The main benefits of digital document management are: fast retrieval, access to data from anywhere, reduced storage costs and an efficient, environmentally friendly operation with a return on investment that can be measured on the balance sheet.
Credit schemes often only contain the financial aspects of the loans (interest, costs, performance), while the details of the underlying loans, collateral and security contracts are often only available in paper form.
However, it is often the case, such as in the renegotiation of loans, the enforcement of collateral or bankruptcy and liquidation proceedings, that the availability of contracts quickly and in good quality is of paramount importance. Partially or completely invalid contracts (not properly signed), incomplete documents or data can cause serious economic damage, which can be successfully avoided thanks to the preventive function of digitisation and related data processing activities.
In many cases, it is also necessary to extract information from credit agreements that was not required before, for example due to newly required supervisory data reporting (e.g. HITREG).
The process and impact of digitisation
The first part of the process involves scanning or digitally photographing documents, then using OCR (Optical Character Recognition) technology to convert the data into a text-searchable format. In addition to free-text search, retrievability is also ensured by the possibility to assign labels, identification data and document types to digital documents uploaded to the system according to individual needs.
The digitisation we then use artificial intelligence to check the validity and completeness of the contracts, the completeness of the transaction documents and their consistency with the data in the banking systems. In this way, gaps and errors can be corrected or made good in a timely manner, which, for example, allows the client to avoid significant economic losses by reducing the time needed to process a payment in the event of insolvency. Similarly, AI can be used to retrieve data that was not previously stored but that needs to be reported.
In the long term, document digitisation in the lending system will also be an indispensable condition for the spread and simplification of digital lending in the future.