Banking & Financial Services White Paper Trust operations improve via electronic document management By Irving Levy, President I. Levy & Associates, Inc. Every day, trillions of dollars are electronically transferred in financial markets around the world. Transaction processing in the financial industry is moving forward at a steady rate. Money is moving faster and faster as financial institutions find themselves under increasing pressure to automate their legacy systems just to stay in the game. Client-server, Electronic Document Management, Object-Oriented Workflow and COLD technologies are making major waves in the industry with their claims of boosting productivity and improving customer service. Bank executives deliberate whether to take on these emerging technologies. They know the implementation of any new system involves risks. The introduction of these technologies into financial institutions means breaking old habits, such as relying on paper files. Some bankers are anchored to their paper-based systems, reluctant to change established procedures. They don't want to change their ways and let go of the security of their current methods. Although the move may be risky and difficult, the evidence points to the fact that embracing these new technologies is imperative if banks are to keep up with the rapid pace of the financial industry. Placing trust in electronic document management Trust departments in banks epitomize the paper-based problems that electronic document management systems were designed to alleviate. They are probably the largest contributor to the banking systems' paper overload. Trust operations involve massive amounts of paperwork with no two trust accounts containing the same documents. Personal, corporate and institutional trust accounts involve court documents, state tax returns, leases (farm and real estate), stock powers, stock transfers, wills, financial reports, bills, memos and correspondence. Typically trust documents represent a mix of sizes making them difficult to file and even harder to thumb through and locate when they are needed later. These documents also have varying access requirements, in which case two employees might need the same document at the same time. Most of the time trust documents need to be kept on file permanently, which means a large storage area is required. One executive from a small private bank stated that they are using half of a 50-foot X 10-foot vault for trust document storage. Information stored on paper is hard to sort, search for, and transmit. It is easy to misfile, expensive to copy, and usually located somewhere other than where it is needed. Information stored in physical files is also limited to one user at a time. The Electronic Document Management System edge Electronic Document Management Systems (EDMSs) allow trust departments to scan in images of such items as bonds held in trust at the bank. The actual bonds are then stored in the vault and all subsequent bond registration activities are performed by bank employees using the bond images routed to them by means of automated workflow software. Other trust operations use EDMS and workflow software to automatically store, transmit and route to international markets the documentation that is required for currency, interest rate, commodity and equity swaps. When a trust department in a bank begins utilizing an EDMS, it is initially time-consuming but eventually worth the effort to get everything on-line. Backfile conversion is especially important for applications with long term relationships like trust accounts. It is not efficient to have half the file on microfiche or paper and the other half on the EDMS. One boost to backfile conversion is the ability of microfilm to be scanned into the EDMS. Some EDMS vendors provide a customized link to the legacy system allowing information to be downloaded to the EDMS, making identifying documents for later retrieval much faster. When all documents are scanned, indexed and stored in the EDMS, sophisticated search tools provide for documents to be located quickly and easily. From the bank customer's perspective, the utilization of EDMS offers the advantage of accurate and efficient customer service. Banks are acutely aware of the need to provide customer satisfaction. The customer of today is looking for convenience. The customer wants to do business with the bank that can process their transaction quickly and accurately. Banks employing EDMSs have immediate access to customer information. Multiple users can simultaneously view customer documents and provide the customer with immediate response. Trust departments that utilize EDMSs have found themselves at a distinct advantage over the competition that has yet to automate their transaction processing. Other benefits of EDMS are greater productivity and improved efficiency. With an EDMS, employees spend less time walking around searching for filed documents. They can help many more customers per day when the information is available at their fingertips. The employee no longer has to say, "Mr. Customer, I will call you back after I've located your file." The information is up on the screen in a flash. The utilization of an EDMS creates a single point of information access across the enterprise, resulting in time and money savings. The EDMS solution has become much more sophisticated and is beginning to offer the higher level of security that banks require. Better indexing methods and more robust words in text search tools allow for documents to be located more quickly and easily. The EDMS has also become more affordable, even to small and private banks. EDMSs enable banks to offer the best customer service, keep up with the competition, and boost productivity. Boone