The efficiency of any operations department within financial services depends on workflow, especially when working remotely during the coronavirus crisis, and ultimately, efficiency is a key indicator of bottom-line profits.
To streamline work processes and improve workflow, a business must have an overall assessment of operations. Financial institutions must evaluate office paper use, including the usage, processing and archiving of forms. The financial services industry must look for areas of improvement that move towards digitising manual processes and eliminating physical paperwork from order forms, onboarding documents and agreements.
DeeDee Kato, vice president of corporate marketing at Foxit Software tells FinTech Futures about what banks can do to ease the process of digitising paperwork during the coronavirus crisis and the challenges faced with remote working. From scanning documents, using optical character recognition (OCR) to make it text scannable and searchable, to the issues people face when relying on paper located in the office.
“The number one thing that’s the most important factor for our banking customers is customer service, as there are many things to think about when going digital, especially during the pandemic since there’s a whole uptick in online activities,” says Kato.
Statista’s July 2020 online activity report shows that “almost 4.57 billion people were active internet users as of July 2020, encompassing 59% of the global population”. With such high internet usage comes the need for banks to ensure they can support external parties and internal teams whilst working remotely. “That’s where streamlining workflows with robotic process automation (RPA) and machine learning can improve productivity,” adds Kato.
Gloria Sánchez, group head of legal for technology and legal transformation at Banco Santander, highlights the need to digitise cumbersome paperwork in a legal setting amid COVID-19. “The legal department tends to be quite traditional,” says Sánchez, “the pandemic sped up the need to digitise, although we were already in the process of being fully digital before COVID-19, there is still a lot of work to do within the implementation processes.”
Sánchez tells FinTech Futures about the importance of improving processes when providing information to regulators. “You may have the information in many documents and many repositories when applying data structure techniques, so you need OCR.” This creates a bottleneck as compliance teams must search across departments and verticals in the group to obtain the relevant information for the regulator, an often time-consuming process.
Kato mentions that Foxit’s OCR capability solves the problem of static images to making them text scannable, especially when handling multi-page documents converted to text files. A customer can use keyword searches to find critical information and copy and paste values into the regulator’s system.
“Regulators often receive these document requirements as paper documents and they mention how they need to make comments and remarks on them and send them to another party, who also had to make a paper copy, which is quite cumbersome,” notes Kato, “but now they scan it and apply OCR so it can contain legitimate texts which can now be edited and annotated.”
Some of the areas for both Kato’s clients and Sánchez’ teams that have moved towards digitising their processes are know your customer (KYC) management, converting mortgages and loans documentation, forms processing, compliance and security, signatures, archiving and retention and mobile apps/online banking.
“Our goal is to enable our customers to go fully paperless in each of these areas to significantly reduce operational costs associated with paper and manual processes,” says Kato.
During the KYC process, banks receive a multitude of files and documents from different clients. These entail identification documents, proof of income, proof of residence and more. The issue arises when the documents arrive in various formats such as scanned images, skewed scans, photo images, they all need to be standardised to be easily searchable and retrievable.
“Whilst the goal for banks and credit unions is customer convenience, it’s not usually the case the other way around. Customers can send it through a scan or take a picture of it and send it that way, scanned images, large text files, which are less than ideal,” notes Kato. An influx of these more static files only increases the KYC or regulatory review process as the documents require remediation before use.
“By converting the documents to PDFs or make use of digital portfolios with PhantomPDF, you can reprocess the documents and keep the original file,” adds Kato. This makes collecting and retrieving client information a lot easier for employees working on KYC procedures. For badly scanned images or file types that are way too large, PhantomPDF can automatically re-adjust the image, compress, and convert it to PDF while maintaining the original integrity of the document.
“Firms need to re-think and overcome the challenge of heavy paperwork and manual processes, so they need to meet the customer where they live,” says Lil Roberts, CEO at Xendoo. “They live in text messaging, mobile, live chats on website, emails and phone calls. But what the problem has been in the US is that practitioners don’t value the customer service side of the business and taking care of small business owners in a timely manner; customers need and want swiftness.”
Banks are incredibly reliant on physical documentation when reviewing complex cases like mortgages and home refinancing. Prospective clients submit a lot of documentation such as mortgage payments, tax returns, statement of assets, identification and more.
