The following article was originally posted on BankNews.com. (Re-posted with permission.)
Each day your core system provides significant value to your financial institution. Processing payments, tracking customer transactions and balances, calculating interest, and generating statements are all in a typical day’s work for your core.
Although your core does many things very well, imaging may not be one of them.
In this post, I’ll share three reasons why your core banking system is probably not the best option for document management.
1. Your Stakeholders Can’t Find What They Need
Many core systems offer a basic document imaging functionality. Although better than relying on paper, core imaging modules are typically not designed with accessibility in mind.
In our discussions with hundreds of banks, we routinely hear the following challenges associated with a core-focused imaging strategy.
“The document structure is not intuitive.” Core imaging user interfaces are usually hierarchical in nature, which means you must know exactly what you’re looking for to find it. You might have to drill down several times just to locate a single document.
“It doesn’t resemble a loan file.” Moving off paper documents is a big decision for banks large and small alike. Although more than half of community banks now rely on paperless loan management technology, bankers still prefer systems that “look like” traditional paper loan files. Core systems rarely, if ever, meet such criteria.
“There’s no consistency.” Bankers often tell us that their core’s imaging system is too “open ended,” meaning that files are inconsistently named. One banker may use a certain nomenclature, while another might use none at all. This makes it even harder to find documents, especially when you need them quickly.
2. You Can’t See the Bigger Picture
Sure, a core imaging system can make it difficult to find and share documents. But what about the bigger picture?
For example, let’s say that an important customer walks into your bank and inquires about a new commercial loan for one of his many ventures. To make an informed lending decision, you’ll naturally want to evaluate the customer’s existing relationship with your institution. Unfortunately, your core may not make that very easy. Searching and clicking through the customer’s many accounts and collateral records could take hours of manual effort. The delay creates unnecessary friction with clients, but it also consumes precious man-hours.
Building off this example, let’s say the customer presents a certain piece of property as collateral for the new loan. It’s possible that this property has already been pledged on a prior note, but you’ll need to check in your core first. After a few hours of digging, you realize the property has indeed been used as collateral on a few other loans. You also realize that the documentation for that collateral had been scanned in three separate times, one for each of the prior notes. You think to yourself, “It sure would be nice if all three notes could share the same collateral documentation.” Alas, your core system doesn’t make that possible.
These situations are precisely why so many banks are turning to integrated document management systems and CRMs. Rather than clicking through dozens of folders and subfolders, third-party applications can present vital “big picture” data within seconds.
3. Exceptions are Getting Overlooked
Just because a document has been scanned and uploaded to your core, it doesn’t mean that your exception reports are accurate. Some cores have separate modules for imaging and exception tracking, creating countless hours of busywork for back office staff. Despite their best efforts, your team may also be prone to oversights when relying on such a manual workflow.
A better model, which can be achieved with certain integrated document systems, allows users to automatically clear exceptions simply by scanning or uploading the documents. Rather than jumping between ticklers and the core, your team can streamline the entire process.
Let’s imagine that your bank struggles to track insurance documentation. Each year, you mail out notice letters to customers, asking them to send proof of insurance. Some are prompt, but many require second or third reminders. Some even require a follow-up phone call or two. Managing this type of process can be next to impossible with your core system. On the other hand, an integrated document and exception system could greatly simplify the process. Instead of remembering to manually enter exceptions, the software can automatically build a pre-populated task list that’s specific to your follow-up workflow. As tasks become due, each team member receives an email, alerting him or her to take action. Once the missing or expired document has been uploaded, the task sequence can be configured to stop with no further action by your team.
The net result? Fewer exceptions, less confusion, and a much more scalable operation.
It’s Time to Find a Better Solution
Your core system is good at a lot of things. Imaging is probably not one of them. Spend time studying the inefficiencies caused by your core’s subpar imaging platform. Then, consider other third-party apps that can offer a better path forward.