This document discusses steps that banks can take to achieve greater levels of paperless transformation across their enterprises. It outlines that while banks have made progress in reducing paper through initiatives like electronic statements, they remain highly reliant on physical paper flows. The document describes the stages of paperless transformation and barriers to further transformation. It recommends that banks take a holistic enterprise view and align paperless capabilities to maximize benefits like cost reductions, improved compliance and customer satisfaction. Case studies demonstrate savings and efficiencies achieved through comprehensive paperless strategies.

1. Paperless
Transformation
Next steps for maximizing benefits across the enterprise

2. 2

3. 33
Banks continue to seek ways to
reduce their reliance on paper-driven
processes, but with paper still very
prevalent and profitability an ongoing
challenge, are they moving far or fast
enough? Capco sees opportunities
for further paper reductions that can
lead to greater operational efficiency,
reduced costs and increased
customer satisfaction.
In recent years, the elimination of labor-
intensive, paper-driven processes has
been a major priority for the financial
services industry. And the industry has
made great strides in this direction,
from Check 21 to paperless statements
and online/mobile banking.
Yet banks remain highly reliant on the
physical flow of paper for customer-
facing activities, and transporting
paper across the enterprise constitutes
a major cost. Gaining the benefits of
further paper reductions will require
banks to think beyond the individual
initiatives they may have undertaken,
such as check digitization or electronic
signatures, and adopt a unified,
enterprise-wide view of paper
elimination. This Capco white paper
discusses the steps banks can take
to achieve greater levels of paperless
transformation.
Stages of paperless
transformation
Figure 1 represents the various
stages of paperless transformation.
Today, few banks are far enough
along this continuum or have taken
the necessary steps to achieve
significant paperless transformation.
Typically, the journey begins with
low-investment initiatives, such as
determining whether processes can
be redesigned or if paper needs to
be generated in the first place. Other
steps include changing employee and
customer attitudes and behavior—
for example, asking customers if they
need a receipt or incenting customers
to use paperless channels such as
online, mobile or phone banking.
Paperless
Transformation
Next steps for maximizing benefits
across the enterprise
By Marcia Wakeman, Partner, Banking, Capco; Adrian Ungureanu, Principal Consultant, Banking, Capco;
and Tony Tummillo, Senior Consultant, Banking, Capco
The journey then progresses into
implementing technical solutions
aimed at eliminating the generation
and routing of paper—for example,
e-signature, document imaging and
workflow initiatives. This stage
involves introducing or adapting new
technologies, as well as development
efforts required to customize these
technologies. It typically requires
the greatest amount of effort, but
it’s where the most significant
benefits can be achieved.
The next stage is where enterprise
alignment occurs. Here, banks seek
to align various paperless capabilities
and communities of practice into a
unified strategy aimed at reducing
spending, expanding expertise and
achieving even greater benefits.
It should go without saying that
In recent years, the elimination of labor-intensive,
paper-driven processes has been a major priority
for the financial services industry.

4. 4
Implement solutions
Degree of transformation
Associatedbenefits
Lobby for
change
Change
behavior
Image
capture
e-Sign
Enterprise
alignment
Workflow
e-Forms
Re-engineer
processes
developing this unified strategy
earlier in the process would maximize
the solutions investment payoff
described above.
When banks achieve a significant
degree of transformation, they tend
to assume leadership in the industry
and become advocates for changes
in banking laws and regulations to
accelerate the adoption of paperless
solutions.
The value of
paperless
transformation
There are several main categories
of benefits that banks can achieve
by taking a broader approach to
paperless processing:
Operational efficiency, productivity
and cost reduction: Reduced reliance
on manual processes, fewer errors
and removal of bottlenecks; faster
decision making; and less expense for
transportation, back-office operations
and document storage.
Improved knowledge management:
Documents in electronic form can be
searched and shared more easily and
extensively across all customer-facing
channels and back-office support
functions.
Greater compliance and accountability:
Secure record retention; better access
control and data protection; improved
audit processes; increased audit
frequency by streamlining signoffs
and reviews; and a more thorough
and accessible audit trail.
Along with these main benefits,
a well-executed paperless
transformation can also lead to
a series of secondary benefits:
Lower real estate requirements
and environmental costs: Reduced
need for physical storage facilities
and reproduction resources, along
with the related reduced costs and
environmental footprint.
Enhanced customer service:
Cross-channel availability of informa-
tion helps improve the overall
customer experience by accelerating
response time and ability to provide
enhanced services.
Improved business continuity
and disaster recovery: Enhanced
resilience and response to incidents
such as floods and fire by eliminating
the environmental risks associated
with paper.
Organizational flexibility: Expanded
options to relocate, consolidate or
outsource operations and respond to
next-generation banking demands.
Figure 1. Stages of paperless transformation

