Checking accounts have been around in some form or fashion since 100 B.C. when the Roman argentarii (money changers) issued an early form of checks to their clients. Checking accounts then made their way to the U.S. during the early 1700s as colonists adopted the popular checking system brought over from Europe. Then in the early 1860s, The National Banking Acts laid the groundwork for the national check clearing system.
Yet today, the main reason for calling this account a checking account—the writing of checks—seems to be losing its descriptive accuracy. Checks have been declining in importance and in volume for the last decade or so (down from 16.9 billion in 2000 to 5.1 billion in 2012 per the Federal Reserve). Ask folks 30 years old or younger about checks, and they’ve either never written one (and don’t even know how to write one) or could count the total number they’ve written on their fingers and toes.
As a frequent attendee, exhibitor and presenter at retail banking conferences, I get to talk to lots of bankers and listen to a lot of speakers. While the term checking is still commonly used (and the acronym DDA for demand deposit account, to a lesser extent), everyone in retail banking seems to be struggling with what else to call it. I’ve heard terms like the generic bank account and the slightly more descriptive transaction account and debit account.
However, these names fall as short as the term checking does. The drawback with these alternative names is they are way too bank- and functionally-centric, employing terms generally unrecognizable by the public such as debit and demand deposit.
With alternative banking channels like online banking, online bill pay, mobile banking, mobile deposit and bill pay, smart ATMs and electronic person-to-person payments driving down interaction with real live bankers, the product actually delivering these functions becomes even more the identity and reference point of the customer relationship. The product housing these functions is increasingly the primary connection of your bank customer to your bank. Or as Brett King, the author of the books Bank 2.0 and Bank 3.0, puts it, “Banking is no longer a place you go… it’s just something you do.” And most of the doing relates to typical checking transactions. So the new term for checking must express a more customer-centric purpose of engagement.
But your bank can’t just call it something different and leave it at that. The account must truly be upgraded from ordinary checking delivered in the past. The checking account of today and in the future must deliver much more intrinsic value and convenience than ever before. It must connect with customers better and differently for your bank to be relevant in their lives.
Your customers are already thinking about their checking accounts differently (and using them differently too), so your bank must think about them differently as well, including not only what you call the account but also what it delivers—a relationship-building experience.
Who knows how that will evolve into a new name to replace checking or DDA? Something short, sweet and more meaningful will develop. I have some ideas already on this, do you? If so, let’s compare notes and maybe get this naming issue resolved sooner rather than later!