You know going paperless can reduce your carbon footprint and help the environment. And you know that maintaining electronic records has been fully compliant with regulations for years now. But there are some unexpected pluses to reducing your bank’s reliance on paper, beyond the benefit to the environment. Here are three hidden benefits to going paperless:
- You’ll save money – a lot more than you may realize. According to a report by Deloitte, going paperless can cut operating costs at financial services firms by as much as 25%. The cost of records management specifically can be reduced by 60 or 70%. The potential benefit to your bottom line is huge.
- You’ll make your records easier to work with. If your records are electronic, you can process them much more easily. That means you can conduct data analysis that will give you greater insight into your customer base and the performance of your loan portfolio. Unlocking the potential of big data starts with going paperless. (For more info, see our previous post Can Big Data Make Small Business Lending Profitable?)
- You’ll make your customers happy. Paper forms take a long time to fill out, and customers may end up filling out multiple sets of forms over the course of their relationship with you. Customers hate this. According to Deloitte, more than 97% of customers say they don’t want to wait in line more than 10 minutes when they visit a bank branch, and they only want to have to provide their ID information once. Banks simply are not meeting these needs. A quarter of all customers said they waited more than 20 minutes before being helped by customer service, and half of all customers said that they’d had to give ID information to their bank again in the past year.
Making your small business lending program paperless can change all of that. Moving your lending application online accelerates and streamlines the lending process, giving you clearer visibility into your loan performance, and improving the customer experience.
Consider the example of Excelsior Growth Fund, who moved its small business lending online with Mirador just over a year ago and recognized all these benefits.
Alternative lenders can approve small business loans in minutes and get cash to borrowers in just a couple of days. By moving their application process online and automating the early stages of the process, EGF was able to match alternative lenders for speed and convenience, streamlining the experience for their customers.
EGF also saved money: they reduced their loan origination costs by 25 to 50%. Their loan processing became much more efficient, particularly for loans that were ultimately rejected. Loan officers used to spend a third or more of their time on loans that ended up getting declined. Now, thanks to automated online processing, they spend almost no time on loans that go nowhere.
Borrowers also saw considerable benefits. By refinancing loans they’d gotten from alternative lenders, borrowers saved an average of $6,800 a month. Plus, they got their funding much faster.
Going paperless offers surprisingly big benefits for your bottom line–and your customers’. For banks, it can save you money, give your customers the efficiency they want, and open up new opportunities to analyze your loan portfolio. And the environmental benefits, of course, are enormous. Why not start the process today?