HELP Financial Institutions Comply Cost-effectively1 Apr, 2010 By: Laurel B. Sanders imageSource
HELP Financial Institutions Comply Cost-effectively
Compliance is necessary for public accountability, but
managing it is costly. According to the Credit Union National Association’s
Newswatch, 17 major federal laws affecting credit unions were introduced between
mid-2009 and early 2010; the banking landscape is similar. This year’s
legislative agenda promises a continued stream of changes. Each will bring
unique directives, but institutional needs remain unchanged: document control,
process control, and cost-efficient compliance.
Why Compliance is Expensive
Governance requires extensive documentation. Each time financial institutions
add products and services, new laws emerge to regulate them. Mergers,
acquisitions, and restructuring further complicate governance. Typically,
changes demand new policies, forms, and procedures, altering how data is
collected and processed. Each demands procedural re-training and meticulous
Compliance: Balancing Control with Cost-efficiency
Controlling how documents are accessed and used is vital for compliance, but
in paper and mixed-media environments it’s time consuming. Digital environments
can help institutions achieve cost efficiency and compliance, but only when
access to business-critical information is centralized, secure, and controlled.
Electronic environments improve accuracy, increase
security, eliminate redundancy, and expedite processing. Smart equipment like
high-speed scanners and form processing software automate data entry, capturing
information quickly and accurately. Yet without an overarching strategy,
ungoverned document silos emerge, hindering efficient search.
Electronic capture streamlines data entry costs and lays
the foundation for information usefulness. When you add web-based electronic
document management (EDM) and business process management (BPM) and integrate
them with essential business systems, you create a single, strong foundation for
document control, process control, and cost-efficient compliance.
1. Document control
EDM institutionalizes governance, specifying who can access and manipulate
information, contingent on employee roles and job requirements. Technology
assumes the compliance burden, ensuring individuals only interact with files
according to an institution’s rules.
Thorough data classification, layered security,
configurable search and central access to pertinent information end redundancy,
save time & reduce errors. Capturing documents into a central, web-accessible
repository regulates access throughout the document lifecycle, wherever and
whenever files are needed. When customers open accounts or apply for loans – or
workers process mortgages, credit applications, or investment forms – access to
relevant, accurate information is quick and sure.
2. Process control
Process control - managing how employees process tasks and what they can do
with the documents they need to complete tasks - is equally essential to
compliance. Browser-based workflow ensures all employees follow procedures and
process tasks correctly, wherever they are. An automated BPM solution means:
- The movement of information can be automated between
branch offices, ensuring
- Transactions are handled consistently;
- Real-time reports can be generated;
- Turnaround and cycle times are shorter;
- Service improves.
Digital processing standardizes internal controls, ensuring
process consistency. Compliance officers can easily compare documented policies
to process execution.
As process consistency increases, administrative costs also
decrease. Rather than wasting time prioritizing tasks, chasing signatures or
approvals, or reviewing procedures to ensure compliance, knowledge workers
proceed with confidence and can turn their attention to areas demanding human
Using control to achieve cost efficiency
Opening new accounts, originating loans, processing mortgages, and managing
investments are expensive services. Managing voluminous documentation and
communications requires manpower.
Electronic processing dramatically reduces overhead.
Indexing information (such as document type and due date) can drive task
distribution to appropriate work queues. Documents sequentially follow approval
hierarchies; files can be migrated to long-term storage using retention dates;
and more. Administrative savings of 15 – 50 % within one year are typical.
Equipping the mobile office
Business mobility demands are making browser-based solutions essential,
providing additional opportunities for sales. Browser-based, rules-driven access
to files and work means equipping IT administrators, managers, and employees
with their preferred digital devices (laptops, PDAs, digital signature pads,
portable scanners, and more) so they can keep work moving. Workers can manage
information and work appropriately, 24/7; system administrators can monitor
systems, reconfigure settings, and provide support without unnecessary trips to
the office, eliminating downtime.
Policies are followed regardless of employee location.
Transactional audit trails provide the transparency that auditors and courts
demand. Secure desktop access to the right information, whenever it’s needed, is
a huge step toward cost control. Using BPM software to automate the labyrinth of
processes that drive business forward exponentially increases efficiency.
Automating replicable processes saves precious resources. Instead of chasing
information and monitoring everyday processes, employees focus on being
productive, confident their work is compliant.
Lower your clients’ up-front investment
A weak economy, tighter cash flow, and stricter lending rules have made
financing hardware difficult for some institutions. Leasing is a cost-effective
alternative for small branches to finance needed equipment. It may initially
produce less revenue for you than direct purchases, but equipment, supplies, and
service contracts ensure a steady revenue stream.
Software as a Service (Saas) is software’s version of leasing, but security
concerns and the inability to access data can arise if a vendor’s business
fails. Outright purchases require greater up-front investment, but should ensure
data ownership. Similarly, subscription pricing models address security of
ownership, but without the up-front costs. Understand what you’re getting. A
fair price for a sound solution is better than a cheaper price for the wrong
Services revenue can be considerable, depending on needs. As clients become more
cost efficient, they envision new ways to use their solution. They may need
services for systems integration, document and process analysis, training,
equipment servicing, data migration, or disaster recovery planning. Your can
grow your revenue by:
- Understanding their everyday processes and business
- Knowing how hardware and software work together to
address those challenges;
- Meeting expectations and delivering ROI within a
Solution-based selling requires expertise and experience.
Get help when you need it. Know your capabilities and your limitations.
Make compliance easier
Compliance isn’t optional. As regulatory complexity increases, you can help
clients tremendously by partnering with vendors to offer solutions that will
make their jobs easier. There are many chances to garner a steady revenue
stream. Earn customers’ respect, loyalty, and future business by providing
exactly what they need.
Laurel Sanders is the director of public relations and
communications for Optical Image Technology. For information about the
company’s award-winning suite of DocFinity software, visit www.docfinity.com