Six reasons why financial institutions are digitizing paper documents (Part 1)

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Across North America, we are seeing a rise in the number of document imaging initiatives by financial institutions. In a two-part blog post we explore the main reasons for this trend.

The growing trend for digitization
From loan documents, to investment files, to HR records, banks and credit unions are digitizing their paper files in greater and greater numbers. This is reflected in the projects we have been working on for the past few years, and the rise of document imaging RFIs and RFPs hitting the North American market.For example, in a typical scenario, we are working with one of the top North American banks on a project to digitize its legacy collection of loan documents.

Many financial institutions are also implementing “day forward” document imaging programs. In these scenarios, newly created paper documents are immediately digitized to avoid having to handle, store and manage paper. This is an excellent strategy to get started with document imaging and move towards more electronic workflows.

Why digitize? Why now?

Whether we are looking at legacy document scanning or day-forward scanning, the drive to digitize is driven by six main factors:

1. Real estate prices
Rising real estate prices (especially in urban centres where most banks operate) put pressure on business activities that occupy a great deal of floor space. When real estate is cheap, there is not much reason to do something with all of those paper loan files or HR records sitting on shelves. However, as prices have steadily risen, it has become harder for financial institutions to justify the cost of devoting so much real estate to paper collections.

2. Rising document management costs
The costs of managing paper documents are also growing each year. These costs include staffing, document retrieval, file delivery, shelving units, and even folders and labels. Every year, during budgetary review, these line items are coming under greater and greater scrutiny. In the face of rising paper management costs, more financial firms are seeing digitization as an attractive, cost-effective alternative.

3. Customer service
Digitizing client files delivers a lot of value from a customer service standpoint. Once digitized, files can be made instantly available to client-facing staff. This allows them to better respond to queries and to close transactions more quickly. In a competitive financial marketplace, anything that helps improve customer service is a big win.

We will continue our look at the financial digitization trend in next week’s blog post.

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