This article is from the annual FinTech Forward special report.

The long-sought paperless mortgage, technically possible for years, is still rarely sighted in the wild. But BB&T has managed to make it a more common event.

Over the past year, the nation's 16th-largest bank has moved much of the process of applying for a home loan online. Increasingly, applicants fill out most of the forms electronically as part of a system that routes the information to loan officers who can flag exception items or omissions.

The process, which allows would-be homeowners to apply for mortgages from the convenience of their home computers, shaves up to five days off the time it takes BB&T to decide on a loan. This frees up bankers to advise loan applicants and leads to more satisfied customers.

"Nothing is better than being able to close a loan when the client wants it closed," said Mike Jablonski, manager of retail mortgages for BB&T. "This way it's smooth and easy."

The push to turn documents into data transcends lines of business and typifies a trend that is sweeping the financial industry: reconfiguring processes for faster decision making. As part of this workflow transformation, banks are also tapping technology to personalize interactions with customers and serve up information and advice via tablets and other mobile devices.

The payoffs from these workflow improvements include faster processing, stronger loyalty, lower costs and higher revenue.

For example, Tangerine Bank, the Canadian institution formerly known as ING Direct, slashed the time for developing mobile banking apps by a month, according to IBM, which supplied the bank with computing power and know-how. The bank used IBM's PureApplication System framework, which automates certain routine tasks and lets the bank configure a test environment in less than 30 minutes.

After automating its mortgage processing operation, employees at Australia's Suncorp Bank, which bought a paperless banking system from Kofax, assembled at the bank's offices in Brisbane, where they filled 48 bins with paper as part of a celebration of casting away clutter.

Paperless treasury services from Wausau allowed a $20 billion-asset U.S. bank, without adding personnel, to sign up corporate customers one-and-a-half times faster, the financial technology company said.

Several factors are fueling the trend toward faster decision making. One is the ongoing pressure on banks to post profits at levels sufficient to command loyalty from shareholders. Banks are looking to wring returns from existing businesses and bulk up in others, such as wealth management, that hold the promise of greater payoff, experts say.

A second push comes from customers, who have become more demanding.

"Customers are used to the experiences they get from Internet companies and online retailers," said Likhit Wagle, who specializes in banking and financial markets for IBM. "You need to be thinking like a retailer and operating like a low-cost manufacturer."

Roadblocks include the need to enter data repeatedly into multiple systems, struggles to collect the right information the first time from loan applicants, and battles within banks to pull together and present to clients information about prices, terms and offerings.

According to bankers, simply apprising corporate customers of the status of their applications for loans and other services tends to be more difficult than either bankers or customers expect.

Ideally, information about a client that a bank enters into one system flows into other systems the lender uses as part of its underwriting or business process. However, at many banks the information fails to pass between systems unless someone enters it manually at each stage.

"I was in a bank the other day, and the woman with whom I met was keying away furiously entering a sales lead on one screen while on another screen she keyed in the same information for an application that tracks projects," recalls Ron Wellman, a principal in the banking industry division of Pegasystems. "That's obviously where you don't want to be."


Nearly a quarter of bankers say that enabling corporate customers to supply information once and publish it to multiple documents, as well as being able to let customers look up the status of their requests, would most improve the process by which clients open accounts or add services.

Among North American bankers surveyed, 21% cite the need for too many people or business divisions to coordinate as the top reason companies drop out of the bank's process for bringing them on as customers, while 16% say customers leave after deciding the bank took too long to decide on a loan amount or terms.

"If you're looking at three different banks, you're going to go with the one that gives you a good deal in a reasonable time," Wellman adds.

As sensible as that sounds, at many banks, systems designed to engage customers do not necessarily synch well with internal systems storing the information that drives decision-making.

The industry is dividing into what Jost Hoppermann, Forrester analyst, terms "high-speed" and "low-speed" banks. High-speed banks have the budget, know-how and appetite to overhaul systems that support fast decision-making. Low-speed banks continue to mend their old systems, which they lean on to support comparatively limited ways of engaging customers. "If you do not belong to the rule of high-speed banks and do not have different ways to win customers, it might just postpone the final end."