Managing Dormant Accounts: Reducing Risk via Integration

Dormant accounts pose a serious risk for financial institutions of all asset sizes.

Although some of the responsibility for maintaining account security should fall on your customers’ shoulders, your institution is by no means off the hook.

To prevent dormant accounts from falling into the wrong hands, most banks and credit unions have internal policies for limiting internal access. Unfortunately, such policies are difficult (if not impossible) to follow without the right document management structure.

In this post, we’ll explore why a core-integrated imaging and workflow system reduces risk when it comes to managing dormant accounts.

The Challenges of Restricting Access

I’m sure your core system does a good job of tracking account dormancy. However, can it automatically restrict access to linked documents when accounts become dormant?

Probably not. Here’s why:

Paper Files are Still Prevalent: According to our study of 103 bankers, a considerable percentage of community banks and credit unions still rely on paper documents. When account documents are in paper format, restricting access is a very labor-intensive process. Someone with proper access must physically go into the records room, locate the correct files, and then determine appropriate next steps. Of course, this all hinges on the accuracy of your tickler and your staff’s ability to follow up in a timely fashion.

Shared Drives Can’t Be Linked to the Core: Some institutions manage their customer records on internal shared drives. Searching through dozens of directories and subfolders can be tedious work. What’s worse, if a customer’s account ever moves from “dormant” back to “active,” someone must remember to derestrict the files. It can be a never-ending cycle.

Core Imaging Systems Are Usually Just Repositories: Surely your core has a solution for this problem, right? Sadly, many core imaging systems are nothing more than glorified shared drives. Few offer native solutions for linking account access to account status.

An Automated Way to Restrict Access

Among the many benefits of using an integrated, third-party system like AccuAccount, dormant account management is certainly noteworthy. Unlike manual processes that rely heavily on ticklers and manual effort, AccuAccount synchronizes nightly with the data in your core. As accounts change from “inactive” to “dormant,” the matching records in AccuAccount are automatically updated.

Inactive Account

Once AccuAccount updates an account to be “dormant,” the branch field can also automatically change to a “dormant branch.” Users only with the proper permissions will be permitted to view accounts linked to this branch, thereby delivering the control that your financial institution needs.

Dormant Branch

AccuAccount also keeps an eye on any dormant accounts that have changed back to “active” status. When this occurs, the restriction is automatically removed by the system, placing the account back in the original branch and restores normal levels of visibility.

Automate Your Dormant Account Management

Maintaining tight controls over dormant account accessibility is an important way to manage risk – especially in the modern banking environment. To see how AccuAccount can hedge your bank’s risk related to dormant accounts, click here to schedule a free demo of our software.

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