MBA and dropped out of the MS to get a job at McKinsey, PNC became my primary bank, and I ended up closing the Citi account.
Fast-forward a couple of years, and I heard about PNC’s new Virtual Wallet product. It was designed for students, and had been built in conjunction with IDEO. It actually had a website built from the ground up with usability in mind, and there were a lot of cool UI features that were new to banking in the US. I already had a checking account at PNC, but as a McKinsey consultant working in financial services and living in Pittsburgh, I had to check this out. So I walked into a branch in Shadyside, and persuaded the branch staff to open a Virtual Wallet account for me (I may have fudged exactly when I left college :-). So I ended up with not 1, not 2, but 3 PNC accounts — a regular checking account, a Virtual Wallet Growth account, and a Virtual Wallet Reserve account. This was pretty common behavior — PNC was finding that a lot of the demand for its Virtual Wallets came not from students, but from young professionals. It caused internal conflict between the branch banking and Virtual Wallet groups at PNC as many profitable customers tried to migrate from branch to Virtual Wallet. PNC eventually figured out how to make Virtual Wallet an integral part of the product, rather than an unloved offshoot hanging off the side, but it took a while and they went through some pretty messy transitions.
Couple of years after that, I was working in Belgium, when a friend from B-school Josh Reich emailed me suggesting that we should start a retail bank. You’ll see how crazy I am that in the summer of 2009 I thought that was great idea, and I ended up leaving McKinsey, moving back to the US, and co-founding Simple with Josh Reich and Alex Payne. We looked at everything in the market as we built Simple, including a deep dive into PNC’s Virtual Wallet. The calendar based view of transactions that was innovated by PNC inspired us. We even copied that feature in early prototypes of Simple, although the product that we eventually launched after almost 3 years of hard work didn’t include it. As part of that journey, we consolidate the whole company to Portland, and I moved here myself in October of 2011. Funnily enough, a friend who visited Portland mentioned how much it reminded her of Pittsburgh. Both cities lie at the intersection of two major rivers and are criss-crossed by many bridges.
The crazy ride eventually led to a $117M acquisition of Simple by BBVA in 2014. I then moved to BBVA and spent a couple of years building the BBVA Open Platform and the BBVA API Market. Sadly, I could never figure out how to really scale those businesses within BBVA (apparently, the market is already well served). So I left in 2017 and co-founded Sila.
The news today that PNC is acquiring BBVA’s US operations is bittersweet. In some ways it feels like things have come full circle — Josh and I first met in Pittsburgh, we both had PNC accounts for a while, and Virtual Wallet was one of the first US based checking accounts to innovate on user experience, rather than branch presence. On the other hand, I have to wonder how Simple, Azlo, and the BBVA Open Platform will fare with their new bosses. PNC has a reputation for being very conservative in managing their balance sheet, but also has a good tech stack and technology management. So lets hope this leads to renewed focus and investment into not just the core BBVA branch business, but also the new digital business ventures that have so much potential, but are still sub-scale.
About the author
Shamir Karkal is the co-founder and CEO of Sila. A software engineer turned finance and banking expert, Shamir previously co-founded Simple and headed the Open Platform at BBVA. As a serial entrepreneur and fintech investor, he’s deeply involved in building the fintech ecosystem and proud to have been an angel investor in TransferWise, EarnUp, MPOWER Financing, Fabric Insurance, and others. He is also a volunteer at iSpirt.
