Bank Loan Management Today - Bank Imaging Continues Growth

Over the past few years, technological advances in the banking industry have allowed banks to better accommodate customers’ needs and wants.  These new innovations have given many community banks the tools they need to successfully implement such things as on-line banking and branch capture of checks.  While achieving a high level of customer satisfaction should always be a top priority, banks must also focus on streamlining behind the scene operations and reducing risk.  To accomplish these goals, community banks are beginning to invest in and implement bank loan management technologies to increase long-term efficiency.  According to a report ‘Top 10 Banking Trends for 2010’ from the Aite Group, financial institutions are now turning to bank imaging systems to eliminate the manual loan file management systems that banks have relied on for hundreds of years.  Purchasing an effective bank loan management software to image, organize, and store loan documents is an affordable investment that can significantly improve a banks overall workflow.

Before the financial crisis hit the global economy in 2008, many banks had already made the decision to implement bank loan management technologies.  Unfortunately, the economic unrest forced financial institutions to focus internally on cost-cutting which delayed the start of most of these decisions to move forward with bank imaging.  However, in 2011, banks may have an added sense of urgency to shift their focus back on achieving long-term efficiencies with bank loan management.  In fact, a study conducted by financial analysis software company Sageworks, showed that 57.2% of the banks surveyed plan to make more or significantly more commercial loans in 2011 than they did in 2010; 31.4% said they plan to make the same number of loans.  Without proper bank imaging software, an increase in the volume of loans could leave financial institutions with the inability to efficiently manage loan portfolios, track and cure exceptions timely, and appease auditors and examiners by their inability to identify and grade loans.

While the benefits of implementing bank loan management software are unsurpassed, many community banks have yet to make the transition and are still relying on the manual paper based filing systems to manage their loan portfolios.  This lengthy process begins as soon as a consumer or commercial loan is booked.  When the loan is booked, documents are put in a physical paper file folder with 6 to 10 tabs and filed away in a filing cabinet.  When additional documents such as annual insurance/financial updates and collateral or perfection documents arrive, they are processed and the file is pulled from the filing cabinet.  These documents are, hopefully, placed under the coordinating tab within the file and then re-filed back into the filing cabinet.  This cycle continues for the life of the loan.  Bank imaging is alike in the concept and has a similar workflow as the paper based process with a few technological advances.  Bank imaging software creates an electronic “file room” where all documents associated with the loan are scanned and saved on the bank’s server after booking in an electronic “document repository.”  The document repository has the same basic tab structure as that of the paper file, making it easy to organize and scan in new documents. 

Overall, bank loan management software automates the lending process and gives financial institutions a more efficient and long-term solution to increase productivity and reduce risk.  Banks looking to move away from the dated paper based system should seriously consider bank imaging and all it has to offer.

How many banks out there have moved beyond simple check imaging to a completely paperless bank imaging system?  We'd love to hear your feedback and experiences - comment below!