Published On December 20, 2022Despite the proliferation of mobile devices and personal computers, paper is so entrenched in bank branch operations that it’s easy for leaders to lose sight of the possibility of doing without it. But while paper is necessary for some compliance scenarios, most contracts, statements, forms, and reports can easily be rendered digitally.
All of these paper documents can be scanned and recognized with near-perfect accuracy. Deloitte has estimated that by eliminating paper from its processes, a large retail bank can reduce operating expenses in its processing divisions by as much as 25% and cut records management costs by up to 70%.
Here is why paper is holding back your bank branch from being more productive and responsive.
1. It’s easily damaged or lost.
Paper documents are fragile. They are easily torn, smudged, dropped, burned, and mangled in copy machines. A misfiled printed document can be almost impossible to find, making it effectively lost in plain sight.
2. It can’t be searched.
A survey by the Chief Marketing Officer Council found that speed of response was the number one factor influencing customer satisfaction. Yet a customer who calls a bank asking for copies of checks written over a five-year period is likely to encounter multi-day turnaround times and fees for the labor costs of digging through files and boxes to find them. One survey found that 36% of information workers said it’s difficult to find the most recent version of a printed document most or all of the time.
3. It can only be processed serially.
Paper is the great bottleneck of process improvement. The most streamlined workflow is easily throttled by one person who falls behind, takes a vacation day, or mistakenly drops a document behind a filing cabinet. Making copies creates versioning problems and security risks.
One of the great innovations of digital workflows is that they enable multiple people to access and update the same information simultaneously with versioning, data protection, and accountability. Copies aren’t needed because everyone has access to one version of the truth. Converting linear processes to parallel ones yields orders of magnitude improvement in speed and productivity. Teamwork also improves because people can share and comment on documents in real-time.
4. It takes up space.
It’s been estimated that a four-drawer file cabinet holds an average of 10,000 to 12,000 documents, costs $1,500 per year to maintain, and consumes up to 17 square feet of space when accounting for the room needed to access it. The average price for office space in the United States was just over $35 per square foot in 2020. In New York, it was $81. Those 12,000 documents can be scanned and stored on a secured platform for less than $100. What could your branches do with that extra space saved?
5. It wastes time.
McKinsey estimates that US companies spend over $5 billion annually on manual data entry and that error rates for hand-keyed data run as high as 4%. In contrast, today’s intelligent optical character recognition systems achieve accuracy rates of better than 99%, making it both lower cost and more accurate than manual data entry. Making information digital from the start eliminates conversion errors entirely.
6. It’s bad for the environment.
We all need to be more thoughtful about the environmental and social impacts of our business decisions. For example, using paper from unknown sources can inadvertently contribute to environmental problems like deforestation, loss of critical habits, and wasteful use of resources. Making informed decisions about process and system design (i.e. data centers and corporate end user devices)—supported by thoughtful supply chain and vendor choices capable of full life cycle impact assessments—is a critical step in operating more sustainably. At the end of the information life cycle even responsibly sourced paper should be shredded to ensure no data privacy losses and then recycled to allow it to become stock for new paper.
7. It’s a compliance headache waiting to happen.
Retention schedules require banks to continually purge records beyond a designated expiration date. Regulatory requests can specify deadlines of as little as 48 hours. Maintaining compliance with such rules can require sifting through thousands of paper documents, a monotonous and time-consuming task. Digital records can streamline this process and help mitigate unnecessary compliance exposure.
Going paperless doesn’t have to be a “big bang” affair. Bank branches can transition smoothly at their own pace by adopting online applications incrementally. Machine learning algorithms enable experts to “teach” computers to recognize elements in documents and continually improve the quality of their recognition. Scanning can even be moved offsite to minimize operational disruption. In this way, bank branches can go digital without interrupting day-to-day operations.
Learn more about how Iron Mountain can digitize and automate your bank branch processes.