Handling documentation in your digital transformation

Documents and contracts fuel the back-office operations for all banks, and yet, they far too often remain overlooked and left behind when it comes to going digital. Addressing this critical area could be key in bridging the gaps and shortcomings of a bank’s broader digital transformation, allowing it to better derive true ROI from these initiatives.

While banks have large volumes of documents, often spanning decades, the vast majority of it is in an unstructured format, which likely means it is unused beyond the document itself, and difficult and expensive to leverage. In our increasingly digital world, when those documents remain analog, it means the processes that rely on those documents remain manual, which increases both inefficiencies and risk for key business and operational processes.

It also increases costs. On average, banks can spend thousands of dollars to process and unlock data for a mid-complexity document like a basic commercial loan, and the overlay could climb into the six figures for more complex documents, such as a syndicated loan agreement.

Digital documentation can offer competitive advantages in an increasingly crowded market. Structured documentation provides bankers with a better view of their data, which in turn means they can be much better positioned to help their business and commercial customers navigate shifting markets, which means they are much more likely to stand out.

To get to this point, banks must first change how they view their documentation. It is less a component or by-product of their businesses and much more an interconnected data infrastructure – one that is spread across numerous systems, many of which are siloed. The key to leveraging this data is building a true end-to-end infrastructure that can track changes, updates and transactions across the whole institution.

Better digital documentation strategies can help a bank can turn its underutilized, unstructured data into a powerful tool that can not only streamline workflows and let them make faster, better decisions, but also augment other digital transformation strategies. With a data-driven approach, a bank can become more insightful and better able to react quickly – it can onboard faster, build stronger customer relationships and have higher visibility across the organization, which can create more opportunities.

Documentation infrastructure needs to be flexible and scalable – this is especially true for business customers. Documentation should be adaptable to changing needs and environments. It should be able to meet individual client needs while maintaining regulatory and compliance guidelines, which is a real challenge for unstructured data.

Tools like artificial intelligence and low-code/no-code configuration are allowing banks to intelligently automate significant portions of their documentation infrastructure. This means faster, more efficient data processes, while also lowering risk and even expanding revenue potential. Ultimately, this streamlining allows bankers to focus on building relationships rather than chasing documents, which is better for both the bank and the customer.

Digitizing documents into a structured format is the first step, but banks must also be able to fully leverage their data. While it is important to effectively clean up the past, it is also an opportunity to establish new and better protocols for these processes going forward. The goal should be “digitizing at the source,” which means a bank’s documents are structured in real time during drafting and negotiation. This will enable a seamless data flow to and from their systems and the core during the entire documentation process. Digitizing unstructured data at the onset means it is much easier to establish and create a single record of truth.

While banks have gotten better at implementing digital transformation strategies, documentation continues to be neglected. While it may not be feasible for institutions to have all their documents in a single format or home, they should be able to access the valuable data contained in them and use it effectively. By focusing on their documents, banks stand to gain a bigger, better understanding of their data, foster a more collaborative environment, and ultimately gain a more successful future.

Shelby Austin is CEO at Arteria AI, where Abrar Huq is chief revenue officer