Silos: Great for Farming; Bad for Compliance Officers?
How Image System Integration Aids Compliance
Traveling through most parts of the country, we’ve all seen those tall, cylindrical structures. Silos–there’s never one by itself; they always seem to be in groups. Thirty years ago, in banking technology, account-servicing systems were often referred to as ‘information silos’. Each separate silo had a group of information; perhaps mortgage loan information in one, consumer loan in another and so forth.
So, what happened to the ‘information silos’ of thirty years ago? Core system providers have done a great job giving their clients a 360º-view of their customers; letting institution staff see everything about each customer in one consolidated view. Core providers made information silos obsolete.
However, as ancillary products came to market, many included embedded image storage capabilities. As an industry, we started all over again, building new silos.
Sir Winston Churchill once said, “Those who fail to learn from history are doomed to repeat it”.
Have we learned from our industry’s history? Is it wise that many ancillary vendors embed document image storage capabilities within individual systems? Is it a competitive advantage by repeating prior mistakes, or are we hurting our financial institution’s net income efforts by forcing higher FTEs (expenses) to track compliance and to serve their clients?
There are many “collection team”-originated legal and compliance documents that need to be accessible by staff outside of the collection department. Storing these in a “collection system silo” may work for collectors, yet harms the overall institution. Related to this, when a collector cannot reach a debtor (perhaps an invalid phone number or address), accessing the debtors’ loan application often yields more contacts and/or more contact phone numbers faster than web or skip trace searches thereby speeding debtor communication. Reviewing loan origination documents to read critical account information known at the time of application or loan closing can be an invaluable collector resource. If those documents are stored in the loan origination ‘silo’, or if your collection system cannot natively show you all imaged documents related to the person or the account on your ‘collection screen,’ your collection team is not gaining immediate access to the best tools to get their job done.
If you are the compliance officer at a financial institution, your job is far more difficult if you need to locate critical documents by rummaging through many varying ancillary systems to see everything about this one customer.
Collection compliance, like most other operating areas of banks and credit unions, is far more compliance-aware, far more vulnerable to collection-compliance missteps, and institutions are paying the ‘failure to comply’ collection-compliance price daily.
Whether your cost is higher FTEs to track compliance and the associated heightened compliance failure risk; or direct fines and penalties for compliance missteps due to systems that do not aid your compliance tracking, ancillary systems that isolate images are costing your institution unnecessarily.
What is your call to action? As an institution, to strengthen compliance and contain FTEs, you should insist that all mission-critical software that produces compliance-applicable documents or systems that need access to critical ‘compliance-imaged documents’ feed into an institution-wide image system and natively access that same system.
Any vendor that fails to do this and delivers software that ‘silos’ images and does not feed and access an institution-wide image solution is both repeating history and costing your institution–at the very least–unnecessary compliance risk.