Financial services companies create and manage very large volumes of documents each day. In order to reduce the time taken to process payments as well as ensure better customer service experience, banks need to able to streamline their processes and organize their work. Today banks, credit unions, lenders and other financial institutions are scanning their documents to increase efficiency and streamline documentation. With document scanning services, banks and other financial institutions can digitize customer documents and validate information in an automated way. It also helps with efficient document management. With a proper document management system, banks can keep all the transaction records protected; it also makes audits a more agile and efficient procedure that minimizes the presence of errors.

Although banks have been able to reduce paper usage over the past few years, documentation still remains an issue in banks. Some of the challenges of document management in the banking industry are:

  • Strict document retention policy: The banking industry has very strict and rigid policy regarding retention and destruction of the papers created in banks or received by their employees. These policies are always updated and revised by legislative regulations. Storing documents is always a concern and it can ruin the data, or get it mixed up or even lost. The cost of non-compliance is exceptionally high. The bank may be subject to regulatory action or monetary damages.
  • Huge volumes of paperwork: Some banks are reluctant to embrace digital transformation because their clients trust paper more than the computer. According to Credit Cards, 54% of adults receive paper-based credit card or checking account statements by mail because they feel paper statements are much safer for their record. In banks, some records need to kept in digital as well as paper format as these documents include negotiable instruments and other original documents that are important for proving ownership or title transfer.
  • Inconsistencies in documents: While processing a business transaction, inconsistencies in parameters of the same documents is a major concern. The description of the document and meta data is different and this makes searching and retrieving a document file difficult. Such delays can lead to poor customer service.
  • Human errors: Banks use huge bulks of paper and clerical error is a common issue. This can lead to loss of trust in banks and loss of clients too.

All of these concerns can be eliminated by implementing a good document management system. 

Advantages of a Good Document Management System

  • Better customer service: Clients never want to wait, they always want to resolve their issues as soon as possible. With a document management system, it becomes easier to handle any request quickly. It becomes easier for account representatives to find information about different account types and banking options in a few seconds. This makes it easier to resolve client issues in no time.   
  • Regulatory compliance: The regulations in banking industry keep changing and keeping up with these changes is difficult. With a reliable document management system, you can have secure and auditable data capture that ensures compliance with key regulations such as global Payment Card Industry Standard, Financial Conduct Authority (UK), the regulations of the Consumer Protection Bureau (USA) or the European Banking Authority.
  • Better team work: In today’s fast-paced world, low productivity can lead to poor growth of the organization. A document management system helps to distribute specific responsibilities among the people in charge. The employees also get instant access to files that helps to take up their responsibility and ensure team work.
  • Financial advantages: Banking industry has several hard copies of client applications, financial statements, credit reports, mortgage, and loan agreements. With document management system, banks can get rid of any unnecessary paper-based data and printing cost. It also helps banks to reduce the time of each transaction.
  • Simplify audit trials: For banks, external and internal audits are important. So, keeping the financial reporting, correspondence, financial statements, internal document requests, and other vital documentation compliant with current laws and regulations is vital. With a document management system, it becomes easier to process data and this makes auditing easy.

Tips to Ensure an Efficient Document Management system

  • Improved search capability: Digitization becomes inefficient if it becomes difficult or fails to find a file easily. To function efficiently, banks want quick data retrieval by making the text document searchable.
  • Scanning and imaging: The document management software should be compatible with desktop scanners, so that it becomes easier to scan and upload to the DMS system.
  • System of permission: In large banks, employee access to sensitive information is hard. A system of permissions is the best way to protect all vital files from changing or accidental deleting and streamline the work with them.
  • Mobile compatibility: To facilitate remote access to bank data, like client application, loan agreements etc, document management system should be mobile compatible.
  • Updates: Banks should be informed about changes in a particular file or workflow in a timely manner. Proper notification system allows sending direct messages to users or groups with the latest updates.
  • Intuitive user interface: Document management systems should have a simple and user-friendly interface.
  • Cloud access: Cloud access makes uploading and downloading of data or forms from anywhere easier.
  • Audit trails: It refers to keeping track of every business transaction. It proves validity of financial information.
  • Reports: Good document management software should offer diverse reporting options. These reports should be classified by document type, category, loan type.

Document Management System is something that all banks should embrace to ensure smooth running of their institutions. Digitization of all bank documents with the help of a document scanning service makes it easier to implement document management. It helps to scan and handle large volumes of files and convert them into a single file, which can be stored digitally.