It’s time to go paperless: are bank branches ready?

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By digitizing customer records, operational records, and legacy records, banks can gain improvements in accessibility, efficiency, and compliance.

December 12, 20237 mins
It’s Time To Go Paperless: Are Bank Branches Ready?

When the chief banking officer of a $10.3B community bank visited a competing super-regional branch in her suburban New Jersey neighborhood, she noticed something troubling.

Piles upon piles of paper crowded the branch manager’s desk and cluttered the nearby credenza. Set amid an open floor plan, the stacks of files left sensitive customer information—business and personal, loans and deposits—available for all to see.

Today’s rapidly rising rate environment is driving activity across the country’s 72,000 bank branches. Those branches, and their operational sites and processing centers, are full of paper. As most banks maintain a hybrid of physical and digital records, front-line branch associates struggle to provide a friendly, frictionless customer experience.

What the chief banking officer understood while visiting a competitor’s branch was both the complexity and the necessity of digital transformation, including paperless initiatives. Her bank, currently undergoing an acquisition, has conducted five mergers in the past ten years and consolidated approximately 40 branches. In each case, they contended with volumes of new and decades-old paperwork.

By digitizing customer records, operational records, and legacy records, banks like the one led by the chief banking officer see improvements in key areas: accessibility, efficiency, and compliance.

Consider the following real-world scenarios.

  • A tier 1 North American bank digitally transformed more than 1,000 of its branches. They determined and executed a ‘store versus destroy’ strategy for paper documents based on client classification and record retention schedules.
  • A global bank with more than 1,400 branches in Latin America indexed critical customer data. This freed up branch space by eliminating stored boxes of paperwork. They achieved a secure chain of custody with files in an electronic repository. The correct documents were then put in long-term storage to meet compliance requirements.
  • A tier 1 US retail bank tackled paper at more than 5,000 of its branches. Information is now secure and easily accessible to branch associates leading to better customer service. The bank stored needed information and safely destroyed the rest.
  • A large financial institution acquired a smaller bank. They organized and secured assets from 30 redundant branches and office locations to rapidly prepare for closures.
  • A small regional bank securely disposed of IT assets across five branches and a data center as it began a massive upgrade to its backend and customer-facing technologies.

‘It’s Not Really About the Paper’

Some market analysts predict the extinction of paper banking in the next decade. In response, leading financial services organizations employ cloud-based solutions combined with artificial intelligence.

Of the top 50 US banks, 46 work with Iron Mountain, a company known in the intelligent document processing and content services platform markets. More than 2,500 financial services institutions, almost all Fortune 1000 companies, and thousands of local enterprises rely on Iron Mountain’s solutions and services.

These industry leaders are hastening a digital transformation—one that promises to show a return on investment in less than 18 months, reduce the risks of non-compliance, and save 40% of employee time.

Working with bank branches, Iron Mountain experts customize the right software implementation and integration with existing systems. Ultimately, they find the most efficient and risk-averse ways to scan, process, and securely store or destroy physical documents. Electronic information gets encrypted with restricted access and role-based permissions. Documents from other locations, such as cloud repositories, enterprise content management systems, and file shares, can be accessed for enhanced visibility and connection. Using optical character recognition technology, documents are searchable by text or index, available for many file types and in many languages.

Though reducing space-hogging stores of paper does shrink the branch footprint, “it’s not really about the paper. It’s about the data within those documents,” said Olivia Markbreiter, a Principal Advisor at Iron Mountain.

“When you open a customer file, you really can be reading their life story: when they opened their account, if they have a spouse’s account, if they have their children’s accounts or a business account,” Markbreiter said. “So, the challenge here is not just about paper but how we get all this data into a digital format and a unified customer profile.”

That customer profile helps the branch optimize customer service, as does the use of technology to sort paper files rather than assigning tellers to the task.

Artificial intelligence technology—available in Iron Mountain’s InSight software—can spot elements such as names, Social Security numbers, customer ID numbers, check amounts, and addresses. Then, it automatically indexes records based on any specified criteria. This means legacy paper documents merge with online records for a more complete digital profile that can be queried, searched, and integrated with automated workflows.

What’s Taking So Long?

If digital transformation were easy, everyone would have done it by now. What makes the move to paperless uniquely challenging for banks comes down to three things.

  1. Uncertainty: Many banks are unsure about their inventory—exactly what’s in all those boxes and cabinets. Wary of regulatory compliance, they need a strategy around which papers to keep and which to destroy. Also, they must be mindful of minimizing disruptions to banking operations and daily customer service.
  2. Volume: Across hundreds of bank branch locations, each has its own circumstances. One might be new with a digital-first mindset, while another is an acquired branch with decades of records. There’s just so much to sort through. Inside every branch sits 100+ different document types with distinct data points, taxonomies, and retention periods. In hybrid environments, additional care must be taken to reconcile digital files against physical documents.
  3. Complexity: Many banks have gone through acquisitions, divestitures, or consolidation, leading to a great commingling of files. To untangle the snarl, records must be reviewed at the document level. And internal decision-makers must agree on how to index and tag each document.

Time to Play ‘What’s in the Box?’

After years of supporting financial services clients with their digital transformations, the experts at Iron Mountain recommend a sensible and effective approach for bank branches.

  1. Determine objectives. Identify pain points, places where digitization can have the most impact. For some branches, this might mean improving the customer experience with customer-facing technologies such as mobile banking, digital contracts, and self-service money management. Others may need to boost internal efficiency by digitizing documents and automating workflows for productivity gains.
  2. Make an accurate assessment. Determine how much paper the branch uses, creates, and stores. Note the number of filing cabinets and how much space they occupy. Have floods or other events damaged legacy records? Are there information gaps?
  3. Look for quick wins. Find ways to go paperless, perhaps with customer statements. This alone would yield a significant cost reduction and provide environmental benefits. Plus, it’s more convenient for the customer.

An ideal starting point is to talk to a professional in this arena. Iron Mountain’s team works with thousands of bank branches to consult and customize solutions that address objectives as well as pain points. They know how to reduce the risk and stress illustrated by the chief banking officer who witnessed an all-too-common scene of associates overwhelmed by paper. Not only will digital transformation declutter branch desks, but it will also enhance compliance, increase efficiencies, and protect sensitive customer information.

For more information and support with becoming a paperless branch, learn about the Iron Mountain Digital Bank solution.

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