Encore Bank is working with fintech Compliance Systems to develop electronic treasury agreements that will embed compliance into bank documents.

The $1.1 billion Little Rock, Ark.-based private commercial bank already works with the vendor to embed compliance into its current loan and deposit account opening processes, said Chief Operations Officer Erin Simpson.

“Compliance Systems documents are what’s called ‘dynamic in nature,’ they’re not static,” Simpson told Bank Automation News. “The documents are built so that they have to include the required compliance language, based on the transaction type and based on the state where you’re opening the account or the loan.”

Treasury packages are usually hand-prepared by bank attorneys, but Encore sought an automated solution from the vendor to alleviate the need for this.

“We’re working with them to develop a solution that they can provide to customers, ” Simpson said. “We’re constantly trying to help them figure out … what does the bank need going forward? What do we not have that we could solve a problem with and provide a solution to?”

Encore is also working with the fintech to embed compliance into its online deposit account-opening product. While the bank can currently open accounts in less than three minutes, it needed a compliance solution to quickly generate documents that cover legal rights, times, fees and other personalized documentation — all on a mobile device.

“A lot of systems, you have to wait for an extended period of time for what’s called a document release to come out, where it can take months to get documents updated and to get out to the customers and to the clients,” Simpson told BAN.

Another major challenge, especially on the deposit side, is that any time a law or regulation changed, or when Encore expanded into another state, the bank had to create new compliance documents to reflect the state’s laws.

“It was just a really big, long process to get that done,” Simpson said.

The solution helps automate the otherwise manual process of adding compliance language from the beginning of the document process while it’s still in the loan origination system or deposit account opening system, Compliance System CEO Chris Appie explained.

The cloud-based system integrates with the bank’s system via API. It determines what information is missing and alerts the financial institution’s system to obtain additional information or generate the required language. Compliance Systems retains a team of attorneys to keep up with regulations, Appie said.

“Our system is essentially a rules engine on the highest level,” he told BAN. “Behind the scenes, we get data and we interrogate that data to make sure that it’s compliant, that it’s internally consistent.”

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