5. 55
Candidates for paperless transformation
Any process that is reliant on the physical routing of paper is a candidate for
paperless transformation, including:
• Deposit account fulfillment and maintenance
• Mortgage, consumer, commercial and small business lending operations
• Treasury management activities
• Trade finance operations
Barriers to paperless
transformation
Several barriers can hinder most
banks’ efforts to address the paperless
challenge, making what might seem to
be a trivial undertaking a significant
challenge.
Many times, the lack of an
enterprise-wide paperless strategy
and approach can result in the failure
to gain the necessary support to fund
paperless solutions. Perhaps worse,
the absence of such a strategy often
leads to development of solutions that
achieve less than optimal benefits.
Taking a broader stance ensures that
the shared benefits that exist across
the enterprise are realized.
The disparate nature of bank
operations makes it difficult to
understand the true costs and
problems inherent in paper-driven
processes. For example, a bank may
only elect to image documents in the
back office and ignore the benefits
that could be achieved by capturing
these images at the point of origination.
Legal issues can also create
barriers to paperless transformation.
Litigation, claims and loan recourse
efforts have historically been reliant
on paper documents, making it difficult
to achieve greater degrees of paperless
transformation. While the industry
and applicable laws are supportive
of paperless initiatives, banks are
sometimes reluctant to eliminate paper.
User adoption presents another
barrier. There is something very
psychologically reassuring when it
comes to paper. This is especially
true when it comes to signing or
executing documents. Despite the
implementation of electronic signature
pads that emulate the act of an ink
signature, people are still struggling
with the transition away from paper.
In a typical electronic environment,
20 percent of customers would still
prefer paper if given the option.
Another barrier—around information
management and taxonomy—
emerges as banks achieve greater
degrees of paperless transformation
and seek to make unstructured data
more actionable. Such efforts are
extremely complex and require a great
deal of collaboration to be successful.
Garnering the appropriate resources
and executing the appropriate strategy
are critical success factors that
shouldn’t be ignored.

