BankSimple seems to be a no-branch bank like ING-Direct. They're presenting themselves as being better. How are they different? Well, they're pushing the idea of no-fees, better customer service, and better mobile banking. In order to achieve that, they'll have to be more efficient or accept a lower profit margin. Banks have healthy margins so there is some room there, but there are other industries with higher margins.
The second piece is that there are already not-for-profit banks. They're called Credit Unions. They exist to give their customers (who are their owners) the best deal they can. In order to be better than credit unions, they'll have to be significantly more efficient rather than simply relying on lower margins.
Part of what makes me skeptical is that they aren't creating a bank. They're partnering with currently chartered banks. This is probably because it's very difficult to create a bank and there's a lot of regulation to deal with. However, this somewhat limits what they can do to give me a better deal than a bank (since they're just reselling the product of another bank). Now, banks vary in how good of a deal they give you so part of their product might simply be getting you a good account under their brand. But part of this means that BankSimple won't be doing what banks normally do with deposits. Banks normally lend it out or invest it. BankSimple will be parking it in another account. So, if they aren't charging fees, how will they make their money? Maybe they've found an account that will give them 1% interest and they'll pass on 0.5% interest to me. However, why shouldn't I just bypass them? If they're doing things like refunding ATM fees, covering overdraft fees, etc. will the interest difference cover that?
I'm not saying that it can't be done. They stress no-fees and earning more interest. If they aren't lending the money out themselves, that will be hard to do - especially considering that they're claiming the best customer service, best software, etc. Where are they making their money? Not off fees and they aren't lending it out, but rather relying on other banks.
I'd really love to see their business plan since I assume they've addressed these things. Maybe wholesale banking exists and offers them a lot more. Maybe credit unions are woefully inefficient. I'm excited for their launch, but I'm not unhappy with my credit union.