Trends and needs of the banking sector
Current trends in banking include the incremental implementation of partial digital solutions with an emphasis as follows:
- mobile and online banking,
- development of digital payments and
- exploring the potential of new technologies such as Blockchain.
According to available data, back in 2011, banks allocated almost $ 13 billion globally for investments in digital channels, and a third of the total digital budget was allocated to mobile banking. But it is important to know that inherited business processes related to physical documentation no longer meet and support the requirements of efficient business, nor today’s digital-minded clients.
This means that it is necessary to consider a cohesive digitalization strategy that encompasses all document management processes in order to realize savings, reduce risk and increase security as an imperative of any modern business.
5 areas of digitalization of work with documents
When digitizing the work with documents, it is necessary to take into account their entire life cycle – from creation within the system or from entering the system, to storage or exit from the system. The implementation of digitalization itself is carried out through five basic areas:
- Digitization of documents
- Content management
- Process automation
- Process optimization
- Process transformation
1. Digitization of documents
The basic idea is to create all new documents in digital form, and to digitize those received in physical form. This will reduce the physical archive, create instant access to documents regardless of the user’s location, and eliminate the possibility of losing documents.
Therefore, the digital business strategy should include the implementation of a unified solution for retrieving data from various sources such as: scanners, MFPs, email, virtual printers, Office plugins and various ways of local import (watch folders, etc.) through fixed or mobile clients. In addition, the solution should support the central management and administration of all relevant business digitization processes, available for all office and mobile business scenarios.
2. Content management
In order to meet the basic requirements of digital business within the given framework, banks today must take into account the constant increase in the number of state regulations and standards, as well as those related to data security, with the ever-present corporate regulations. Related information management rules must be integrated in applications of ECM (Enterprise Content Management) solutions.
Therefore, the digitization strategy must take into account:
3. Process automation
The basic premise is to reduce the number of manual actions, and is based on the introduction of electronic forms with automated population and data transfer between different platforms and entities, with automation of the signature process regardless of the number of signatories. This significantly optimizes and speeds up client interaction processes such as account opening and credit requirements, as well as related background processes.
4. Process optimization
Despite the popularity of online and mobile banking, there are still a large number of manual processes in banks that are slow and costly and leave room for error.
Considering end-to-end processes and reconstructing IT architectures leads to increased efficiency so that banks can have much smaller operational units performing value-added tasks, including complex processes such as contracting and activities that require human intervention, such as financial audits.
5. Process transformation
The process of transformation into digital business involves the use of new technologies in order to change business models and create new opportunities for revenue and business value growth. We achieve this by transforming the user experience, products and services, processes and organizational culture/way of working.
According to Forbes Insights, Accelerate Business Value with Intelligent Automation (2019) – process transformation – from manual to fully digital work means to:
- Reduce paper consumption and direct costs associated with these operations
- Automate operations
- Increase security and reduce the risk of fraud
- Adding and connecting digital channels (mobile and online)
- Self-service and proactive user engagement with personalized communication
- Data integration between banking systems and external sources
- Automate compliance for regulatory and audit purposes
- Analyzing the process to determine what happened, what could happen and what needs to be done
6 steps of digitization of work with documents
Business processes in banks are mainly based on paper documents that often limit process changes. Therefore, it is necessary to carry out project activities at the strategic level with the aim of digitizing all documents that the organization creates and receives.
The implementation of such a strategy takes place through the implementation of standard projects in 6 steps:
- Paper dematerialization – advanced electronic signature
- Digitization on all channels – qualified electronic signature
- Creating a hybrid archive
- Automation of background work in the branch office and at the central location
- Automation of internal processes in the bank
- Support for structural decision-making in the bank
Paper dematerialization - advanced electronic signature
One of the first digitization project ideas in banking is to optimize the consumption of FTEs and reduce operating costs in the branch. In day-to-day operations, the largest amount of documents is created by the bank and verified by the client with one or more signatures at each payment or withdrawal at the counter. Such documents make up from 50% to 80% of documents that are operationally processed in branches and make a large cost in business.
The implementation of the advanced electronic signature, which establishes the identity of participants in electronic business and ensures data integrity, retains a similar user experience, with the ability to choose a printed physical document or an electronic document sent by email or within mobile banking. It can also be easily and quickly integrated into existing environments with minimal development and integration needs and the involvement of the bank's IT department.
Digitization on all channels - qualified electronic signature
The idea is for the bank to enable its clients to sign digitally (without going to the branch) within the bank's business processes, without the client going through a lengthy and complicated procedure with a third party.
For this purpose, the bank enables the identification of the client according to the valid AML and KYC regulatory requirements, and accordingly the client receives the necessary qualified certificate so one can sign documents, ensuring the irrefutability of the verification action carried out.
Creating a hybrid archive
Regardless of whether you received the document in paper or digital form, using the hybrid archive model, the application of one interface enables the availability of information where each archived document is located, so that the appropriate document format can be used in an optimal way and according to the business scenario.
The centralized hybrid archive provides support for the operation of background services and branch services through:
• physical positioning of records (temporarily in branches or permanently in storage),
• dematerialization of physical documents and permanent storage in digital form,
• integrated management of electronic documents in a consistent and efficient way from creation to extraction,
• easy management via integrated or standalone interface,
• integration with various mechanisms and systems to ensure long-term invariability and indisputability of data such as the use of archival electronic timestamp and CAS (Content-addressable storage) storage system.
Automation of background work in the branch office and at the central location
The primary goal of automation is to assist in the implementation of repetitive tasks. Regardless of the process, you can work in a unified way to accept all physical and digital documents such as:
• payment orders,
• barcoded documentation,
• loan documentation,
• GDPR sensitive documents, etc.
Acceptance is followed by sorting, indexing and, if necessary, OCR in the scanning process. Document processing and automation starts from the same interface and is automatically routed and stored to a dedicated location. Thanks to RPA (Robotic Process Automation) technology, you can leave all repetitive tasks to software robots.
The collected data is checked by queries according to the logical rules of the ERP system, ECM system or any other source of information, in order to increase accuracy and prevent errors in the further course of processing.
Automation of internal processes in the bank
By digitizing documents that participate in internal processes, you open the way to their automation. Protocol, procurement, invoice approval and complaint management are just some of the processes you can partially or completely automate.
Also, it is always necessary to apply end-to-end consideration and coverage of the process. On the example of the process of procurement and contracting of services to third parties, this means a system that supports the implementation of the process from procurement requests to the distribution and realization of contracts.
Numerous HR processes are also subject to automation and the application of artificial intelligence in order to speed up the management of the subject documentation and ensure quality management in the selection and retention of human resources,with special emphasis on the legally prescribed possibility of using a remote one-time or long-term qualified electronic signature.
Support for structural decision-making in the bank
Making business decisions that will create new values for the bank and improve the user experience depends on the information on which it is based, so it is important that all that is relevant are available in a timely manner.
Therefore, with the appropriate platform, the digitalization of business additionally enables faster and simpler management of meetings, committees and sessions, in order to quickly make quality decisions and ensure their implementation while reducing costs.
Such a platform, to support structural decision-making, should allow for centralized management of: proposals, meetings or sessions, tasks and their implementation, while reducing the possibility of human error.
Of course, all functionalities are available on any device to ensure uninterrupted remote operation.
By implementing a solution to support structural decision-making, the process of preparing and holding meetings of all bodies of the bank is standardized and becomes more productive, and the result is an improvement in the efficiency of the entire business.
Business development manager