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Tim Tyler
Tim Tyler - Misys - London 29 May, 2012, 17:28Be the first to give this comment the thumbs up 0 likes

I wonder if we get caught up in nomenclature far more than non-bankers do?

A bank ought to research its target demographic and name/brand its account appropriately. Once the brand has been applied, what you mention just become generic terms for a type of account anyway. That generic term is still useful though, in bringing some broad sense of classification to the account.

The problem that we would have in naming the type of account to completely reflect its purpose is that we would end up with somewhat ridiculous portmanteaux.

Would you like to open a debitcardonlinemobileinterestfreeoverdraftnochargeswhilstincreditwithnochequebook account?

Or would you rather a Platinum Current Account?

Ps/I have to add that I have always considered "checking" to be an erroneous term for a bank account (without even getting started on the spelling!): a "current" account is for now, a "checking" account for the past.

Brett King
Brett King - Moven - New York 29 May, 2012, 17:39Be the first to give this comment the thumbs up 0 likes

Tim,

If we use that logic then why not just simply a "bank account"? What does 'current' even mean? Isn't it redundant?

BK

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 May, 2012, 19:45Be the first to give this comment the thumbs up 0 likes

In the brave new world where Apple, Facebook, Google, PayPal, Square and scores of other non-banks are apparently threatening to disintermediate banks, I'd have thought that 'bank account' itself is an outdated term and that 'Non Bank Account' is the product that better captures the zeitgeist. Just joking...

Everyone understands what 'checking account' means. So, IMHO, it is a waste of marketing dollars for banks to rebrand 'checking account' to 'bank account' or some such thing. Besides, notwithstanding what analysts and statistics say about the declining use of checks - BTW, I find this spelling far more phonetic than the contrived alternative - we see fairly contradictory trends on the ground:

  1. Even Internet-only accounts now offer check books e.g. ING Direct USA.
  2. Mobile RDC for offsite deposit of checks is perhaps the only 'killer app' in mobile banking in the US today.
  3. To set up a bank account for direct credit via EFT, the Indian regulator asks for a canceled check to prove account ownership. Paradoxical as this might sound, I trust the regulator to know what it is doing. Among other accomplishments, it has established an ePayment system called NEFT in India, which has been hailed as one of its kind by BIS in its recent report on global retail payments innovations. In any case, banks have no choice but to comply with the regulator's edict, paradoxical or not.

Just as analysts have been predicting the death of cash for over five decades, I expect their predictions about checks to last at least half as long. Until then, 'checking account' is quite fine.

A Finextra member
A Finextra member 31 May, 2012, 09:45Be the first to give this comment the thumbs up 0 likes

I don't understand what a 'checking account' is?  What is 'checking'?  I check my account periodically!  (OK, I know it's really chequing)..

It always confuses when when a US ATM asks me which account to get money from - 'checking' or 'saving'?  I have neither.  I just want an 'account'.

Why confuse it with current, bank, premium, or debit/credit.

I have one account with each entity(bank, building society, paypal, google, wonga etc. I don't want more, as it simply means more and more plastic, charges, statements to 'check' and hassle.  I expect it to offer me some savings interest when I am in credit, and be a credit account when I am 'overdrawn', and feed a wallet, and allow online payments.  It might offer me free travel insurance and other pseudo benefits, according to my type of account or what I pay to maintain it.

I think banks are still silo'd to be able to do this, and others are stepping in.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 31 May, 2012, 16:44Be the first to give this comment the thumbs up 0 likes

To add to @Finextra Member, there's one more hassle of having multiple accounts: Forgetting to declare a couple of them in your income tax return, only to be reminded by the taxman to cough up tax and penalty on the interest income accrued in them. Not a first world problem, probably, but can be a hassle in high interest economies like India.

By their very nature of having different withdrawal frequencies and lock in periods, money in different accounts is weighted differently for capital adequacy purposes. Therefore, even if banks' internal silos crumbled, I am not sure if they can offer @Finextra Member's dream account under the current regulatory framework. Besides, I'm sure bankers created different types of accounts only because people expressed different financial needs. I for one am perfectly comfortable about sweeping any surplus funds from my current / checking account into a separate savings account periodically. So might many others.

For several reasons - all genuine and compliant with its TOS - I have three different accounts with PayPal, so I don't know who are these nonbanks who are 'stepping in' to offer all-in-one-and-one-in-all type of accounts.

Brett King
Brett King - Moven - New York 31 May, 2012, 17:27Be the first to give this comment the thumbs up 0 likes

All,

I appreciate the sentiment expressed in support of the poor old checking/cheque/current account, but the very fact that there is so much confusion around the difference between a current account and a savings account, for instance, is in itself proof of why the nomenclature is a bad idea.

Right now if you want to onboard new customers you'll have to EDUCATE them first before they can discern the difference between these accounts. That is all the proof you need that this is a bad idea.

I'm not saying get rid of cheque accounts. I'm saying call an account an account and savings ... savings. But checking or cheque or current requires you to explain - that means unnecessary complications, friction and complexity. 

We should be making our customer's lives simpler should we not?

BK

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