Study: Document Retention Best Practices of 94 Banks

How do financial institutions manage their document retention policies?

document retention study

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To answer this question, we recently conducted a survey of 94 community banks. You can download a summary report of the study here.

When given the opportunity to share frustrations about current retention policies, financial professionals shared a variety of concerns. For example, one banker stated:

“Our retention policy is not well defined at this point, and it does not include some key departments that should be imaged.”

Another said:

“We do image some items, but not all – and not all the same way.”

Visibility and control seem to be points of frustration for many of the bankers we surveyed. In this article, we’ll share the document retention issues many financial institutions are facing and offer you a closer look at the information revealed in our survey.

Formal Document Retention Policies

When asked about formal document retention policies, nearly three quarters (74.47%) of the banks surveyed responded that they do have policies on file. Surprisingly, a sizable amount (17%) of financial institutions surveyed did not have a formalized retention policy.

Document Retention Policy Study

Policy Updates

Most of the banks with document retention policies employ a predefined schedule for updating policies. Nearly 48% update their document retention policies annually, while 8.7% consider the policy a living document that is updated as needed. Approximately 25% of financial institutions responded that they update their policies “every few years,” while nearly 20% of respondents were unsure of how often their bank made policy updates.

To Shred or Not to Shred?

Deciding whether to shred or retain paper documents seems to be a decision that is split among multiple departments depending on the institution. According to our survey, 38% of institutions allow compliance departments to make decisions regarding shredding or retaining documents. Nearly 30% of institutions rely on their loan servicing department to make the call, while another 22% ask senior lenders/loan officers to make the decision.

What’s the Solution for More Effective Policies?

Confusion and lack of communication regarding document retention policies seems to be a pain point for many financial institutions. When offered the opportunity to share what causes stress, one banker shared that “it is hard to access the system and retrieve documents.” Another related, “Our imaging system is not reliable enough to be able to shred the docs that are scanned that do not need to be retained in paper format. My previous bank only kept notes, deeds, and title policies and a few other items on real estate notes. At this bank we have to keep huge bulky paper files.”

Of the 94 financial institutions surveyed, more than 75% employ document imaging technology to maintain electronic versions of files. Streamlining the document imaging process can alleviate the frustrations related to physically managing documents, but this survey reveals that having a clear document retention policy is important.

Streamline Retention with Better Imaging

Is your bank searching for a way to reduce stress around document retention? AccuSystems can automate document imaging workflows to make your document retention process clearer and easier.

Click here to request a demo of AccuAccount, the industry’s #1 document management software.

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