Extending the value of Financial Services documents

By Craig Smith

Financial services organizations are significantly changing the way they use documents—driven by four converging trends. In response, innovative Integrated Document Solutions are now being adopted.

Four converging trends in document handling
Tower Group observes in its white paper, “Bank Account Statements: Underestimated, Underutilized, and (Finally!) Undergoing a Renewal”, that financial services organizations no longer see documents as tactical information delivery tools. Instead they are using them as strategic business assets to enhance the customer experience. Traditional static legacy statements are now being transformed into dynamic strategic business assets. Organizations that view documents strategically now have a valuable asset in the areas of flexible delivery, self service, regulatory compliance, customer service, personalization, customer retention and process automation.

As the volume and variety of document types continues to expand, increased competitive pressure also drives the need to improve the customer experience while reducing costs.

Successful financial services organizations taking this approach have adopted a life cycle view of the entire document management process, one that is integrated from data to delivery. Why? To reduce costs and more efficiently create both high-volume and real-time interactive personalized documents.

The most recent trend is the integration of document management with enterprise content management (ECM) systems to create high-value transactional content solutions. Increasingly organizations are deploying document content-enabled vertical applications for business requirements such as loan origination, new account enrolment, wealth management, brokerage and claims processing applications.

Marketing documents: the key to customer relationships
Sales and marketing documents are key to building relations with prospective customers. Marketing documents come in a wide variety of types and formats, which are aimed at different audiences at different stages in the selling cycle. This presents the interesting possibility that a single type of marketing document is not static, but is changing and must adapt to the audience, the selling stage, the sales channel, the language, the geography, the demographics and other factors.

Increasing the effectiveness of marketing and sales materials, while reducing the cost of rapidly creating, producing, distributing and managing them, is now an achievable goal.

Personalized documents strengthen customer loyalty
Documents are critical to strengthening customer relations, according to research reported by Madison Advisors, in its white paper “Increasing Loyalty and Selling Opportunities with Personalized Financial Statements”. Many organizations are required by law to provide customer transaction statements on a regular basis. Historically, these statements have been viewed as a necessary evil and a business expense. Recently, the shift in thinking is that customer documents are vital communications vehicles that build and strengthen relations with existing customers in several ways:

1. Customer statements that contained purely transactional data, as required by regulators, are now being expanded with personalized promotional elements tailored to each customer. Using the native language of the customer, personalized messages are based on customer activities and provide targeted suggestions based on customer profiles. Customer-facing documents are being used to cross-sell by introducing new products and services.

2. Financial services organizations are using customer documents to communicate information other than personalized marketing messages—information such as community initiatives, branch openings, changes to branch hours, alerts and disclosure information as required. Even offers from affiliates can be added to customer documents, where such offers are attractive to the recipient.

3. Using customer documents to strengthen customer relations is ideal because customers may not read statement inserts, but they do open and read their statements. Whereas most statement inserts are discarded, the majority of customer statements are retained.

4. Charts and graphics can be used effectively to summarize information and to give each customer an overall view of their relation with the organization. Graphical information is especially powerful for consolidated statements.

5. Organizations are using customer documents as information portals from customers to conduct customer research, update customer data such as name and address, manage customer preferences and maintain customer permissions.

Changing customer expectations require new approaches
Just a few years ago our expectations of customer-facing business critical documents were far different than today. The typically batch-driven process involved merging pre-formatted data with a document template that could handle a basic level of customization, then sending the file to a fulfilment house for printing and postal distribution. A change to the template would often mean waiting weeks or even months as it moved slowly up the ‘to do list’ of the IT department—hardly a personalized document and certainly not real-time.

In today’s highly competitive environment, more is expected from those we do business with, making the capture and retention of customers a challenge for any organization, but especially in financial services and insurance. We are happy to embrace customer self-service, but if we can’t access our statement when and how we want, or get the information we require, then we’ll quickly look elsewhere.

Reduce total cost of ownership and make it personal
Never has document management had such a key role to play in the fortunes of the business. Consequently the pressure has never been greater to rise to the occasion. However, for the vast majority of businesses, there is a constant pressure to reduce operating costs across the enterprise, while speeding up the way tasks are accomplished.

There are also increasing competitive pressures to improve the customer experience. Many organizations are seeking real-time, interactive customer correspondence solutions providing the right tools at the right time that can be easily integrated together and with their existing back end systems. In response to these challenges, the next generation of data and document management innovation has entered the spotlight—the Integrated Document Solution.

Integrated Document Solutions for the enterprise document lifecycle
Integrated Document Solutions (IDS) have been specifically engineered to remove the barriers that those involved with document management continually strive to surmount: the uncertainty and risk associated with lack of control over document creation; the dependence on a single vendor for print fulfilment; slow response times, coupled with the inability to react quickly to change, as well as the often costly juggling of multiple software products that don’t always integrate as well as the vendor would have you believe.

