Paperless document management enables banks to serve customers faster while realizing cost-savings and improving compliance.
In the past few years, many banks have started encouraging customers to go paperless. You’ve likely been asked by at least one company you do business with if you’d like to do so yourself. Why are banks pursuing this strategy so aggressively? It turns out, paperless document management in banking makes serving customers easier, faster, and safer.
What Does it Mean to go Paperless?
For financial institutions, “going paperless” simply means taking steps to reduce the use of paper in day-to-day operations and customer interactions. This includes strategies like offering to send statements via email instead of physical mail, enabling online application for bank accounts and loans, and even making efforts to conduct more internal communication and document management digitally.
Going paperless not only makes a bank more eco-friendly, it also helps reduce expenses, improve customer experience, and boost compliance. The best part is, you can start to realize these benefits even by starting with a phased approach. In fact, going paper-free can improve project productivity by 30%-40% with investments in paperless technology showing payback within 12-18 months (according to globalsign.com). Many financial institutions go paperless one service at a time and by making it optional for customers. You will likely find that the majority of customers prefer to handle documents digitally.
What is a Paperless Document Management System?
A paperless document management system makes it easy for financial institutions to manage all of their digital documents in one place. Think of it like a digital filing system that any authorized user can view and contribute to and that can bring up information on any customer at any time. Unlike a physical filing system, a document management system makes it easy to analyze and compare information, see trends over time, and find necessary documentation in case of an audit. Document management systems can be either locally hosted or cloud-based.
A locally hosted document management system is one that is installed on your bank’s local server behind your firewall. That is to say, it can only be accessed from within the bank. The primary benefit of a locally hosted system is that everything is under your control and you can ensure all compliance and security policies are being enforced. However, this can become a big drain on your IT resources and makes it difficult for remote employees to access documents. As we learned in the pandemic, you never know when people will need to access documents from home.
A cloud-based document management system is, as the name implies, hosted in “the cloud,” which refers to Internet-accessible servers and the applications and databases that operate on those servers. Cloud-based solutions lower the cost of IT overhead and often have more robust security than a small or mid-sized financial institution can maintain. These systems are also more accessible to your employees from anywhere. However, they can be more expensive initially and are dependent on a functioning Internet to access documents.
The best choice for your bank will depend on your specific needs, but cloud-based solutions are becoming increasingly popular for bankers that need the ability to work from anywhere and collaborate across teams. In fact, 84% of banking business executives believe that cloud technology will play a transformative role in banking (The Economist Intelligence Unit).
Benefits of Going Paperless for Small and Mid-Sized Banks
Small and mid-sized banks immediately see cost-savings and other benefits when they go paperless. Benefits include:
Using paper for document retention can be risky. Each region has specific requirements for how long documents must be kept. When managing numerous paper documents for each customer over several years, it’s easy to misplace things. Additionally, it becomes impossible to securely manage multiple copies that may be given to different departments and customers. Should an audit arise, digital document management makes it much easier to quickly find the documents you need, without sorting through rows of filing cabinets.
Reduced Storage Costs
Storing thousands of paper statements, applications, and other documents can quickly take up a lot of space. Many banks pay additional storage fees just to manage documents.
Secure Access to Information
With a digital document manager, you can ensure only authorized employees and customers access documents. Customers and third-parties can securely upload documents anytime, anywhere. Customers have peace of mind that their identifying information is being safely handled, and bank employees have flexible access to documents without sacrificing security.
Expedite Loan Processing
Enabling third-parties and customers to upload documents without visiting the bank can significantly reduce the time it takes to process the loan. Loans can be processed even more quickly when a digital document management system is integrated with automated loan-decisioning technology, minimizing the manual review and back-and-forth communication.
Quickly Locate Information
With a paperless document management system, a complete customer history and profile can be pulled up with a few keystrokes. Should an audit arise, digital document management makes it much easier to quickly find the documents you need, without sorting through rows of filing cabinets.
Improve Customer Experience
More customers are turning to digital banking solutions as an easier, more convenient way to access their account information and stay organized. Adopting a digital document management system enables you to help customers faster without the need for them to visit a branch.
Let’s talk about how you can start the process of going paperless with the full support of a team of U.S.-based experts. Learn more about how Accrue can help today.