By Paul Thomas, Provenir

We rely far less on paper in the way we manage our finances today. Fewer bills reach us through the post, instead we monitor the accounts we have with utility providers and others online. Internet banking continues to gain ground; yet for many financial institutions, paper still plays a considerable part in loan applications and assessments. Its ongoing place in these processes has drawbacks for both lenders and borrowers.

Banks encourage customers to take-up electronic forms of money management. Generating and handling paper-based customer communications is a costly, manual exercise. Online banking among UK adults is on the rise; it’s nearly doubled in use since 20071, so many of us now no longer receive hard copy bank statements.

It’s good news in the drive for more efficient, digital ways of working. All businesses, financial institutions included, stand to benefit by phasing out paper-based documentation from core processes. Manual operations add time and cost. These detractors inevitably get passed on to customers. Paper-based processes are also error-prone and hold back the opportunity for the business to innovate and improve its product and service offerings to customers.

For credit and loans, producing paper-based applications and supporting documentation is also a drain on customer resources. Small businesses spend more than three working days pulling together what they need to meet ‘onerous application requirements,’ according to CEB analysis of US Federal Reserve statistics,

Once this paperwork enters the financial institution’s system it may need to pass through multiple departments and be entered onto multiple systems. Information may be re-keyed numerous times; activity that is not only time wasteful but also introduces the potential for errors. Paperwork can be lost. It can also only be handled and processed by one department at a time, limiting the potential for activities to run concurrently.

Manual processes therefore create silos in the workstream and are an obstacle to the fast and efficient sharing of information.


‘World paper free day,’ a global initiative from information management community AIIM encourages businesses to scale back their use of paper. Doing so can reduce operational costs, improve efficiency and open up new opportunities to businesses to extract more value from the data they hold digitally.

Information has changed in today’s digital age. Our access to it is immediate – it is shared widely and quickly; it is succinct, consumed quickly and moved on from rapidly. We used to document, record and file. Now we assume that information is recorded automatically; unseen in the background. On the occasion that it is needed, we expect to be able to access it easily, and pull out just the relevant data we need. So it is with bank statements. We don’t expect to file them manually anymore, but if we need to check an individual transaction we’re confident the record exists, and that we can access it how and when we want.

Customers used to this digital culture of speed and convenience expect a similar customer experience from a credit or loan relationship.


In a competitive market, lenders gain an edge through appealing products and services and excellent customer service. Disruptors entering the lending market don’t have legacy infrastructure, systems and processes to maintain or upgrade. They are able to use the latest that technology can provide to build processes that optimise the customer experience. These processes are online and are digital in the back-office.

For established institutions, a digital transformation can be a far-reaching, challenging exercise. Slick end-to-end loan assessments call for higher levels of automation through the risk decisioning process, and the superceding of manual processes with digital.

Through more automation, less duplication of effort and less reliance on paper, lending institutions can speed up information processing, limit opportunities for manual errors, save costs and pave the way for continuing innovation. By improving the accessibility of information across business functions lenders can aid end-to-end straight through processing, cut down on repeat information requests and reduce the need to re-enter data.

Holding and managing the processing of information digitally also gives lenders a more reliable, searchable record of activities, which is ever-important in a regulated environment.

A reliance on paper-based processes is a major drain on the limited time and budget resources of all businesses, lenders included. In place of outdated technology, patchwork systems and processes that rely on paper, technology can evolve loan origination practices to help meet today’s customer expectations of simplicity, speed and reliability. A digital relationship with customers means investment in technology solutions, not only at the front-end but throughout the end-to-end credit lifecycle.

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