By Marcia Wakeman, Partner

The financial services industry has made great progress in recent years toward eliminating paper-driven processes. Going paperless has opened the door to more efficient operations, lower costs, improved compliance and better knowledge management.

But banks still rely heavily on the physical flow of paper for customer-facing activities. Transporting paper across the enterprise remains a major cost. And the disparate nature of bank operations makes it harder to identify the problems and true costs associated with paper-driven processes.

Continuing to reduce reliance on paper-driven processes remains a priority for banks. But paperless transformation requires more than changing processes and implementing enabling technologies. Capturing the benefits of further paper reductions will challenge banks to think beyond individual initiatives such as check digitization and electronic signatures.

To achieve a greater degree of paperless transformation, banks can take the following additional steps:

Adopt a holistic or enterprise view – A successful approach to paperless transformation ensures all aspects related to operations, transportation, and retention or disposition are addressed. The investment required and the broad reach the solution will have throughout the organization make it important that the effort is driven at the enterprise level.

Align paperless capabilities – Significant transformation requires alignment of paperless capabilities and communities of practice into a unified paperless strategy. This alignment allows banks to leverage their investment in paperless solutions and related expertise.

Understand the true cost of paper – Banks typically allocate costs to either a front-end or back-office function without considering the costs incurred elsewhere in the enterprise. An end-to-end cost-to-serve analysis of critical processes will help reveal the true overall cost of a piece of paper.

Effectively plan and manage the transformation – What are the gaps that must be addressed? How long does it take for a bank moving toward a paperless environment to reach the maximum benefit? Is it a six-month or two-year effort? What are the have-to-haves and nice-to-haves? What is the timeline? All are critical questions that must be addressed along the multiple dimensions of people, process, culture and technology.

Taking an enterprise approach to eliminating paper-driven processes can help banks overcome the challenges and capture the sizable benefits of continued paperless transformation.

What steps are you taking to become a paperless financial institution? Join the discussion.

Marcia Wakeman is a Partner at Capco in the Banking group