Bank: MP Bank, Iceland
Problem: Paper-based ways threatened to upend the bank amid an influx of customers and emboldened regulators.
Solution: Digitize processing and compliance with a document management system.
MP Bank, Iceland's only independent commercial bank, stepped up in 2008 to provide a place for the people and businesses of the Nordic island nation to put their money after all the country's major banks failed in what the International Monetary Fund says was the worst banking collapse in history, based on the relative size of the economy.
Customers poured in — deposits quintupled to $344 million by the end of 2009 — as MP provided Icelanders a promise of stability amid the morass. They were welcomed, of course. But this forced big change at the former conservative investment bank. Granted a commercial banking license on Oct. 10, 2008, just days after the last of Iceland's big private banks was nationalized, MP had to find a way to quickly switch from processing transactions manually, the way various investment banking operations are still performed.
With staff buried in paperwork, executives felt they had to move to avoid losing MP's new business to the reconstituted state-run institutions or to the local savings banks. Staying paper-based amid unprecedented transaction volume would inevitably result in logjams that would lead to customer service problems.
The inability to quickly cull from a thicket of manually entered data was also threatening to derail MP's compliance efforts. Regulators, pressured to enforce rules and apply stronger risk monitoring after the system cratered on their watch, came calling. MP's offices were raided on Nov. 24, 2009, by the government in relation to an ongoing probe into allegations that shares in local savings bank Byr were sold during a suspension of such dealing in late 2008. An MP spokesperson says the investigation did not spur the bank to seek an electronic document management (EDMS) solution.
However, MP in June 2010 tapped EDMS provider M-Files to streamline the bank's compliance and processing of new deposit, savings and credit card accounts, as well as to manage overdraft protection, residential mortgage and corporate loan applications. The bank cited quicker document production to meet audit demands by regulators among reasons for tapping the solution. The system was launched in September 2010 to collate newly opened consumer accounts and was extended two months later to process mortgage and business loan requests. Plans are to deploy M-Files across the entire bank to better administer the estimated 18,000 electronic and paper-based files MP produces each year.
Regarding new loans and accounts, "The data is all in the computer now," says Thorunn Bergsdottir, MP's quality manager. "There are fewer phone calls. There are fewer emails. Everything is electronic." Therefore, users can more easily search for documents to show auditors or to complete work. At press time, Bergsdottir was set to demonstrate M-Files to investment banking staff to boost adoption of the system in trading operations.
The application organizes data so it is easily accessed on-screen and searchable electronically via user-defined attributes, or metatags. Documents are categorized according to account name and product, such as a "loan" or "credit card application." M-Files also tracks changes made to documents and the bank staffers who make them and provides version control. Automatic notifications are sent upon task completion to the next person in the workflow. And simultaneous editing is banned to ensure file integrity.
Users can configure the system to allow only certain individuals access to files and permission to edit particular documents. For instance, MP is prohibited from having lending decisions and loan payouts emanate from the same person, while a third person in the back office must act as a backstop to try to prevent errors. Unlike consumer loans, certain business loans have to be approved by a credit committee.
Options to "Save to M-Files" and "Open from M-Files" are included in the "File" tab of Microsoft Word, Excel and Outlook. M-Files is also integrated with MP Bank's custom-built CRM and loans systems. And it is linked with the bank's ID scanners, so staff can scan documents such as passports to digitize new accounts and comply with "know-your-customer" regulations.
Competing solutions include EMC Documentum, Hyland Software, Laserfiche, OpenText and NextDocs. "The massive increase in customers when the bank opened its doors to commercial accounts required us to implement a document management system," Bergsdottir says. "M-Files lets us make the process quicker for customers, and with the permission access, be compliant."
