By Apryl Motley

Generally speaking, customers don’t like being put on hold or being told that someone will call them back with the information they need. Customers at Westfield Bank, a $1.2 billion-asset community bank in Westfield, Mass., are much less likely to experience one of these scenarios than they were five years ago.

That’s when the bank first purchased a software system to implement its enterprise content management (ECM) strategy to electronically file and manage information and documents in a centralized fashion across the entire financial institution.

Andrew Weibel, Westfield Bank’s assistant vice president of information systems, says one of the primary benefits of using an ECM solution to manage the bank’s documents has been better customer satisfaction because of faster service. “Employees have access to documents on their desktops rather than having to go look for them in a filing cabinet,” he explains. “They can service the customer immediately rather than placing them on hold or calling them back.”

The term “enterprise content management” refers both to the strategy used to categorize all types of enterprise content and documents as well as the software products used for managing documents as they are processed throughout the bank. “ECM is more than imaging,” explains Michelle Shapiro, industry manager for financial services for OnBase ECM system provider Hyland Software in Westlake, Ohio. “It is imaging documents necessary to everyday business and doing more with them by automating and improving processes throughout the bank.”

During the recent recession, many IT budgets were reduced drastically, but according to Gartner Inc., an information technology research and advisory company, ECM spending grew by 7.6 percent in 2010 and is projected to experience growth over the next three years.

Gartner’s analysis also indicates that the primary reason organizations have invested in ECM in a down economy is productivity—namely, that ECM can help “drive process efficiency, improve data and process quality, and build better channels to your customers and prospects.”

Certainly, these are among the business goals that community banks hope to achieve by implementing ECM, along with reducing costs, managing compliance and delivering more competitive lending. But here’s a look at some of the other factors your community bank should consider as it evaluates the feasibility and benefits of implementing enterprise management strategies and technologies.

Finding files faster

Five years ago Westfield Bank wasn’t even in the market for imaging technology per se, let alone ECM. Initially, the community bank had started looking into a new electronic archiving system to replace the very old one that was only archiving reports. Weibel learned about document-scanning capabilities of today’s newer document management systems, which became the starting point for the bank’s more comprehensive ECM strategy.

“Once we started scanning documents, we decided that it made sense to put the most requested documents into the system that we were always pulling from [paper] files, such as signature cards,” Weibel recalls. “Then we began working on a process for getting the documents into the system more efficiently. After we did that, we added all of our deposit documents to the system as well.”

From there, other departments at Westfield Bank, including human resources, accounting and lending, adopted the process. “While access to files is segmented by department, with this system in place, staff could look up information on their own as needed,” Weibel adds.

He acknowledges that it was critical to “set up a process for indexing and filing information appropriately.” For example, with the exception of those in human resources and accounting, the bank’s staff uses a filling process using key words like “account number” or “social security number.”

“We try to make it as simple as possible,” Weibel says. “For most accounts, it will be PIN and name.”

Further, Westfield Bank has quality-control processes in place to make sure the data that goes into the system is good. One example would second reviews of data that has been input.

With document scanning and indexing in place, Weibel began instituting another component of ECM for the bank: workflow. Its primary use is document routing. “If I have a document that needs to be reviewed and signed by someone before archiving it, I don’t have to send it via interoffice mail,” Weibel explains. “The system electronically routes documents to the appropriate personnel as needed.”

“We have reduced courier costs and shortened the wait time for review of documents,” he continues. “You don’t have to wait a day for a document to get from a branch to the main office, and things don’t get lost.”

Leveraging systems

Establishing workflows for compliance has also created efficiencies for Westfield Bank. According to Weibel, “It has really helped with compliance. We know that reports are being reviewed and forms won’t get lost. “We’ve got a better sense of security knowing that work flows are in place,” he continues. “All the required information must be in the system before anything can be processed.”

Because of the adaptability of these systems, vendors say ECM systems can help community banks manage compliance with new regulations. For instance, numerous institutions are using ECM to manage document retention requirements by setting up time limits for purging documents. Some banks have set up their systems so that examiners can retrieve relevant documents remotely, and some banks even allow regulators access to documents through their ECM systems during exams. These steps can save the banks considerable money and staff time that would be spent preparing materials.

“Adopting ECM creates an environment where you can easily call up all of the documents that regulators want to see,” says Jeffrey Green, a director with Laserfiche, an ECM systems provider in Long Beach, Calif.

Maintaining updated policies and procedures is another example of how centralizing their content through ECM can helps bank with compliance. “ECM makes it easier to produce the most current policies and procedures that have been communicated to bank employees, and to demonstrate that employees have actually reviewed them,” Green notes. “Regulators aren’t satisfied with a bank saying that it adheres to a regulation or policy. They want to see documentation and proof of compliance.”

Originating and reviewing loan applications can be a lengthy process, especially if a bank doesn’t have an automated system for ensuring that all necessary documents have been submitted and reviewed. “The faster community banks can make a decision and fund a loan, the better,” Shapiro says. “Electronic distribution of loan applications from origination to funding speeds up that time.”

Shapiro says ECM systems particularly excel at tracking and managing missing loan documents to keep loan packages complete and accurate. When implementing ECM, Green agrees that it is beneficial “to start in the loan department because it has the highest ROI and benefits most from centralizing content.”

Green offers the following loan origination scenario to illustrate some additional benefits of ECM for banks: Traditionally, an application for a commercial loan is made at a bank’s branch and then sent by courier or overnight mail to the home office where all loan decisions are made. The loan application is reviewed, and additional documents are requested. Then, the home office awaits arrival of those documents before a decision can be made.

“With ECM, the loan application starts electronically and is imported into the ECM system at the branch,” Green explains. “The branch and the home office can review it at the same time and collaborate on it, decreasing turnaround time. In this way ECM eliminates the costs of creating and distributing loan files as well as the difficulty of communicating about loans.”

Economizing ECM

While ECM offers the potential of increasing efficiency and reducing costs, you’re likely asking yourself, “How affordable is it?”

As often is the case with technology and software systems, the answer is it depends, vendors report. ECM vendors say they can adapt pricing according to an institution’s needs and budgets. Often banks will phase-in ECM systems depending on their needs and budgets.

According to Westfield’s Weibel, the solution was in fact affordable because Westfield Bank could purchase additional modules as needed: “We started with two or three modules, and at this point, we have 15 to 20. We decided to begin with archiving and basic document imaging. Then, we worked on indexing and workflow,” he continues. “You can start small and expand the system as needed.”

Westfield Bank continues to take a measured approached to implementing ECM while expanding its definition of content. “Our plan is to keep expanding workflow, and content is really anything,” Weibel says. “We store voicemails, photographs of properties and faxes of wires.” Next the bank is considering e-sign (electronic signature) pads, which would extend ECM to customers by having them sign documents directly.

While the bank is well on its way in implementing ECM, Weibel acknowledges that initially “the sheer magnitude of the project was overwhelming. We had to work department by department and approach the process in smaller pieces. It’s worth it, but don’t expect to accomplish this in six months.”

Apryl Motely is an ICBA Independent Banker contributing editor.