County Bank enhances customer service Boone County National Bank, (Columbia, MO) realizes the critical importance of customer service. Boone County National Bank is a $500 million bank and one of the 12 members in the Central Bancompany. The bank was looking for a solution to improve the handling of paper documents in its Financial Management and Trust Services Division. The division maintains documents required for management of trust account and real estate holdings of trust accounts. The trust folders contain 15 categories of trust documents and the real estate folders contain 13 different types of documents. These documents are a mix of sizes; 8.5" x 11", 8.5" x 14", 11" x 17", and odd sizes; they have varying retention periods and access requirements. There is no clear separation of documents, requiring users to thumb through all documents in the folder until the desired one is found. The paper-based filing system uses folder removal cards to indicate that a folder has been removed from a filing cabinet making it inaccessible to other users. Boone's director of quality became interested in the advantages of using imaging to solve the paper document problems. After issuing an RFP, they selected an EDMS solution comprised of a document management system and a COLD COM replacement system. It was installed on their Novell NetWare 3.11 network using an NCR/AT&T Unix system as the database server. The EDMS solution The division users now scan documents into electronic file folders, index them in numerous ways and retrieve them with only a few mouse clicks. Files are stored in a cabinet/folder/tab/document hierarchy. Files can be located by querying the system on any index criteria. There is a quick query function which allows the user to search by multiple fields. Annotations, such as redaction, sticky notes, underlining, etc., can be done on stored documents and printed, E-mailed, or faxed with or without the annotations, with the proper security. To provide accurate storage and flexible retrieval, the system offers an indexing scheme that meets the needs of the users while providing simplified indexing for backfile conversion. The system enables the use of indices that are familiar to the user such as account number, file code and data of document. A customized lookup feature was also created that increases its indexing speed. All active documents are now scanned, indexed and available on-line for simultaneous access by various users. Boone County National Bank now has the flexibility to store documents on either magnetic or optical disc, choosing one for rapid and easy access and the other for long term storage. The system also provides automatic assignment of retention periods by document type, as well as a systematic purge capability. The bank was assisted with backfile conversion by a written plan of action to get all existing documents into their system quickly and easily. It is an unfortunate fact for paper-intensive industries such as banks that many times documents are unavailable due to extensive use throughout various departments. Now that the trust and real estate accounts are scanned into the EDMS, they are available in their entirety to multiple users simultaneously. Also, the information can be retrieved in seconds rather than in the minutes, hours or even days it can take to locate paper documents. Boone County Bank can respond to customer inquiries or internal information requests rapidly and with accurate information. Bank employees can make decisions based on the complete records contained in the EDMS rather than on partial information that can be gathered from various locations within the Bank. Looking ahead This project proved to be an excellent solution for the Financial Management and Trust Services division. It is a dynamic project with the prospect of adding a workflow application, integrating the EDMS with the bank's existing E-mail and implementing the system in other departments both within the bank and within other banks throughout Central Bancompany. Boone's director of quality says, "The system gives us the flexibility to accomplish true information integration without piecing together lots of different products. We expect tremendous added value to the quality of our customer service." Boone County National Bank is well respected in the community for its solid business practices. However, reputation alone will not substitute for efficient operations and bottom-line profitability. Boone County National Bank illustrates a good example of a departmental implementation growing into an enterprisewide installation. The software is installed on an existing network with which the customer was familiar. They began with one department, giving them the opportunity to learn the software system, and are now ready to implement the software in other departments supported by the confidence of their success in the initial installation. Boone County National Bank was awarded the #1 Imaging in Banking Award by ImagingWorld Magazine at the Best Customers & User Awards Ceremony held in conjunction with Imaging Expo'95 in New York. Boone County won this award because it is an imaging and document management user which exemplifies excellence in its application. I. Levy & Associates is devoted to developing and marketing scalable imaging solutions for the client-server environment with an Open Systems strategy. I. Levy & Associates, 1633 Des Peres Road, St. Louis, MO 63131. Phone: 314-822-0810 Fax: 314-822-0309. Web: www.ilevy.com Irving Levy, President of I. Levy & Associates, Inc. has over 30 years of data processing experience. In 1975, Levy formed I. Levy & Associates, a software applications development organization.
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