“We’re talking about customer documentation that needs to be deeply reviewed as part of the KYC procedure and in the situation we’re in with fluctuating rates, income loss caused by the coronavirus crisis combined with customers preferring to minimise branch visits, we foresee challenges in managing an influx of documentation which never comes in neatly organised or in standardised format and the process can be dragged out,” says Kato. “We’re the solution to this problem.”
Foxit’s PDF technology enables banks to not only transition from paper to paperless but also gives them the ability to work with digital documents like they would with paper.
Visit Foxit Software for more information on PDFs.
Here’s how Nasdaq-listed MicroStrategy went about buying $175m in Bitcoin
MicroStrategy has become the poster child of mainstream Bitcoin adoption amongst corporations. It is the only publicly listed company to turn towards BTC as a reserve asset to store their capital in.
Their announcement last month regarding their decision to ditch the US Dollar in favor of BTC to store their capital was a big one, because it showed that the benchmark digital asset is gaining utility as a store of value.
For a company with hundreds of millions of dollars in cash, the decision makes sense, as the crypto’s scarcity allows them to avoid the massive losses that would otherwise be incurred due to inflation.
Acquiring this much BTC without going through over the counter (OTC) venues is no easy task, however, and the company’s CEO explained in a recent tweet how they went about doing this.
MicroStrategy now holds 38,250 Bitcoin
Earlier this week, Microstrategy CEO Michael Saylor announced that his company had doubled down on their Bitcoin bet, adding $175m worth of the digital asset to their holdings.
This massive purchase came about just weeks after the company had revealed its plans to switch to an alternative Bitcoin-focused financial strategy. They now intend to hold their entire capital reserves in BTC to avoid inflation and devaluation of the US Dollar, which is being printed at unprecedented rates.
This strategy is unprecedented and was kicked off by the purchase of a whopping $250m worth of the digital asset.
The company revealed on September 15th that they were buying even more BTC, conducting a $175 million purchase via the spot retail markets. This may have caused Bitcoin’s price to rally to $10,900 while the rest of the market trended lower.
Their total holdings now stack up to 38,250 Bitcoin, with an aggregated purchase price of $425 million.
Here’s how MicroStrategy market-bought 16,796 BTC
During their latest bout of purchasing, MicroStrategy used the retail market to acquire their crypto, with the company’s CEO explaining that they purchased 16,796 BTC throughout 74 hours of continuous trading.
“To acquire 16,796 BTC (disclosed 9/14/20), we traded continuously 74 hours, executing 88,617 trades ~0.19 BTC each 3 seconds. ~$39,414 in BTC per minute, but at all times we were ready to purchase $30-50 million in a few seconds if we got lucky with a 1-2% downward spike.”
The massive amount of capital that was introduced into the market as a result of these 74 hours of continuous trading likely had lasting impacts that may still be influencing Bitcoin.
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EU to see comprehensive crypto regulation by 2024
The European Union, or EU, plans to incorporate crypto and blockchain technology into its main processes by 2024.
Over the next four years, the economic union aims to firm up fresh regulations that will promote blockchain and digital asset usage for international money transfers, according to internal documents that Reuters reported on Friday.
The documents detailed:
“By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector […] It should also address the risks associated with these technologies.”
Finding that almost 80% of its population transacts in paper money, the European Commission, the union’s governing entity, wants to see digital payments become more common, while aiming for immediate transaction times, Reuters explained.
The commission’s reported aims include a desire for increased data access, financial activities availability — all while aiming for increased efficiency. “By 2024, the principle of passporting and a one-stop shop licensing should apply in all areas which hold strong potential for digital finance,” the documents noted. Over the next year, fast transaction avenues will likely take over, Reuters added.
Although the COVID-19 pandemic may have expedited the desire for digital payments across the globe, blockchain and crypto assets have been the talk of the regulatory town, with many countries looking toward central bank digital currencies to streamline their payments infrastructures.
UPDATE Sept. 18, 21:00 UTC: This article has been updated.
Good business: Eco-friendly credit cards on the horizon
Share The plastic credit card consumers keep in their wallets may soon change. With more consumers demanding eco-friendly business practices, issuing banks could benefit from using more sustainable card materials, according to Aite Group’s report, “Eco-Friendly Card Material: Bringing Sustainability to Card Issuance.” “Not only is there approximately 150 million metric tons of plastic in …Read More
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