The financial industry is a complex one. High levels of innovation, fluctuating barriers to entry and a strong adoption of (AI) technology means that this industry is often ahead in technological terms. Growth at this scale has its drawbacks though – especially when it comes to data management and corporate archives. This is where DMS software enters the picture.
The average financial institution has a truly staggering quantity of customer data to manage. From mortgage files to loan agreements and from customer due diligence documents to conversation transcripts, there is an endless quantity of data to go through. Over 90% of the world’s data has been produced in the last three years so it comes as no surprise that the amount of customer and user data being gathered is growing commensurately. Also growing are global data storage needs.
These days, filing cabinets, while still in use, have largely been replaced by document management systems, often abbreviated to DMS. However, this shift didn’t occur until the ‘80s. Until then, filing cabinets were the norm and were unavoidable in any office. As is often the case with technological development, the rapid growth of computing capabilities in the ‘80s and decades that followed gradually eliminated the need for physical storage units and made way for online, digital document management software.
DMS software solutions today
In 2021, document management systems are a far cry from what they used to be. Document management systems now are powerful, technologically advanced systems that operate efficiently and, increasingly, in the cloud. Cloud-based document management systems are the next step in DMS evolution, but adoption is slow given the low number of qualified cloud-based DMS suppliers.
Before going into any detail about document management systems, we’ll start by touching on what such systems, at their core, are. In essence, a document management system is a type of digital software system that enables the user to store, track and manage electronic documents as well as pictures of those documents. Initially, DMS software was designed to convert paper documents into digital counterparts. These days, thanks to technological advancements and development, document management systems are capable of a great many things, from tracking and distributing documents to managing numerous processes such as workflows and output systems.
Types of DMS software
Various distinctions are drawn between different types of document management systems:
- Content management systems: This is a type of DMS software that manages any type of content relevant to your business processes. Such systems make it easy to manage and populate websites. The best example of this is WordPress.
- Records management systems: This kind of system is most often used by medical professionals, the primary purpose being to store sensitive medical records.
- Digital file systems: This type of document management system is most often used by companies in the process of digitizing their paper records. The software allows the user to save text or images originating from paper by creating a digital scan.
- Cloud-based systems: This category of DMS software is probably the most advanced. The system is cloud-based, meaning that everything stored is done so in a cloud environment. Cloud-based DMS solutions make possible huge quantities of storage space, heightened security in case of a network failure and unlimited user accessibility. An example of a cloud-based document management system is the Hyarchis Document Management system, or HDM.
- Private server systems: Also known as on-premises document management systems. The DMS software is hosted privately on a server on business premises. This puts your company in the position of being solely responsible for managing and securing the DMS network.
Operational efficiency and DMS functionality
With that in mind, the next step is to define what makes a ‘good’ document management system. Admittedly, preferences vary so it is impossible to say what makes a good or less good document management system. However, some features are arguably key to DMS software that meets operational requirements.
Key DMS software features
- Version control. Also known as versioning, version control allows users to track and manage changes made to a document within the DMS software. Ensures that new edits are tracked and saved while old document versions are archived.
- Integration. These days, DMS solutions must support integration with other business software and tools, like the Office Suite. However, a functional DMS must also integrate with ERP databases.
- Regulatory compliance. Processing or storing sensitive documents must be done so in accordance with relevant legislation. An effective DMS solution makes this possible.
- Scalability. As your business grows, so too will the demands put on the DMS software you choose. Choosing a DMS system with scalability can help avoid later document migration headaches.
- Data security. Breaches or faulty storage can be disastrous for businesses. Choosing software with strong security protocols in place is therefore of paramount importance.
- Usability. This might seem like a no-brainer, but DMS software must be easy to use and should work flawlessly. If employees have to deal with a system they cannot use, work will stagnate or stop altogether.
- Collaboration. The DMS solution you choose should make (online) collaboration easy. A good DMS solution should therefore include options such as live editing, plugins, and file sharing.
- Scanning. A basic function of any DMS solution should be the ability to scan any physical document your company has. After this, the document can be stored as a DOC, PDF, or JPG file.
- Archiving. The best DMS is often the one that can automatically archive files within a set period.
- Management of inventory: Multi-purpose DMS solutions can and should be able to help you replace and track any business inventory.
While there is a variety of DMS software available today, few are all-purpose tools designed for operational efficiency. Regardless, most industries benefit from using such systems. That being said, one industry has more benefit to gain from document management systems than most others – the financial industry.
DMS software in the financial industry
Financial institutions deal with some of the most sensitive customer data there is. Often, these organizations rely on finance software for their various business processes. The systems used for this are rarely designed to manage all types of data. That is why most financial institutions also use some form of DMS software.
How does a powerful DMS benefit today’s financial institution? Unsurprisingly, the reasons are not too dissimilar to the benefits enjoyed by other industries using advanced DMS solutions. However, the impact is arguably more pronounced given the financial aspect of these documents.
First of all, advanced document management systems improve security. Especially when it comes to cloud-based, ISO certified DMS providers is this the case. Improved security measures help keep data more secure and gives companies increased peace of mind. Using DMS software also enables more effective information sharing. The staggering quantity of documents in the possession of many financial institutions means that things can get lost, misunderstood, or complicated very quickly. Centralized, fully equipped DMS software can help manage file and document sharing and keep a clearer overview of the audit trail.
Modern DMS solutions (should) also offer pertinent departments advanced search functionality. Such solutions store documents and data in such a way that digitized archives become fully searchable, making the proverbial needle in a haystack easier than ever to find. Additionally, metadata is automatically stored. Mobile access is an additional benefit of the modern DMS software. Users can access documents and archives anytime, anywhere and can enjoy a consistent DMS user experience. Supporting this, many modern DMS solutions assist in task management. The modern financial worker must complete a plethora of tasks daily so automated task management and alerts can help immeasurably.
Regulatory compliance assurance is a key differentiator between the average DMS software and the modern, advanced one. The most effective DMS systems are the ones that help the users stay compliant with all relevant regulations, thereby making compliance management a challenge of the past.
Given our extensive history in the development of cutting-edge DMS solutions, we get a lot of questions about best practices. If you want to know more on how to proceed with a DMS or are interested in learning more about our Hyarchis Document Management system, please don’t hesitate to get in touch. If you want to do some more research first, please feel free to check out our Hyarchis Document Management video as well.