Paper or digital? A [rhetorical] question for the new age

By Jessica Kleinman posted 10-24-2013 10:24


This is a guest post by

“Paper or plastic?” used to be the expected question at the supermarket checkout counter. In many business settings, the question becomes “Paper or digital?” and with the proliferation of mobile devices, advances in technology, and customer expectations, the answer becomes fairly obvious. However, as other industries are embracing the notion of becoming paperless, financial service organizations tend to trail the pack.

As a society, our reliance on paper – or preference, if you will – has diminished considerably in recent years. Bills, invoices, and statements are now being delivered electronically, which may have contributed to the US Postal Service re-considering Saturday deliveries and continuously increase costs in order to offset shrinking volumes (marketers switching from paper flyers to electronic ones – cheaper to deliver – are also contributing to that effect, which amounted to a $740 million loss in the recent quarter).

Borders (the bookseller) is gone while Barnes & Noble is seriously struggling, since many prefer the latest novels in digital format (also cheaper to deliver). An eye-opening statistic: eBooks have grown 45% since 2011 and now account for 20% of the trade market. In that vein, San Antonio just opened the nation’s first Digital Public Library; undoubtedly, many will follow…

Newspapers and magazines are hanging by a thread, with news already “stale” by the time it hits the stands. In 2009, only 51% of the top 25 newspapers in the U.S. claimed a mobile presence; today that number is nearing 100%. Even the smallest pieces of paper, like insurance cards (Progressive offers digital insurance cards) are being converted to bits and bytes. There are hardly any industries where the shift from paper to digital isn’t felt on a large scale! Even the once-mighty Kodak has fallen victim to the digital renaissance…

Looking through a very realistic crystal ball, in a few short years even things like a driver’s license or a passport (complete with sophisticated digital authentication certificates) could go that route. The shift is obvious and the examples are amply abundant in everyday life.

On a humorous note, check out this French commercial. Perhaps the only paper products that have a viable future are facial tissue and toilet paper. All jokes aside, the shift to digital is real, the benefits tremendous and the applications endless. The world’s forests could also breathe a collective sigh of relief.

Thursday, October 24th, is the 4th annual World Paper Free Day, an initiative driven by AIIM (The Association for Information and Image Management), which aims to educate on how removing paper from the workplace can deliver significant benefits, on how moving to digital can improve processes, and besides the environmental impact, how it can positively impact the bottom line as well. While this may sound like a relatively obscure event, consider how far Earth Day has come since 1970!

According to last year’s AIIM publication (and countless other research papers on the topic) the benefits are staggering:

  • 30% to 50% process improvement/productivity gains
  • 3 to 10 times improvement in turnaround times
  • Virtual elimination of “lost” documents (today that figure is north of 10%)
  • Vastly improved customer experience

Yet despite all the benefits, most organizations – and especially financial services – are finding it difficult to implement successful paperless transformations. Sure there are attempts, some even successful, but by and large most are just beginning the journey (see figure 1 below):

In 2009, Wells Fargo rolled out a paperless ATM process. Just last month they passed the billion mark on paperless transactions (with almost half the customers opting out of a paper transaction record). As an industry, however – despite recent progress – the electronic statement adoption still hovers around 40%.

A recent FIS study across mid-tier banks shows that paperless adoptions are becoming more predominant, driven primarily by productivity (improved process throughput), customer experience (speed of information access), and knowledge management (improved ability to search/share content). Yet, many institutions are struggling to define and execute a solid comprehensive paperless strategy.

Figure 1. Stages of Paperless Transformation

As you can see, the journey is complex, the individual components difficult to address at an enterprise level, but the benefits can be tremendous. Capco has addressed this topic previously in our Paperless Transformation white paper and has been helping clients with everything from developing the strategic roadmap to implementing customized tactical solutions. We feel there are tremendous opportunities in this space and the momentum – driven largely by customer demand and the need to improve efficiencies – is gaining magnitude.

So in observance of this (still relatively insignificant) event, are you planning to “go paperless” just for one day? Are you scheduling a workshop to brainstorm ideas to eliminate paper? And more importantly, are you developing an actionable roadmap on a larger scale to move your organization in the right direction? Or will you be the next Borders or Kodak?

Please share your perspective, or success stories with paperless efforts, and join the discussion.

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