A large Latin American bank transforms to improve profitability

Industry

Banking, Financial Services, and Insurance (BFSI)

Challenge

Double profitability in two years

Solution

Iron Mountain Intelligent Business Process Management (iBPM)

Value

Reduce costs, increase efficiency, and gain control with better, faster access to information

A large Latin American bank aimed to double its profitability in two years. Spotting the inefficiencies inherent in document-centric, highly manual, transactional banking processes, the organization targeted internal efficiency improvements to drive profitability increases.

The bank trusted Iron Mountain to consolidate and simplify its document handling and manual workflows. Iron Mountain’s Intelligent Business Process Management (iBPM) services enabled the bank to centralize operations from 11 service locations into a single hub supporting 1,400 branches. The iBPM services also provided the bank with quick access to high-quality data, which is essential for faster decision-making.

Iron Mountain supports the Latin American bank by processing over 130,000 monthly files for approximately 50 of the bank’s products, spanning commercial, retail, and wealth management. With Iron Mountain’s support, solution, and expertise, the bank achieved a 24-hour turnaround in document processing and access, improving speed to information and decisionmaking while reducing costs.

Investing in efficiency

In the banking industry, an efficiency ratio is a standard metric that indicates a bank’s profitability and operating efficiency. The goal is to achieve a lower efficiency ratio, not a higher one. Leading banks strive to keep efficiency ratios under 60, with ratios under 50 being optimal. For instance, a 50 ratio signifies that every dollar of expense supports two dollars of revenue. The formula is:

Efficiency Ratio = Non-interest Expenses/(Operating Income – Loan Loss Provision)

The Latin American bank enlisted the help of Iron Mountain to reduce its non-interest expenses (and thus lowering its efficiency ratio) by digitizing bank documentation and account information. For example, when a customer opens a checking account, it requires 10 documents; a mortgage requires 60-70 documents; a credit card requires 8 or more documents. Changes to an account, such as adding an authorized person or updating a beneficiary, generate more documents that must be updated in the digital account. Iron Mountain pledges that these documents are digitized, validated, stored, and managed most effectively and efficiently.

Providing controls and validation

As part of the Iron Mountain Intelligent Business Process Management solution, the use of software and services provides improved controls and validation to the customer. When a bank branch generates an account from a new mortgage or bank account, the information is captured in Iron Mountain’s document management software. The logistical movement of the file is tracked between the branches and Iron Mountain. Physical documents are picked up from the bank’s main logistics office once a day, five days a week. Iron Mountain tracks files from bank pick-up through transportation to ingestion, digitization, and storage at Iron Mountain facilities, delivering a closed-loop operation to ensure no documents are lost.

Furthermore, Iron Mountain software and services perform quality control validations to provide accurate and complete documentation. The Iron Mountain support team checks that all the necessary information—such as proper signatures, identifications, and validations—is included in the physical files and fully aligned with the bank’s business rules and requirements. Original documents are stored if required by regulations.

Making better decisions

Iron Mountain’s validation follows a consistent set of business rules and customer requirements. It ensures that the bank has fully and accurately captured the proper information before digitizing documents, giving the bank access to high-quality information. The speed of that access has also improved. Since implementing the Iron Mountain solution, the bank receives information within 24 hours of when transactions occur.

In addition, the volume of information transferred by the bank to Iron Mountain helps inform the following week’s workloads. This full-circle transparency aids in generating accurate reports for the bank and doing so quickly, helping the bank make better, more timely, databased decisions.

The Iron Mountain Intelligent Business Processing Management solution and expertise have been instrumental in helping the Latin American bank improve its profitability. By streamlining internal operations, reducing costs, and improving its efficiency ratio, the Latin American bank is better prepared for a stronger future.

Learn more about Iron Mountain Intelligent Business Process Management.