IDS solutions are end-to-end data and document processing suites that enable businesses to quickly and efficiently create, format, control, transform, store and present critical business documents (e.g. statements, invoices, policy documents and credit reports) in a cost effective way. They are able to manage multiple output formats, ensure brand consistency across documents, and enable self-service channels (e.g. via a web portal) for document presentment. An IDS can offer fast integration with minimum impact on existing back-office applications or ECM systems, by leveraging the existing investments in infrastructure to keep the initial outlay costs down.

Integration from data to delivery: how IDS works
Xenos Group has introduced an innovative IDS approach using best-of-breed technologies that give power back to the business user who can now control the enterprise document lifecycle from data to delivery. Rather than providing one design tool for all, they use industry-accepted design tools such as Adobe InDesign, Adobe Dreamweaver and Microsoft Word to enable different parts of the business to implement their document design requirements without extensive training and knowledge handover or worse – reliance on an already overstretched IT department. This enables users to quickly and effectively create highly personalized documents that use variable data and complex business rules to determine content and look of a document, while retaining tight control over any regulatory issues and ensuring the consistency of brand and layout.

Changes in the business that might require demands for new document types or the re-branding of existing lines can be accommodated quickly and easily. New documents can be visualized in formats such as PDF for submission and approval at each part of the design stage. This approach allows the business to immediately realise the wider operational benefits of an investment in this technology. It also helps to ensure consistency in document production processes across disparate application environments at an early stage. In addition, a single solution approach means that a common skill set can be used for the design and deployment of future documents, avoiding the ‘silos of knowledge’ trap inherent in many other document composition systems.

Three components deliver one innovative IDS solution
An IDS typically includes three key components. The first provides comprehensive connectivity, data translation, process flow and control functionality. This allows the solution to be quickly and easily integrated with the process of document automation and with enterprise application environments. The system is able to process any file output from any system, or access any database without changes to existing systems. On receipt of this data it is ready to map, re-format and verify the raw data to a common XML-based standard for ingestion into the core document production engine.

The production engine is the second component, which can transform and repurpose the input data and documents to generate output in any industry standard print format including IBM AFP, Xerox Metacode, HP PCL, Adobe PDF and TIFF and electronic formats, such as Adobe PDF, PNG, HTML and XML for web access and delivery. It is able to create, for example, indexed documents for long-term archive or indexed PDFs for ingestion into the third component, which publishes the documents for secure access by the appropriate user or customer via a web-based portal.

IDS solutions are built using common, open, industry standards such as XML, Java and J2EE and designed to run on almost any platform. Scalability to easily manage very large batch volumes, as well as more dynamic and ad-hoc document creation processes is critical. Compatibility with common application server environments such as WebSphere, JBoss and BEA enable deployment within Service Oriented Architectures (SOAs) resulting in easier, more cost-effective management, both locally and remotely within a common application framework.

Benefits of IDS implementation
In Xenos Group’s experience, organizations adopting this best-of-breed approach can realize significant financial and resource benefits that include reduced development costs, improved time-to-revenue and an enhanced overall customer experience with highly effective one-to-one communications. Many organizations have achieved secondary benefits by utilizing components in an IDS other than those components implemented to meet their original business goals.

One example is a U.S. investment company that replaced its internally-developed system with an IDS. In doing so it was able to streamline workflows and enable highly personalized statements to be designed, while reducing production costs by an estimated 70%, equating to nearly $3 million worth of savings over five years.

A similar ROI was achieved by one of the world’s leading financial services institutions. It was able to significantly lower total cost of ownership by retiring disparate systems and standardizing on a single IDS platform, reducing customer communication costs by 90%. The cost per piece was cut from $0.43 to $0.04, resulting in annual cost savings of $10 million.

A third case is from a European financial services organization, managing tens of billions in assets, driven by a strategy to maintain the strong relations it had developed with its high net worth clients and financial advisor partners. Although reducing costs was an important consideration for implementing an IDS, the main reason was to improve the communication of financial information in a number of ways:

1. Redesigning customer documents to present client data in an informative and graphical manner.
2. Providing an online channel that communicated value via these client documents, extending the brand value of the organization and building stronger client and partner relations.
3. Reducing staff time and costs involved in the document management cycle. Prior to the IDS implementation, partners were expending resources to create high-quality documents for their clients instead of relying on the client documents produced by the organization. Now the partners use the documents created by the IDS.
4. Rapidly migrating to online commission statement delivery from the old process of printing and mailing tens of thousands of statement pages every month to its partners. With the IDS they could now manage the entire enterprise document life cycle, from design to delivery—a significant competitive advantage in the challenge to retain high net worth customers and financial advisor partners.
   

About Craig Smith
Craig Smith is Vice President, Xenos Group Inc., responsible for customer strategy and sales. Prior to Xenos he consulted with technology companies, drawing on many years experience as an executive with a major Canadian financial services firm, where he held leadership positions in both IT and business development.
www.xenos.com/fst_ids