Making green while going green - A changing world for financial institutions.
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plantemoran.com
{Making green
while going green.}
A changing world for financial institutions.
Green banking has the ability to dramatically reduce costs of paper, printing, and storage while increasing the efficiency of day-to-day business.
{Making green while going green.}
A changing world for financial institutions.
WHAT IS GREEN BANKING? Likewise, with the increase in organization and
With environmentalists encouraging commerce to accessibility obtained with an electronic document
“go green,” it’s not surprising that this would impact management system, internal, external, and regula-
traditional banking. Green banking can loosely be tory audits and exams may be more manageable.
defined as anything benefiting the environment by Overall, your institution stands to benefit a great
reducing the carbon footprint of consumers or banks. deal from reducing operating costs and increasing
But green initiatives don’t solely benefit the efficiency through replacing paper with a state-of-
environment, demonstrating goodwill and greater the-art, automated document management system.
community responsibility. They also benefit
financial institutions, helping financial institutions HOW CAN YOUR FINANCIAL INSTITUTION
reduce costs, provide better customer service, and BECOME TRULY PAPERLESS?
ultimately increase the bottom line. In other words, how will your institution manage
information from customer to business and, in turn,
WHAT DOES THIS MEAN TO YOUR FINAN- business to customer without paper?
CIAL INSTITUTION? • E-signatures — One way to eliminate paper
Green banking has the ability to dramatically reduce is via electronic signatures (or e-signatures).
costs of paper, printing, and storage while increasing E-signatures eliminate the process of printing,
the efficiency of day-to-day business. How? By physically signing, and scanning in application
employing a document management system. documentation. They allow for more control and
visibility into your processes, provide alerts on
A document management system (DMS) is an suspicious or non-compliant records, and reduce
automated system that tracks and stores electronic errors through automation of document
documents and/or images of paper documents. The question and answering.1 There are many
DMS can also track different versions of documents benefits to e-signatures but also a fair amount of
modified by different users (history tracking) and risk that will develop with their implementation;
these risks will be covered later in this article.
can either be implemented with an internally hosted
application or outsourced to a cloud-based format.
Regardless of the format, bankers using this technol-
ogy are seeing a drastic decrease in filing cabinets
and an increase in the productivity of the workplace.
In addition, employees are able to easily access
documentation from their workstations or remotely,
making paper shuffling a thing of the past. Financial
institutions will see reduced operating costs through:
• A reduction in administrative and lender labor
• Decreased use of physical folders
• Elimination of travel for loan review
1
• Remote deposit capture — Another way to • Internet banking allows customers to log on to
reduce the paper flow within financial institu- a computer to check their account information.
tions is by using remote deposit capture (RDC). Customers can easily check statements online
This system can greatly reduce the paper flow instead of receiving statements through the
in and out of your institution while also creating mail, reducing paper waste. It also helps the
functionality for your bank and its customers. institution save money by decreasing the
Beyond e-signatures and RDC, you could amount of paper and postage required to
consider offering online account opening, send out paper statements.
maintenance, bill payment, and electronic
statements to prevent even more paper from WHAT ABOUT THE RISKS?
entering or exiting your environment. These Before embarking on any new initiatives for financial
services will not only increase the satisfaction institutions, you and your customers should be
of your customers but also eliminate the need aware of the risks involved:
to print unnecessary information.
• Lack of employee knowledge and
awareness — The first thing your financial
HOW ABOUT THE CUSTOMERS? institution should consider is the training that
Green banking also offers a variety of benefits will be required to make sure all of your
to your customers, resulting in satisfaction and employees are competent in using and
security. Not only are you saving money and providing new or improved services.
providing more services, but you’re also doing • Inadequate information security — Now that
it in a manner that resonates well with your you’re relying more heavily on your information
current and potential green-conscious customers. systems, it’s a good idea to re-evaluate the
Customers will: security that exists on your servers and network.
Furthermore, any existing vendor contracts
• Appreciate the increase in accessibility and
should be reviewed and revised in the best
functionality of their accounts.
interest of safeguarding your data.
