What’s in a Name?
By James Mason
My friend and her six-year-old daughter were listening to music. Her daughter said that she’s never heard the song playing and that it was “weird,” so my friend said, “This was a popular song when I was a teenager in the ’90s.”
Her daughter replied and said, “Oh. You mean in the 1’s and not the 2’s, right?” It took me a minute, but I finally figured out that she was referring to the 1990s and the 2000s.
Wow, how times have changed.
We used to listen to music on the radio and listen to CDs. Now anytime I listen to music, I stream it. Being in the banking industry, I started to think about why a checking account is called a checking account if people barely use checks anymore. (I mean, does the younger generation even know how to fill out a check?)
So I decided to do some extensive research (read: an internet search) to understand why a checking account is actually called a checking account. As you probably guessed, without looking it up, they’re called checking accounts because they traditionally offered a consumer the ability to write paper checks.
The checking account has traditionally been rationalized as a loss leader. Its purpose is to encourage consumers to apply for loans, attract large deposits, and use related revenue-generating services. But just as my friend’s taste in music is no longer valid, the appetite for a checking account is no longer about writing checks.
Most financial institutions offer similar checking account services, and quite honestly, a consumer expects those services from their financial institution. So how can a financial institution differentiate itself from the competition? By giving consumers what they want!
Consumers want instant access to a variety of benefits. Take Amazon Prime, for example. I love Amazon Prime because of next-day shipping and Amazon Music. I know about other benefits I get with my subscription (like one- or two-day delivery and discounts at Whole Foods), but I don’t use them. Regardless, I happily pay my annual dues every year.
Today’s consumers are plugged into the subscription society, and they want to pick and choose the things that benefit them and decide when they want — or need — to use them.
At StrategyCorps, we want your FI to compete with the large FIs. That’s why we arm you with the features consumers want — and in many cases, are buying from others — and attach them to your checking accounts. Not only that, we help your FI become even more digitally engaged with the consumer through the BaZing mobile app in addition to your mobile banking app.
If your FI gives consumers what they want, their relationships will naturally deepen and grow to become your most profitable relationships. That has to be music to your ears!
James Mason is regional director at StrategyCorps. For more information about how your financial institution can generate replacement revenue to subsidize unprofitable relationships, connect with him on LinkedIn, send him an email, or give him a call at 919.619.3202.