Online statements, phone payments and banking apps - as consumers, we're well acquainted with the paperless revolution, but it's a different story in the corporate landscape.
However, the corporate banking sector is undergoing a rapid change, with organisations becoming more open to the myriad of benefits digital offers. A 2016 study by TD Bank in the USA found that only 17% of corporate clients had paperless documents today, but 69% expected to transition to electronic payments in the near future.
Aside from the obvious environmental advantages (it's estimated that in the UK alone, banking customers receive nearly 40,000 tons of paper from banks each year - 6,200 times the height of the Shard in London if stacked), research by AIIM Market Intelligence has found that banking productivity improves by 39% when paper forms are replaced by electronic versions and workflows are digitised and streamlined. By eliminating paper, businesses can improve staff productivity and customer response time.
Yet despite this knowledge, both companies and banks have been dragging their feet when it comes to digital.
"The majority of respondents said they expect the implementation of electronic invoicing systems to save their company a significant amount of time," agrees TD Bank's Corporate Communications Manager Martha Gaston, "so why aren't all organisations migrating to paperless processes?"
Historically, there have been a number of reasons: corporate inertia, resistance to change, lengthy transition times, antiquated company infrastructure, a greater sense of risk, expensive IT requirements, and trimmed HR resources on the client side; sluggish innovation, incompatible systems and further inertia at the banks.
Previous challenges hamper progress"The gap between the bank and the corporate treasury environment has widened over recent years, partly because of the sheer scale of regulation affecting banks," says Ashley Dowson, Chairman of Intraday Insights. "They're having to focus on internal processes so the corporate side, particularly around treasury, has taken a secondary position."
Meanwhile, corporate treasuries have been managing with scaled-back teams in tougher economic conditions. "They have cut back on resources considerably, and as a result, have insufficient resources to deploy on thinking about smart systems, the use of technology to save them time," adds Dowson.
Those that have attempted to digitise have encountered practical issues with the technology available, particularly with multi-banking, as software and paper policies differ from bank to bank. "There's inconsistency between banks about making digital records available to use," explains Stephen Baseby, Associate Policy & Technical Director at the Association of Corporate Treasurers (ACT), "even though we know that banks are digitising forms as standard."
"Bank technology and practices remain fragmented and variable in terms of quality and consistency," continues Lesley Flowerdew, Group Tax and Treasury Director at Atkins. "We need our banking partners to match our agility and our global strategy. Interaction of regulatory pressures, declining bank margins and bank spend on technology feels like a growing challenge from a bank's perspective, putting them several steps behind our own pace."
Businesses see the benefitsDespite the challenges inherent in early technology, corporate treasurers - particularly those in North America and UK - are increasingly turning to digital processes, driven by customer demand and obvious efficiencies. Information can be more easily accessed and analysed. Financial controls can be tightened up. Workflows and teams are streamlined, services more agile. There's less and less need for costly paperwork warehousing.
"In the last 18 months to two years I have noticed banks starting to engage with electronic processes," says Dowson. "There is a growing awareness from treasury that many of the banks offer sophisticated, real-time digital services that are more attractive, and the previous prevalence of paper-based processes are no longer suiting their purpose."
As confidence in digital processes improves, companies are slowly beginning to replace legacy systems or overlay them with virtual accounts that expose the data electronically. "Remote capture, auto-classification, and automated processes are the most popular directions," says Bob Larrivee, Vice President and Chief Analyst at AIIM. "Aside from greater consistency, there are lowered costs and less chance of error. This means improved customer engagement, improved accuracy, and enhanced efficiency."
The system isn't perfect yet, but digital transformation is the mantra of the moment, and it starts with going paperless.