Change often comes with a cost. For financial institutions looking to improve their existing loan file management workflows, this cost may involve acquiring software, implementing new processes, or bolstering in-house technical capabilities. On the other hand, there’s a real cost of maintaining the status quo, which could represent a much greater expense in the long run.
Alogent’s document management cost calculator is a free tool for estimating your annual loan file management cost. Download a copy, enter your data, and view the results. You might be surprised by the numbers—especially if your cost exceeds six figures!
Let’s take a look at factors that increase loan file management costs.
Time-Consuming Loan File Administration
Banks and credit unions that rely heavily on paper loan files, checklists, and manual ticklers can get bogged down by administrative tasks, such as:
- Printing and copying documents
- Reviewing paper records prior to filing
- Organizing documents within the correct loan file tabs
- Monitoring and filing new documents as they arrive
- Pulling paper loan files from cabinets
- Running mail merges to generate notices
- Gathering hard copy files in advance of audits and exams
- Returning files after use
- Shredding paper
Some tasks likely happen on a daily basis, while others occur less frequently. For a large financial institution with multiple branches and a growing commercial loan portfolio, inefficient loan file management could represent thousands of hours in administrative effort over the course of a year. If, for example, your typical commercial lender spends 1 hour per week on loan file administration, that’s about 50 hours per year per lender. Multiplied across a team of 20 commercial lenders, and that’s 1,000 fewer hours for customer or member engagement.
Other Expenses to Consider
In addition to reducing productivity, inefficient loan file management could lead to inflated line items in your operating budget. Examples include:
Courier services: Transporting loan files from one branch to another.
Document storage: Securely retaining paper documents in an on-site or off-site location.
Shredding services: Destroying paper documents in alignment with the retention policy.
Printing costs: Ink, toner, paper, maintenance, and equipment depreciation.
Auditor travel: Cost for auditors to travel on-site and perform their work.
Streamlining your loan file management practices may never completely eliminate these costs, but doing so is bound to help. For example, providing auditors with convenient, secure access to electronic loan documentation could reduce their travel expenses and, in some cases, enable faster (and less painful) audits.
How Much Does Loan File Admin Cost?
Access our calculator to estimate your loan file management costs.
Looking for a better path forward? Take a tour of AccuAccount, Alogent’s loan document management software used by 15,000+ bankers. Watch a quick video or request a demo to see how it works.