Banks & Credit Unions
While personal growth may live at the corner of order and chaos, for banking operations professionals, the grass is definitely greener on the “order” side of the street. Throw in an energy and resource-sapping pandemic coupled with an $800 billion SBA loan disbursement program and that grass turns from green to a deep, Midnight Kentucky blue.
If only you could get your feet in that patch. Well, you can, and I’ll tell you how forward-looking financial institutions are doing it.
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Banks, credit unions and other financial institutions transact in documents every bit as much as they do in capital. However, while the industry has done a good job of improving the way it moves money (faster, more efficiently, and more securely), the same cannot be said about their document processing operations. The very same operations upon which financial transactions and the flow of money are based.
Inefficient, incomplete, and inaccurate document processing causes operational friction and bottlenecks that results in slower transaction turnaround times, needless duplicate data entry, lack of transparency, and potentially, admonishments and fines.
The bottom line is if your document processing capabilities are not up to snuff, you’re probably creating mediocre or negative customer experiences. You’re also frustrating employees who are already spread thin, and forgoing new revenue generation opportunities.
As tough as it was, lots of financial institutions used the events of the past two years as a rallying cry to reduce operational chaos by taming their document processing beast. They accomplished this by implementing intelligent document processing (IDP) solutions across the institution as a shared service. For many, IDP is the inception point of intelligent automation in banking.
By leveraging this new shared infrastructure, they were able to standardize common functions. And it allowed them to perform more effectively at unprecedented document volumes without adding staff.
The common functions they focused on? Intelligent capture, process automation and centralized repository services.
Intelligent Capture
Intelligent automation in banking starts with intelligent capture. This first step is all about standardizing the way documents enter the institution’s bloodstream and queue up for processing.
That does not mean these financial institutions mandate how to transmit documents and in what form. If only they had that kind of power. Rather, they established a multi-channel capture service that receives documents through whatever channel the sender prefers and in whatever form they choose. That could mean paper documents, email, file transfer or even fax.
Once the documents are received by the central service, machine learning automatically classifies the documents (i.e., what is this specific document) based on having seen documents like it in the past. Think of it as a digital “fingerprint.” When the service knows what the document is, it then leverages technologies like OCR to extract key pieces of data from the document for downstream processing.
To summarize, the intelligent capture service acquires documents, determines what they are, and extracts the information needed with little to no human intervention. That’s half the battle right there. And the kicker is that the sender is notified at every step of the process. Transparency abounds!
Process Automation
Once documents are received and queued, they go through a series of automations. These automations put the documents in front of the people who need to see them, at the precise time they need them. Automation also pushes the extracted data into the systems or applications that need to facilitate the transaction those documents represent. Process automation makes extensive use of technologies such as workflow, APIs and RPA. Think of process automation as the grease that makes the gears of a transaction turn smoothly.
Centralized Repository Services
At the end of the process, the documents go to a central location for secure storage. Indexed and fully searchable, documents are available to whoever needs them, whenever they need them, and from any context. For instance, a P&L that is part of a loan application can be repurposed for a different transaction such as a business line of credit.
By centralizing the repository and granting contextualized access, institutions better comply with corporate and regulatory requirements. They also eliminate lost documents and put an end to shadow files, especially those hiding in branch offices. A centralized document repository, which also houses documents related to transactions that do not come to fruition, makes audits less stressful. Remember, Section 1071 is coming. Putting auditors in a cold room hoping they will tire easily is not a strategy.
The best news of all is that implementing IDP does not require you to rip and replace everything you have. Nor do you need to implement it all at once. Rather, shared infrastructure is best implemented incrementally so it can be integrated with existing systems. Co-exist should be the watchword. If you implement these technologies incrementally, at worst, you’ll experience incremental gains. And depending upon your institution’s culture, ability to change and budget, incremental gains in the short-term lead to more substantial gains in the long-term.
Just keep in mind that each piece of the service you add should build towards a shared services strategy. And that strategy should have little to no overlap with point solutions. If you are implementing shiny new systems that perform the same functions as shared infrastructure, you could be building the next beast that needs taming.
Want to learn more about how to get started with intelligent automation in banking?
Watch our on-demand webinar, Why Taming Document Chaos is Key to Everything.
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Banks & Credit Unions