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Paperless Banking – The Dream is Real

By Joe Trafton, Senior Vice President, COCC

Decades have passed since the financial press proclaimed that a “Checkless Society” was close at hand. Check 21, image statements, computer output to laser disk (COLD), and document scanning brought banking’s paperless dream closer to reality. But business complexity and regulation have continued to inflate the paper monster, making bankers wonder if paperless banking would always remain a dream.

Today the news is that paperless banking is alive and possible – not just for super-regional institutions with bottomless technology budgets, but for community banks who have the vision and desire to move the paper mountain.

Essential components for success with paperless banking involve several next generation technologies:
 

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  • Document management to collect, organize and locate the statements, account applications, loan portfolios, notices, receipts, signature cards and appraisals generated by the daily business of banking.

  • E-Signature to keep the bank’s applications and forms all electronic. Most of these documents are electronic already, but they get printed for signature and then scanned into the document archive. E-Signature stops the paper madness.

  • Robust communications and security so that bank-wide, everyone who needs access to documents gets access, no matter if they’re in the office or at a customer location. This works well for off-site loan originators and auditors who are often given access to an originator’s or auditor’s ‘folder.’

  • Check image capture (branch or teller), remote deposit capture, and image ATMs to convert paper checks into images at the point of origin. Paper never leaves the bank.

  • Online account opening, maintenance, bill payment, and more to prevent paper from entering any banking process.

Do any of these technologies sound like ‘plug and play’? Of course not. Inserting technologies this deeply into a bank’s operations provides an opportunity for the bank to thoroughly review its workflows, information needs, and security.

Why? Because paperless banking’s real contribution to bank efficiency lies in managing paperless business processes and establishing best practices.

Paperless banking opens the door to automating time-consuming processes, such as account opening, archiving, search, and access, Employees will cut the time spent searching for paper documents by 95% or more. Executed forms are available within minutes of e-Signature. Every search is documented for audit purposes.

Technology investments at this level should include custom installation services coupled with training and workflow design. This will ensure that bank staff understand how paperless banking can raise efficiency bank-wide. It can also be a catalyst for employees to discover new ways to generate savings with paperless technologies.

One of the most important generators of paperless banking savings is customer adoption. With e-Statement adoption hovering at 20-25% nationwide and remote deposit capture at 1% of all U.S. businesses, there is a lot more room for growth in paperless banking.

Banks might consider selling paperless banking technologies to consumers and small businesses as a gateway to efficiency as well as a ‘Go Green’ product. Consumers who use e-Statements can find their transactions more quickly and eliminate filing cabinets in their houses. Small businesses that use remote deposit can save thousands of dollars each year by reducing the time needed to prepare and verify deposits as well as drive to and from the bank.

When community banks and their customers see the savings available from paperless banking, adoption will certainly rise above the current disappointing levels. We will save a great deal of money while preventing tons of carbon from entering the atmosphere each year. That’s a dream worth making real for everyone.