Document Management is a process used to capture, systematically store, track, and access electronic documents. The documents could be PDFs, Word files, Excel files, PPTs, images, email correspondence, or any suitable format. It can also store scanned copies of paper-based content. They usually are stored randomly in folders in Cloud or on your laptop. Let us ignore the storage of essential documents on laptops because this is resorted to by very few people since the laptop disk device could crash at any point in time. You could also store documents on Cloud (say Google Drive) without necessarily using designated Document Management Software. Here, also, you are provided the feature of searching based on keywords or the names of the documents. You could create multiple folders, including nested folders. However, Document Management Software has inherent advantages over software like Google Drive, as discussed below.
Let us first illustrate this with an example. You go for an annual medical checkup and visit a doctor when you are ill, and he prescribes specific tests. Multiple reports are presented to you – blood, ECG, TMT, urine, etc. – and medicines are prescribed.
A Document Management System would help store the reports, X-Ray images, etc., in one place – year after year – in one location and help you to access them if required at any point in time quickly.
What is Financial Document Management System?
There are additional constraints in storing financial documents – legal compliance and financial loss. Financial Document Management requires additional features like capturing, storing financial records, disposing of them, accessing them, sharing, and maintaining proper audit trails. Moreover, if any document has been deleted by mistake or maliciously, it could cause immense grief and should be prevented.
Also, annual audits require seamless access to the documents by auditors, which is also rendered possible if you have employed a Document Management System. The challenge is more acute in the case of financial firms like banks, NBFCs, stock brokers, or insurance companies. Loss of or tampering with a single document can cause total loss of face.
Financial Document Management systems necessarily have the following features:
Collection and storage of documents. You should be able to store the document in the DMS immediately from an email or after creating a Word or Excel File.
Extra Security prevents unauthorized access and warning systems that highlight breaches immediately. Ensure Security to ensure accidental deletion does not take place or documents are not corrupted due to power fluctuations, etc. Backups must be strictly maintained, and restoration ensured if such an eventuality occurs. Specific Financial Document Management Systems are even capable of preventing unauthorized printing, downloading, screenshots, and mailing of documents to others unless authorized. You should be able to close all edits on multiple documents with the stroke of a button.
Data retention and archival are in line with statutory requirements. Certain types of data must be stored for a certain number of years. This has to be ensured. Lifecycle control is more efficient in Financial DMS systems. It has the feature of adding expiry and renewal dates for each document.
You could set up workflows to approve certain financial transactions (like a loan application or an insurance policy) where the sanctioning authority has seamless access to the relevant documents before approval. This helps automate and thereby accelerate business processes through efficient, rules-based workflows. Work-flow modules are inherent to all designated Document Management Systems. For example, one can seek approval for an Invoice from a vendor, which would pass through all the sanctioning authorities. Since the authorities would like to view the relevant documents before signing off, the document should also be viewable through a link to the storage space. Insurance policies above a certain amount may need to be authorized by A, whereas B. Tasks authorize those below that amount need to be assigned immediately to the appropriate authority. It would also help track bottlenecks and identify individuals who delayed the process.
Sharing documents with other team members concomitantly ensures that all changes are immediately highlighted.
Digital streamlining: Financial businesses generate a constant stream of paperwork. Take the example of an NBFC. When a customer submits a loan application, his credit score, like CIBIL score, is checked, his bank accounts, credit card accounts, other loans availed of, salary slip verified, his identity checked (AADHAAR and PAN Cards), his loan eligibility and interest rates derived. However, this must be approved by multiple layers within the organization. If approved, the customer has to be informed through an email, and finally, he has to accept the terms and conditions, including interest rates. Therefore, the workflows not only have inbuilt but also have interfaces with mailing or other communication systems built in, documents properly stored with dates, details of approvals, and correspondence with the customer – all stored at one location so that it can easily be retrieved in future if the need arises or the customer defaults. Also, the subsequent payment details by the customer need to be stored for records. The above will be indexed on a unique key (say, the customer’s mobile number or an ID generated when disbursing the 1st installment.)
Varied formats: There are emails, images of the Aadhaar card, PAN Card, bank statements, etc. All of these could be in unique formats. Financial DMS will ensure that diverse formats are recognized.
Direct compliance with legal requirements: Each workflow can be designed to be aligned to legal requirements and a direct relationship set up with the same inside the system.
Integration with internal systems is even more critical in the case of financial systems, as transactions have to be pushed and pulled from them into the DMS. Most DMSs are integrated with SAP, Oracle, and other Financial ERP systems. They should be able to provide a peek into the documents while auditing the workflows and controls inside the Business Management Software.
Cybersecurity: Many Financial DMSs these days come with in-built Cybersecurity features to prevent hacking, not allowing certain file types deemed to be used as tools for malware, multi-factor authentication to ensure that the identities are double-checked (e.g., both password and OTPs), extra layers of encryption, etc.
Advanced versioning: If a document has been altered four times, each version will be retained for reference or reversal to an older version if the situation so demands. Google Drive has recently provided a version history, but it needs to meet requirements. It allows users to view as well as restore a prior version. However, it has also opened a floodgate of possible errors or misdemeanors. An older version could be restored accidentally or intentionally by an authorized person with access rights. A Document Management System allows the Administrator to lock down the latest version, thereby not permitting such a situation. You can imagine the rework and confusion if an old software version or a design is restored.
Audit trails: Auditors often like to view the trials of a document, i.e., what changes were made, by whom (was he authorized?), when, and why. Such trials are easily incorporated into Document Management Systems.
Create customized Metadata for your documents so that documents can be related to one another.
The Top 5 Financial DMS
- Connectteam – Unlimited documents can be uploaded of all types, including images and videos; you can structure unstructured content, contextualize and customize them, and enable collaboration and sharing. It has workflow facilities with scope for reminders and notifications, confirmation that an employee has read a document, records of access to documents, etc.
- Box – Intuitive user interface, multi-device accessibility, shared links, version history, scope to annotate and comment on documents, tight integration with software like -Suite, Salesforce, Office 365, etc., efficient management of the document life-cycle, automatic compliance with declared policies and other statutory obligations, data retention, user permissions, locking files, folder controls, audit trail.
- Daffodil – Easy-to-use team and content management settings, recovery of files accidentally deleted up to 180 days, external content controls and reporting by integrating with external software, unlimited users, direct intelligence with Business intelligence, document distribution for review & approval cycle, user auditing system, eRoom facilities for clustering all documents about a meeting in one place, etc.
- Docuware – Demand-based storage systems, Archiving & Retention policies, Customizable access controls, Integration with ERPs & CRMs, collaborating within teams, intelligent indexing to ensure quick retrieval, Version Management, Mobile versions, Full-text Search, the transformation of documents from one format to another, encryption, Workflow Manager, secure archiving, ensures document integrity, user-friendly, integrated with a range of software like MS-Office, SAP, Oracle, MS Outlook, Gmail, etc.
- Microsoft 365 – creates all documents in OneDrive, allows commenting and annotating on documents, sharing and collaborating documents, incorporating expiry dates, supports various file formats, allows check-in and checkout for locking files, allows documents to be linked through metadata, etc.