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11:43 AM
Joe Pitzo, Wausau Financial Systems
Joe Pitzo, Wausau Financial Systems

Paperless Treasury Management Helps Ensure Compliance

Financial institutions face even heavier compliance duties to ensure all documents are accounted for and signed.

Constantly changing regulations and FFIEC guidelines continue to alter the way financial institutions manage their deposit and other commercial services. This means financial institutions face even heavier compliance duties to ensure all documents are accounted for and signed. That can prove painful since many still process data manually, a time-intensive chore that triggers errors – from missing documents to inaccurate data. The audit answer: Go paperless in treasury.

Traditionally, treasury management ranks among a financial institution’s most paper-intensive processes. Often, salespeople have to make multiple photocopies or follow an extensive checklist to route paperwork to their implementation teams for ACH, lockbox, remote deposit, wires or other services. This time-consuming process is prone to errors and often employs manual tracking methods to ensure that all services are accurately ready by the delivery date.

But with today’s advanced technology, a bank can easily create its master agreements in the office, eliminating the need to enter the same information multiple times. Documents can be signed electronically using an iPad or a laptop and be sent back to central operations before the salesperson returns to the office. The documents then enter a workflow, guided by specialized software that automatically tracks forms, standardizes processes and makes it virtually impossible to lose track of a document. This assures its policies and procedures adhere to regulatory rules and regulations, thus satisfying auditors.

Specifically, how does a paperless treasury strategy help avoid riling regulators? There are several ways:

-- Capturing the right data at the source

-- Minimizing keying errors through automation

-- Eliminating cumbersome paper trails, filing and scanning

-- Reducing document management issues

-- Decreasing fraud and increases customer privacy and security

-- Thinning the compliance staff since work can be done electronically

Let’s consider these advantages more carefully:

Capturing the right data at the source

Historically, using a manual system, treasury staff must prepare, print and carry the documents they think they’ll need to the customer’s office to close a deal. The chance for errors climbs substantially, which can cause problems during an audit.

Bankers now can handle a new customer’s application and needs on an electronic tablet, such as an iPad, that contains all the paperwork necessary. And, the technology can capture a secure signature that automatically applies to all relevant documents, rather than asking the customer to sign countless papers, which can sometimes lead to a document being left unsigned (or, on the flip, it can track signatures on all documents to make sure they’ve been signed).

Minimizing keying errors through automation

Since paperless processes generate agreements automatically, the system can track changes and ensure that all documents flow through all processes. It indexes documents automatically, with no keying. This reduces errors and expedites document tracking while automating the audit process

Eliminating cumbersome paper trails, filing and scanning

What’s even more helpful, the signed documents can be transmitted from the iPad to the bank’s office for processing. An operation that once took two to four days now can take four hours or less. Gone are the lengthy paper trails, filing and scanning. Digital documentation and the capture of an electronic signature guarantee authenticity and increase compliance with governmental standards and audit processes.

Reducing document management issues

The software identifies and reminds the bank when a document is missing or unsigned. This means that the financial institution won’t miss something required by compliance. In addition, it automatically indexes and archives all documents and puts them in a customer’s electronic folder. This avoids having a situation where, for example, a master agreement goes missing because someone misfiled it. In short, paperless treasury electronically tracks everything and its location all on one clean dashboard.

Decreasing fraud and increases customer privacy and security

All of the automation features shrink the likelihood that fraud can occur since the paperless system keeps track of all documents and ensures all procedures involving them are followed.

This also enhances customer privacy and security because the number of people with access to documentation and information declines sharply as the bank can limit those who can retrieve the electronic content. In addition, there aren’t multiple paper copies floating around the bank that can fall into the wrong hands

Thinning the compliance staff since work can be done electronically

There’s another major advantage as well for bank personnel, auditors and even regulators. Since the information is electronic, personnel don’t have to gather all the files and keep them in a much-used conference room, thus adding to the number of people with access to paper documents. And bank managers don’t have to be disrupted by personnel or auditors dropping by in search of some file or information. That, in itself, reduces errors.

In effect, auditors and regulatory officials can do their sleuthing on their office computers to carry out their compliance work.

Given the advantages of a paperless treasury in today’s age of ever-increasing regulatory oversight and challenging compliance, it begs the question: Why are financial institutions still using manual processes?

Joe Pitzo is vice president of Paperless Enterprise Solutions at WAUSAU Financial Systems.

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