As community financial institutions adopt and expand their use of enterprise content management over the next five years, one segment of the business slated to have the fastest growth over the next five years has been one of the longest neglected for automation.
Human resources, long a budget stepchild to revenue-centered projects in IT and CRM, or to back-office efficiency programs for regulatory-heavy accounting and auditing areas, will be the focus of financial institutions. Currently, less than quarter of all banks have adapted document-management capabilities for HR, according to a recent study from Cornerstone Advisors.
The survey of small to mid-sized bank and credit union customers of ECM firm Hyland Software found that 59 percent of credit unions and 48 percent of banks plan to integrate HR procedures-hiring documentation, employee records, etc.-into a new or existing ECM platform at the institution. Each represents a 34 percent to 35 percent jump, respectfully, from current levels of HR automation, which exceeds the percentage increase of expected new deployments in compliance, lending, deposit services and other paper-intensive procedures.
"Human resources is [now] looked at as a good-cost center," says Dave Vegh, financial-industry marketing manager for Hyland Software, whose OnBase enterprise-content system is deployed at 2,500 institutions. "Traditionally, human resources hasn't been a big focus for banks, and a lot of them aren't using [ECM] for HR," he notes. Vegh says he spoke recently with a prospect in Colorado who was intrigued that ECM could be used for things like benefits enrollment or failsafe-termination procedures.
HR's applicability for document management has mainly grown due to legal and compliance reasons, such as protection against age-discrimination lawsuits or certifying an employee's receipt of a required form. But it also involves the growing need for efficiencies in storage and processing of documents in personnel offices.
Enterprise Bank in Lowell, MA, recently expanded its use of Hyland's suite into HR because of the glut of forms even a $2 billion-asset institution like Enterprise is struggling with. "We not only had to look at legal issues, but we had several workflows ongoing in HR," says evp Steve Irish. In the hiring process, the bank required several applications for the usual vetting, along with forms for a personality profile. Add to that the predictive-index documents that were derived from those forms, along with filing the usual assortment of resumes, and Enterprise was drowning in paper. The amount of work applied to the ECM system allowed Enterprise to eliminate the need for 1.5 FTE positions.
The new use of these functions for HR from Hyland, EMC, FileNet and others have, not coincidentally, grown alongside need at banks. The institution that allows former employees to hang on to working key fobs or functional network passwords is asking for trouble. Some documents have to be destroyed periodically for privacy concerns, which require some record itself.
Allen Harris, director of the global financial-services industry group for enterprise content and storage firm EMC, says the burgeoning interest in HR technology at banks stems from HR's aging image-processing workflow technology that was meant to store the flood of resumes arriving via Internet and fax during the mid-'90s hiring boom. "The bigger players out there have not really tackled that [HR] area until recently," says Harris.
HR and other corporate departments "want to have much more functionality and have the central IT manage it for them. In the past, that could have been an issue," Harris says. "The reason now that people like EMC and others are getting involved is there is a large-scale refresh going on."
