From back office to front office: how the enhancement of an existing document capture solution helps banks to increase efficiency

Banks and other financial institutions have to deal with an ever increasing amount of incoming documents. Most of them already responded to this paper avalanche by deploying a number of backoffice document capture systems, usually at a central office or remote document processing facility. Meanwhile, looking to reduce their own paper backlogs, the local branches of these same financial institutions have made separate investments in document capture.

The benefits brought by document capture process automation are numerous. Business processes are more efficient in an electronic data environment. Customer accounts are opened faster; loans are approved more quickly; transactions are handled more accurately, and information can more easily be shared across departments. In the high-volume document processes of financial institutions, these efficiencies translate to substantial cost savings. Manual processing is not only fraught with inefficiencies and errors, it is also expensive. By automating the repetitive tasks of document handling, data entry and validation, staff can be reduced or reassigned to higher-value tasks.

Branch offices have installed office productivity tools such as multifunction peripherals, desktop scanners, and fax systems. However, there is a misconception that these tools are solely for office tasks such as copying and document sharing, and not an integrated part of a solution to automate document-driven processes. Likewise, the back-office operations processing loan documents, credit applications, investment documents and account forms, have in place their own high-speed scanners, enterprise capture software and data repositories. Similarly, there is a misconception that these tools are solely for records management and archiving, and not an integrated part of business process automation. Capable of processing millions of pages of paper, these systems automate such labor-intensive functions as mail opening, check sorting, and forms processing. Information from structured documents is extracted using sophisticated character recognition and document identification applications.

Because large-scale, back-office capture systems were originally most effective in extracting highly-structured form data, their use was limited to very high-volume repetitive documents. Over time, the software has been used for increasingly more complex document processing, but almost always large-volume, structured forms. This evolution has led to a disconnect between the customer-facing, front-office processes where many transactions originate, and the backoffice document-capture system, which feeds the data repositories.

While the elimination of paper storage is a tangible advantage to document capture systems, the fact remains that archiving is just a small part of the potential benefit these tools can bring. Viewing capture solely as an electronic file cabinet overlooks the gains brought by automating transactions from the start.

Transactions Begin at the Branch – So Too Should Capture
For most financial institutions, a transaction begins at the branch, not in the back office. With the pervasiveness of ATMs for cash, and Internet banking for routine account transactions, the branch office is increasingly used to conduct more complicated transactions. Walk-in customers are just as likely to be opening an account, seeking lines of credit, or securing a home mortgage as they are to be cashing a check. In this environment, when a customer walks up to a loan officer or credit specialist and inquires about a loan, they expect immediate action. By exploiting the document capture system already in place, there is an opportunity to immediately automate these transactions.

For mortgage loan applications for example, financial institutions face some of the most difficult and expensive document processes. With multiple branches where loan papers may originate in countless different forms and legally mandated documents, this is an increasing challenging segment – and it’s also an area with the greatest benefit from an integrated branch-office / back-office capture process.

A mortgage workflow based upon the immediate capture of transactional documents significantly shortens the time needed to make a decision. For credit applications, documents can be sent to central offices where a single loan officer might govern over a number of branches. Any missing documents can be immediately forwarded to complete a transaction. Business customers enjoy faster approval of line-of-credit requests, mortgage applicants receive faster access to funds.

Enhanced Document Capture to Automate Banking Processes
Capturing documents that originate in the branch and then quickly routing them to the back office can greatly enhance productivity. But whether the documents arrive electronically or in a paper-based format the information that these documents contain is what is driving critical business processes. The information from these documents allow financial institutions to enroll new customers, take deposits, and generate revenue. Without this information an institution cannot assess a customer’s risk or their credit worthiness. And information from these documents is often necessary in the event of a regulatory audit.

Yet many financial institutions are still relying on manual methods to identify different document types and extract data from them. Or when they are ready to process or archive the documents with a capture system they are manually sorting and separating documents. This, of course, becomes an expensive proposition due to the labor required to complete these tasks. In fact, analysts have estimated that the cost to process a single mortgage loan, for example, adds up to $877. Further increasing costs are errors and exceptions that are inevitable with manual processing.

A typical loan folder can contain between 200 – 300 pages with a wide variety of document types. Each of these document types have to be classified and information needs to be taken from these documents to drive the mortgage loan process. Finally, when the document is ready to be archived or imaged someone will likely sort through the loan file and manually separate the different document types by inserting separator sheets.

Fortunately this process can be improved. An automated processing system leveraging new and existing document capture technology can convert mortgage documents to images (or even better receive them from the branch as images), automatically identify and separate the different document types, extract the critical data from the documents, and then deliver the data and images to the systems that drive the rest of the process.

Kofax Offers the Tools to Extend and Enhance Document Capture
Recent advances in document capture, optical character recognition, document identification and content analysis have enabled many tasks to be automated. For financial institutions in particular, these tasks might include the separation of individual documents prior to scanning, or the sorting and routing of new account forms or credit requests from batches of incoming mail.

Enterprise capture applications such as Kofax Capture offer the flexibility to accept scanned images from front-office business processes. Conversely, the work productivity tools such as workgroup and desktop scanners, MFPs and fax machines, are already familiar tools to the front-office staff. By combining the forces of these technologies, exponential benefits can be realized.

As opposed to many back-office capture processes, which rely on the consolidation of documents in a central location, a distributed batch-capture model moves the imaging of documents to their point of entry. This offers a number of advantages. Paper forms more readily mix with their electronic counterparts. By extending the front office to the back office, multiple parties can be working on the same transaction, without having to wait for a response when making business-critical decisions.

Kofax offers several solutions that enable existing branch-office tools to integrate with back-office processes. These solutions enable customer-facing employees to trigger back-office business processes directly from familiar front-office equipment. With a Kofax solution and a front-office capture device at the branch, customer advisors opening an account or loan officers assisting in a loan application can submit documents into a back-office application managing documents at a central office.

Because employees use their familiar business applications, they can start processes with a few clicks at their familiar device. This minimizes the need for training. For the customer, the increased responsiveness and front-office contact combine to produce superior service. For the bank, the result is an overall reduction in operational costs.

For branch offices with higher document volumes that could potentially overwhelm shared equipment or users, Kofax offers a high-volume, branch-oriented solution that captures documents and data from multiple branch offices and transfers them directly into a central Kofax Capture installation through a financial institution’s network or over the Internet. Kofax Capture can then process these documents thereby routing them to the proper approval workflows, or into content repositories. This mature technology is a proven, reliable method for accelerating remote business processes and reducing costs.

As the front-office employees are working directly with customers in branch locations, a series of back-office processing steps can occur remotely – and simultaneously. By using advanced document transformation technology from Kofax, business documents are automatically transformed into structured electronic information and the process of document classification and data extraction is further automated. Kofax’s advanced capture and transformation technology can process forms, trailing documents, correspondence and any other document type on a single platform.

Offering tremendous flexibility, advanced capture and transformation technology from Kofax also integrates seamlessly with existing applications such as Kofax Capture, giving access to the widest range of document scanners and back-end archiving and content management solutions.

When combined, this collection of information capture and processing modules enable front-office employees in bank branches to easily capture information and automatically process documents when they reach the back office. By eliminating much of the manual handling required to process forms and the many documents needed to open a new account or originate a loan, a comprehensive solution from Kofax decreases the cost, time and effort required to complete key banking processes.

More information and customer case studies on www.kofax.com.