• Have a sense of pride in the manner in which • Uninformed customer base — One of the
their financial institution serves them and
largest risks to any electronic banking product
the environment.
is an uninformed customer base. Customers
• Be safer because of the lack of excess physical need to be trained on the importance of using
confidential information lying around — strong passwords to authenticate to Internet
even if they don’t know it. With secure online and mobile banking applications. Customers
banking systems, the possibility of confidential must also be appropriately trained on securing
information being accessed by third parties is any remote deposit capture equipment.
substantially reduced. Across Internet banking, RDC, or e-signatures,
customers must also be aware of the risks
“GREEN SERVICES” ADD TO of using public Wi-Fi or shared computers to
perform these transactions.
CUSTOMER CONVENIENCE
To go hand in hand with the go-green trend, many
HOW CAN WE BE SURE
financial institutions offer a wide variety of “green
OUR CONTROLS ARE EFFECTIVE?
services” such as mobile and Internet banking.
In order to assess your institution’s ability to mitigate
• Mobile banking allows customers the these risks, Plante Moran offers a variety of security
convenience to check bank account assessments that will help you gain an understand-
information, pay bills, and transfer money ing of any gaps in your internal control environment.
right at their fingertips versus driving to
a branch to transfer money or check an • The electronic banking assessment reviews
account balance. the internal control systems associated with
2
the Internet and mobile banking activities, These numbers are so convincing that even a small
including customer authentication to Internet number of institutions taking part in green banking
and mobile banking applications, employee can make a huge impact on the environment.
administrative access control, backup and
recovery, and website content.
HOW ABOUT YOUR INSTITUTION?
• The remote deposit capture reviews cover the Even if the environmental benefits don’t sway you,
adequacy of internal policies, system controls, there’s no denying that social responsibility is good
and customer training required to manage the
for business. By employing the green initiatives
risks of the channel.
discussed in this article, financial institutions can
• In addition, as part of the Gramm Leach Bliley reduce costs, provide more customer service
Act (GLBA) security review, we assess your
options, and increase the bottom line. What
institution’s clean desk policy enforcement and
financial institution can argue with that?
will identify instances of unsecured physical
confidential information. Green banking
centralizes information security responsibilities
and decreases the amount of paper containing
confidential information.
DEMONSTRATING SOCIAL RESPONSIBILITY
BY PROTECTING THE ENVIRONMENT
Not only do financial institutions and customers
benefit from green banking, but so does the
environment. The amount of paper used by financial
institutions represents a significant percentage of
paper use. In one year, by switching from paper to
electronic delivery, an average household would:
• Save 6 pounds of paper
• Save 23 pounds of wood
• Prevent producing 29 pounds of
greenhouse gases
– Saving this amount of greenhouse gas
is the equivalent of:
The emissions avoided by not driving
30 miles
The emissions avoided by not consuming
2 gallons of gasoline
Planting 0.4 tree seedlings and allowing
them to grow for 10 years2
If only 20 percent of American households switched
from paper to electronic bills, statements, and
payments each year, the collective impact would
save 147 million pounds of paper and 543 million
pounds of wood.
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ROBERT FUNKE 847.628.8831 JENNY TROTTA 248.223.3616
robert.funke@plantemoran.com jenny.trotta@plantemoran.com
COLIN TAGGART 248.223.3235 KYLE MILLER 248.223.3425
colin.taggart@plantemoran.com kyle.miller@plantemoran.com
REFERENCES
http://www.payitgreen.org/business/whyPayItGreen.aspx
http://blog.firstnational.com/blg/html/en/2010/april/cust_041910_gogreen.html
FOOTNOTES
1.
http://www.cocc.com/paperless-banking.html
2.
http://www.banknews.com/Single-News-Page.51.0.html?&no_cache=1&tx_ttnews[tt_news]=16374&tx_ttne
ws[backPid]=978&cHash=041409e205
4
By employing the green
initiatives discussed in
this article, financial
institutions can
reduce costs, provide
more customer service
options, and increase
the bottom line.
5
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