ECM for Banking and Finance: Looking Beyond Document Management

Competition, mergers, and regulation within the financial services industry have led to dramatic changes in the way that banks and credit unions conduct business. Historically, transactions were the main priority of lending institutions. Now, banks, brokers, mortgage companies, and credit unions find themselves responding to constantly-changing customer needs. Institutions are likely to concentrate on cross-selling, up-selling, improving access to data, and other activities that strengthen the customer relationship.

To be successful in a competitive marketplace, lending institutions require tools that enable them to gain a complete overview of their customer transactions. Usually, this involves the ability to access information that is housed in legacy systems and to search both structured and unstructured data. At the same time, they must demonstrate strict adherence to regulatory compliance mandates. Organizations with paper-based processes are at a severe disadvantage when it comes to efficiency and productivity. At the same time, lending institutions that have transitioned to electronic processes without considering interoperability may not be getting the most out of their investments in technology. Fortunately, enterprise content management (ECM) software has evolved to serve the needs of banking and finance organizations in their efforts to optimize customer service, address regulatory responsibilities, and improve accessibility to information.

Bank examinations: minimizing your risk

Supervisory agencies are required to periodically evaluate assets and liabilities; competence; and compliance with regulations. Under a system that is paper-based, these evaluations can be disruptive and extremely drawn out. Auditing and examination teams set up shop within your institution for weeks or months at a time while they evaluate commercial loans, credit files, loan portfolios, and additional information that might indicate risk factors. Massive accordion files have to be located, retrieved, and scrutinized. Files are pulled apart and reconstructed; they potentially could be lost, duplicated, or misplaced.

Even for organizations that have transitioned away from paper processes, bank exams can be tedious if data is not easily attainable. Many financial service organizations house customer and financial data in mainframe and legacy systems that are not readily accessible from other applications. Consequently, their electronic systems—sometimes functioning less efficiently than their paper-based system—may not address the need for increased organization during Safety and Soundness and other exams.

An ECM system can dramatically increase the efficiency of the entire examination process, often shortening its duration by days (and in some cases, even weeks). Examiners have quick, immediate access to files, COLD reports, and records, minimizing the disruption to your business process. They can even be granted the rights to view data securely from an off-site location, minimizing office disruption. Electronic access to information offers greater benefits than mere convenience. The continuity of files remains intact; staff resources are not expended; and office space is freed for better use.

Lessening your regulatory burden

Unfortunately, it is unrealistic to think that your organization can completely eliminate risk. Strategically, you should plan to enact procedures that enable you to manage and minimize risks. The most important step in terms of compliance with MISMO requirements, the SEC, Sarbanes-Oxley, Basel Accords, and other regulations is to evaluate your processes. Before you enact automation in an effort to improve accountability, make sure that you understand the processes you are automating. Are there areas that, upon examination, might be simplified? Is it possible to eliminate manual document routing for any of your routine processing? If processing requires further scrutiny from one or more of your staff professionals, can you initiate a means to handle exceptions automatically?

After you are confident that you have optimized your processing efficiency, consider implementing automated workflow. In addition to establishing internal controls by dictating the paths that processes will take, workflow can provide documentation to prove that processing paths are followed consistently. By automating your processes, you can be assured that you have the security in place to guarantee that the right people are seeing the right information and signing off after tasks are completed. Audit trails address compliance requirements by serving as indisputable evidence that controls are in place that reflect established policies and are being followed.

Scanning or image-enabling your documents is a great way to start increasing efficiency. Bear in mind, though, that reducing paper throughout your enterprise really is just that—a starting point. As one of the most highly-regulated industries in the business world, you have to take advantage of the other benefits that ECM technology has to offer in order to compete.

With automation, your organization can be assured that documents will be retained and/or purged in accordance with the retention schedules you have in place. This will minimize work for your organization if you are ever required to produce documents in response to a subpoena. Retention schedules can be provided to regulators, and audit trails can confirm that retention and disposition are not subject to the potential for human error. Furthermore, having metadata in a database makes it easier to write reports as needed to address your specific compliance needs.

Connecting to information housed in legacy systems

Banking and finance organizations that have transitioned to electronic processes but still have difficulty accessing corporate information are not getting the most out of their technology investments. The inability to access legacy systems makes it extremely difficult—if not impossible—to standardize processes. Data silos that are accessible only to certain departments are little better than paper filing cabinets. They can interrupt the flow of processing as readily as a locked metal drawer.

Legacy systems make access and communication difficult. Usually they are used for proprietary processing within departments. As institutions merge, however, the issue of systems that are unable communicate with one another—whether they are legacy, mainframe, or other systems—becomes compounded. Sometimes one institution will use different systems to track the same customer. When customers request name or address changes, these silos make it difficult to perform changes universally. Often, legacy systems require specialized IT support.

A robust ECM software implementation allows authorized persons to access information securely, regardless of where it is housed. Web services facilitate communication with your software applications, regardless of the platforms on which they reside. ECM image-enables your information and allows you to store it securely within a single repository. It can even provide your customers the option of self-service over the web. Information is available instantly with the click of a mouse.

A true enterprise approach

The thought of impending bank exams can make even the most steadfast managers tremble. An ECM system that truly unites your operations can ensure that examiners will have easy access to the information that proves that you have controls in place and are following them. ECM brings ease and efficiency to your enterprise, and ensures that you are able to get a complete overview of your customers and operations. The banking and finance industry has evolved significantly in the past several years, and so, too, has ECM. Isn’t it time that you learned more about its capabilities beyond document management?

For more information or to schedule a demonstration, please Contact DocFinity now.