6. 6
The holistic approach
to paperless
transformation
Paperless transformation requires
more than changing processes and
implementing enabling technologies.
Banks can take additional steps to
achieve a greater degree of paperless
transformation.
Adopt a holistic or enterprise view:
A successful approach to paperless
transformation—as illustrated in
Figure 2—ensures all aspects related
to operations, transportation, and
retention or disposition are addressed.
The investment required and the
broad reach the solution will have
throughout the organization make it
important that the effort is driven at
the enterprise level.
Align paperless capabilities:
Significant transformation requires
alignment of paperless capabilities
and communities of practice into a
unified paperless strategy. This
alignment allows banks to leverage
their investment in paperless solutions
and related expertise.
Understand the true cost of paper:
Banks typically allocate costs to either
a front-end or back-office function
without considering the costs incurred
elsewhere in the enterprise. An
end-to-end cost-to-serve analysis of
critical processes will help reveal the
true overall cost of a piece of paper.
Effectively plan and manage the
transformation: What are the gaps
that must be addressed? How does
a bank in the middle of the paperless
transformation continuum move up
and to the right to the area of maximum
benefit? Is it a six-month or two-year
effort? What are the have-to-haves and
nice-to-haves? What is the timeline?
All are critical questions that must
be addressed along the multiple
dimensions of people, process,
culture and technology.
Case studies in
transformation
The value of implementing paperless
processes can be seen in the
experience and benefits achieved
by several major banks Capco has
worked with:
• An average of $3–5 million/year
savings in courier costs, based on
bank size and number of branches
Figure 2. A holistic paperless transformation solution
Front
office
Capture/
workflow
solution
Back
office
Financialimpact/businesscase
Paperless
transformation
Paper
retention/
disposition
Reporting/
communication
Business
continuity Transportation
Operations
Front
office
esscase
Operations
• 20–40 percent paper reduction
in sales and customer/account
setup processes
• 15–20 percent reduction in
paper generated by maintenance/
inquiry tasks
• 10–15 percent reduction in
transactions-related paper
• 15–20 percent less paper in
customer communication
• 25–35 percent less paper required
to support internal processes
(operations, audit, compliance, etc.)
• Minimal technology investment
realized by leveraging other
equipment or licenses across
the enterprise
• High adoption of e-signature
capabilities (more than 80 percent)
across a series of customer-facing
sales and service processes
• Significant efficiency improvements,
resulting in 50 percent improvement
in cross-selling and 25 percent
improvement in back-office
processing time
• Reduced risk and error rates
(by up to 40 percent) through
electronifying manual paper
processes
• Increased customer satisfaction
and customer referral rates
• Platform that can be leveraged
for increased usage of data
typically buried in forms
Despite the barriers highlighted
earlier, achieving greater degrees of
paperless transformation can offer a
wide range of benefits to banks and
their customers. The approach requires
engagement at the enterprise level,
but with a well-executed strategy,
banks can lower costs, improve
customer satisfaction, become better
positioned for “next-gen” products
and offerings, and ultimately enhance
shareholder value.

7. 7

8. Marcia Wakeman is a partner at Capco in the Banking practice. Her focus
is in sales and service processes and the supporting core applications.
Marcia has more than 18 years of industry and consulting experience. She is
a business architect who has helped clients design multichannel, paperless,
end-to-end solutions enabling enhanced customer experience, revenue
generation and operational efficiencies. Marcia has led numerous business
and technology transformation initiatives for the top 15 financial institutions,
including implementing branch transformation, business process manage-
ment, call center and e-commerce solutions. Prior to joining Capco, Marcia
spent nearly 10 years with a global management and technology consulting
firm. She also held various roles at Pega, Fidelity Information Services and Citizens Bank.
Marcia.Wakeman@capco.com
Adrian Ungureanu is a principal consultant in Capco’s Banking practice, specializing in
business process re-engineering and technology transformation. He has more than 15 years
of industry experience, particularly in front- and back-office operations, items processing, and
image capture. Adrian has focused primarily on strategy and transformational initiatives, with
a keen eye toward improving operational efficiencies, increasing profits and leveraging new
technologies, while identifying and mitigating risks. Prior to Capco, he held various positions
within the financial services practice at a Big 4 consulting organization and Wachovia Bank.
Adrian.Ungureanu@capco.com
Tony Tummillo is a senior consultant at Capco in the Banking practice. Tony has extensive
experience in developing, implementing and managing enterprise content management and
document imaging solutions. Additionally, Tony is experienced with records management policy
and records retention schedule development. Prior to joining Capco, Tony spent more than
20 years in the financial services industry, where he held a variety of positions in banking
operations and project/program management.
Anthony.Tummillo@capco.com
About Capco
Capco is a global business and
technology consultancy dedicated
solely to the financial services
industry. We work in this sector only.
We recognize and understand the
opportunities and the challenges our
clients face. We apply focus, insight and
determination to consulting, technology
and transformation. We overcome
complexity. We remove obstacles.
We help our clients realize their potential
for increasing success. The value we
create, the insights we contribute and
the skills of our people mean we are
more than consultants. We are a true
participant in the industry. Together with
our clients we are forming the future of
finance. We serve our clients from
offices in leading financial centers
across North America and Europe.
Worldwide offices
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Frankfurt • Geneva • Johannesburg
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Washington DC • Zürich
To learn more, contact us at
+1 877 328 6868 or visit our website
at capco.com.
© 2012 Capco.
All rights reserved. T1107-1112-01-NA