Making green while going green - A changing world for financial institutions.

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Making green while going green - A changing world for financial institutions.
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                  {Making green
                         while going green.}
                   A changing world for financial institutions.
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.
{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

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Making green while going green - A changing world for financial institutions.
•   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

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Making green while going green - A changing world for financial institutions.
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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Making green while going green - A changing world for financial institutions.
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
Making green while going green - A changing world for financial institutions.
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
Making green while going green - A changing world for financial institutions.
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