document retention

Document Retention and Your Financial Institution: What’s the Best Strategy for Managing Paper Documents After Imaging?

Document imaging technology is a key component to an enterprise content and information management (ECM / EIM) strategy, enabling multiple efficiencies for your bank or credit union. For starters, digitized documents are typically more accessible and enable faster reporting than paper files, allowing staff to do their jobs quicker with less frustration, and to deliver better customer and member services.

Once imaged, electronic files can be easily backed up to a server, reducing the risk of information loss of the physical document. Similarly, a virtually limitless number of electronic documents can alternatively be stored in the cloud, allowing scalability and accessibility with built-in security and compliance protocols. However, the same is not true when archiving paper documents in physical form, which costs more in overhead to manage, lends itself to risk and compliance concerns, and takes up physical space in record rooms, vaults, or offsite storage facilities.

Despite the many advantages, implementing a document imaging system can lead to new questions for a financial institution. One common question is:

What should we do with the hard copy documents after imaging, and for how long should we retain the files?

On the one hand, managing two versions of the same document – the paper and digital copies - can result in higher costs and negatively impact productivity. On the other hand, shredding too early could pose a variety of risks.

This article shares thoughts for aligning your document management practices with your financial institution’s document retention policy – all of which should be in sync with your data governance policy and information management strategy. 

Managing Paper Files After Imaging: 3 Examples

Alogent’s enterprise content and information management (ECM / EIM) suite of solutions offers built-in purge capabilities that are customizable based on your institution’s document retention policy by document-type. Although there’s no one-size-fits-all solution, we’ve seen financial institutions take several approaches for managing paper documents after imaging.

Here are three scenarios to discuss with your compliance and data governance teams:

1. Shredding immediately after imaging.

Perhaps the most aggressive approach, the financial institution destroys paper versions as documents are scanned and indexed into the document management system. Exceptions include any documents that must be retained in hard copy format based on your institution’s internal guidelines, such as promissory notes or vehicle titles.

2. Shredding after a waiting period.

A more conservative option involves retaining paper versions until a predefined amount of time has passed, as defined by your data governance policy. Sometimes this waiting period can be a few weeks, a few months, or a defined number of years. As with the previous example, documents that must be retained in paper format should be exempt from this process.

3. Shredding after quality control (QC).

Ensuring proper quality control is a key step for avoiding scanning errors, missing signatures, upside down pages, and illegible information. An effective document imaging QC program, paired with your data governance policy, can mitigate risk, while serving as a helpful reminder to discard paper that is no longer needed or required to retain. 

Up Next, Purging Electronic Images

Implementing the right document imaging system can help you achieve an efficient workflow that aligns with your financial institution’s document retention policy, as well as speed search, retrieval and reporting with electronic information. Stay tuned for our upcoming blog post that will explore purging electronic images.

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This article is for informational purposes only and is not to be taken as guidance or advice for your institution. Seek appropriate legal and compliance counsel before making decisions about retention.