by John Garippa | 3/17/16
Though we are in the digital era, many financial services organizations remain highly dependent on paper. It would be easy to assume that the number of documents being filed is decreasing, but, on the contrary, filing volumes double every 10 years. Firms continue to receive and create an abundant amount of documents, ranging from applications to advisory agreements, statements, transaction confirmations and correspondence — all of which must be managed and stored in compliance with FINRA and SEC regulations.
Management of these files comes at a steep price. Consider the hard costs: storage, copy, labor and distribution costs. Then, there are the soft costs — some of which are highlighted in the following three facts.
• 80 percent of employees spend 30 minutes each day looking for information.
• 7.5 percent of documents are lost daily.
• The real cost to reproduce each document is $220.
Let’s say a firm with 1,000 knowledge workers files 1 million documents per year. The firm could potentially be wasting $16.5 million on reproduction costs alone. According to Novitex data, this same firm could be wasting an additional $3.5 million on lost productivity time used to search for lost files annually. Together, this is $20 million.
An effective digital document management solution can help firms be more profitable and efficient. According to Laserfiche, firms can save eight percent on annual overhead costs, the equivalent of $342,000 for larger firms, and increase efficiency, saving 6,000 hours for larger firms.
However, having the right solution is key. I have outlined three steps that financial services firms should take during any digitization engagement. They will help ensure firms develop and implement the right solution.
1) Understand the current state. This includes knowing the process and costs. This is easier to do in theory than in practice. For large firms, it is plausible that each division might have its own processes, with its own unique pain points. Siloed operations may make tracking costs down a challenge. Use industry benchmarking where data is missing.
2) Determine the future state’s return on investment. If the future state aligns with corporate strategy and priorities — which it should — demonstrate that employees across the organization will benefit from this solution. Also, quantify the additional soft and hard benefits, such as the revenue lift, risk mitigation, compliance improvement. Compare these benefits to the total investment: IT costs, implementation and end-user education.
3) Validate before you launch. Test before fully executing to ensure the solution will drive the planned improvements. Perform small-scale tests to determine that the project parameters and quality standards are met. During this process, check to see that documents are scanned successfully; image quality is acceptable; and images are in the correct order and rotation. Only after testing, launch.
John Garippa serves as the Vice President of Financial Services at Novitex Enterprise Solutions. He has a nearly 30-year track record of working with financial services clients to build and develop a broad range of document management services. Prior to Novitex, Garippa held roles of increasing responsibility at Pitney Bowes, Konica Minolta and Ricoh.