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Paperless Treasury: A Budget Trifecta Winner

"Want to be our customer? Please fill out this form in triplicate."

If you ask your corporate customers, they may say that the last innovation to speed the execution of services contracts was the use of three-part carbon-copy forms. While innovations are radically improving the customer experience in retail banking and lending, why is it that the ease of purchasing corporate treasury services lags all other everyday purchases of contracted services?

Corporations are desperate for a faster, easier, pain-free onboarding process when they agree to give a bank their business. Case in point: Treasury Strategies Inc. released a survey last fall that confirmed:

  • Nearly half of the survey respondents deem a lengthy implementation process as a top pain point.
  • More than two-thirds of the surveyed corporations would leave their current bank for one with a better onboarding process.

We live in a world where customers -- you and I -- have what seems to be endless options. So while you’re working so hard to improve and innovate your bank’s services and offerings, why do so many banks let the onboarding process slip?

After all, when you give someone your business, aren’t you eager to get started?

Paperless Treasury Onboarding

[Click here to view the full-sized infographic, courtesy of Wausau Financial Systems.]

Is there a lack of a business case?
The Treasury Strategies Inc. survey found that through an electronic onboarding process banks can enhance their compliance, improve expense control, and advance new revenue generation.

Right now, most banks are in the midst of their annual budget cycles. Investment dollars are scarce. Compliance mandates are consuming a good chunk of the budget. Prioritization is a premium. Competing demands are all at play in the evaluation of each investment request. Paperless treasury onboarding is one of the few investment opportunities that hits the trifecta of all of the investment criteria used in budget selection: compliance, expense control, and new revenue generation.

Paperless onboarding solutions typically encompass opening and closing bank accounts, maintaining bank accounts such as changing account signatories or spending limits, and generating reports as required by law or regulation.

Here’s a quick glimpse of how it works:

  1. Sales rep walks client through electronic forms on a tablet that require sign-off in order to get new treasury services up and running quickly. (Note: All forms are available to the sales rep, 24/7 -- no more lugging around stacks of paper.)
  2. Signed forms are submitted wirelessly via the iPad while still at the client’s office. Immediately, time is saved. You no longer have to wait for the sales rep to head back to the office -- whether it’s across town or across the country -- to begin implementation.
  3. Electronic workflow route forms to all specified departments within the bank that should receive them, providing alerts on incomplete forms, which can be quickly addressed via the paperless solution. The solution dashboard allows implementation to have visibility into the status and progress of each area, identifying any bottlenecks that might delay their go-live dates.

This space is not new. Electronic bank account management (EBAM) is a feature set that has been available for some time between banks and their largest corporate customers, but banks aren’t fully capitalizing on the opportunity at hand and ease of use that new mobile technology provides. And they’re missing out on a lot.

What’s to gain?

Accelerated new revenue generation: 90 percent of survey participants said they believe they can accelerate revenue by reducing implementation time. Thanks to electronic onboarding, various mundane tasks can now be eliminated, allowing sales personnel to focus more on improving the customer experience and generating revenue and less on trying to track the process of implementation.

Improved expense control: Electronic onboarding is an innovative solution that improves customer onboarding and order initiation, taking four hours or less to complete the tasks for which today’s paper-reliant methods require two to four days to finish. By going paperless, the implementation process as a whole can lessen time by at least 35 percent, helping to create a reduction in corporate costs.

[For more from Wausau's Lawrence Buttner, check out: ISO 20022: If It’s Not Broke, Fix It?]

Enhanced Compliance: With compliance requirements dominating banks’ investment lists, electronic onboarding offers banks the opportunity to double down their investment and appease both regulators and customers. It provides transparency to the onboarding process and ensures completeness of required data, and, because of the encryption of electronic signatures, it ensures document security. Electronic onboarding also promotes accountability, by providing detailed auditable history to monitor security and associate performance, and drastically reduces the amount of paper-based customer information “in transit,” which helps to improve corporate compliance, too. (In fact, with paperless treasury, banks can reduce audit and validation efforts by nearly 80 percent!)

Washington Trust, a $4 billion-asset financial institution with 40 branches and more than 750 employees and officers, migrated to a paperless treasury solution in 2012. Since then, the bank has achieved the following results:

  • 15 percent reduction in the time staff spends on-boarding clients
  • 40 percent faster on-boarding turnaround
  • Immediate document availability
  • Automated routing of treasury agreements and setup forms
  • Elimination of interoffice mail and faxing for Treasury documents

Paperless on-boarding is a classic case of a win-win situation. The bank saves time, money, and resources, and the customer has a better experience.

This sure looks like one area where banks should double-down their efforts!

[Join the Women in Technology Panel & Luncheon at Interop on Wednesday, October 1. How different are IT career paths and opportunities for men and women in 2014? Join your peers for an open forum discussing how to advance in an IT organization, keep your skills sharp, and build a mentoring network.]

Lawrence F. Buettner is a senior vice president at Wausau Financial Systems, which provides receivables technology for financial institutions. He has 30 years of experience in financial treasury management and was a senior vice president at First Chicago. View Full Bio

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Byurcan
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Byurcan,
User Rank: Author
9/23/2014 | 10:07:50 AM
Re: Compliance
Yes, treasuty services can be a very paper-intensive aspect of banking, so I too would expect tos ee this trend continue.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
9/22/2014 | 4:53:08 PM
Re: Compliance
Yes in terms of compliance and risk, any function that is still mainly paper-based is becoming a problem just due to the man hours that have to be spent tracking down documents when an audit occurs. So I expect that trend to grow in just about every area of banking. But considering the importance of many of these treasury client relationships, that customer experience part is just as important.
Larry_Buettner
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Larry_Buettner,
User Rank: Apprentice
9/22/2014 | 12:41:42 PM
Re: Compliance
The treasury services on-boarding process has definitely lagged the consumer experience. The first objective of a treasury services digital on-boarding initiative is to create an experience that allows for digital capture of diverse product requirements and then provide complete visibility to the remainder of the on-boarding process. Simply knowing the status of the implementation and being able electronically track and prove all "I"s are dotted and the "t"s are crossed is a major step in the right direction. Allowing that visibility and flexibility on mobile devices really takes it to the next level.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
9/18/2014 | 2:36:11 PM
Compliance
Thanks for the great article Larry. I'm finding that there's a lot of focus on customer onboarding across different lines of business driven by the cost of KYC compliance. But while there's been a lot of innovation on consumer and small business onboarding, treasury seems to be lagging behind. The integration of mobile technology for a paperless workflow seems like it will bring that kind of innovation over to this very important customer segment.
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