The Transformation of Banking: Taking on Fintech with Document Automation

Document Assembly, Document Automation, Document Creation, Document Generation

It’s no secret that the financial services market is changing rapidly. No longer do traditional banks hold all the advantages in driving financial services opportunities and availability. New fintech startups and emerging technologies are gaining traction and challenging banks to be more innovative to retain market share and revenue.

Consider these key trends disrupting traditional financial services over the past 3-5 years:

  1. The rise of digital technology is enabling non-banking entities to meet customers’ efficiency and convenience demands through services such as online mortgages.
  2. The introduction of blockchain technology in the payments space looks to facilitate faster payments at lower fees than banks. Distributed ledgers promise to reduce operational costs, enabling real-time transactions between organizations without participation by a traditional bank.
  3. The younger population of banking consumers is demanding more transparency and instant communication in banking. Fintech companies are cultivating increased competition using advanced technology like automation, mobile banking, and chatbots, making personal finance more comfortable for the generation raised on screens and mobile devices.

To navigate these and other disruptions in financial services, banks and credit unions must embrace technology to become more responsive to customer expectations while reducing risk and cost. One such solution is HotDocs: a proven service for automating the creation and management of documents in consumer lending, mortgage processing, statements, loan agreements, tax, pension, and financial planning documents. 

To meet changing customer demands in today’s environment, banks must be agile and adaptive. Automating the right processes allows banks to create a strong, stable and consistent workflow that will allow them to move confidently toward the new future of banking. Banks and credit unions of all sizes are embracing document automation, and there are four big reasons why: efficiency, risk reduction, compliance, and quality.

Maximize Efficiency

For many banks, the process of generating transactional documentation is inefficient and overly expensive. Much of this inefficiency can be attributed to non-standardized processes that involve manual and repetitive tasks. In document creation, this may be a process involving Word templates, merge fields, and an occasional coded application.

Automating the generation of transactional documents is the most cost-effective type of business process improvement because it is a low-cost, low-effort solution that dramatically increases efficiency. Many banks report reducing the time necessary for generating loan documentation from days to hours or, in some cases, minutes. 

A manager at a large global bank using HotDocs reported recently that his department could previously create three MSA agreements in a day. Once HotDocs was implemented, automation enabled them to complete 20 such agreements in a day – a 650% increase in efficiency. 

When the task gets automated, employees have more time to focus on higher-value work. This increased efficiency has considerable benefits to the company’s capacity to take on more work without needing to work longer hours.

Reduce Risk

Bank errors occasionally make the news, when, for example, a loan officer manually enters a figure with too many zeroes, causing excessive funds to be deposited in a customer account. Automation again stacks up better with the ability to reduce the risk of this type of expensive internal error.

When processing commercial loans, there are millions of dollars on the line. Banks often apply stringent approval standards to mitigate errors and risks. These standards include comparing and analyzing data for consistency. Built on the HotDocs platform, the Expert Loan tool is an analytical, data-gathering sequence that provides analysis of data sets. Expert Loan is specifically designed to flag potential problem areas with applicants that a loan officer might miss. 

Learn more about the HotDocs Expert Loan Tool

Using the Expert Loan interview, lending professionals can color-code answers to flag potential inconsistencies. For example, an answer that is consistent with guidelines will be coded green, while an answer that is inconsistent will be coded in red. Should a loan be recommended to an approval officer with red answers, the customer representative can provide an explanation of why the loan should be approved, despite inconsistencies. HotDocs’ analytics tool allows the bank to prevent errors that could yield financial consequences. 

Ensure Regulatory Compliance

Banks and financial organizations are among the world’s most heavily regulated business sectors. Banks are targets for cybercriminals seeking the sensitive information stored within these organizations. Awareness of rising threats and an ever-growing set of regulations keep compliance top of mind for banks and credit unions.

Cybersecurity and data privacy regulations aim to protect sensitive client information. For example, payment card industry standards (PCI DSS) were designed to reduce fraud and protect cardholder data as businesses are storing, processing and transmitting that data. The Sarbanes-Oxley Act. SOX law establishes requirements for the secure storage and management of corporate-facing electronic financial records, including the monitoring, logging, and auditing of certain activities. To further complicate the compliance challenge, these and similar financial industry regulations change on a regular basis.

How much is compliance costing your organization? Download the Banking Compliance Factsheet.

When a compliance regulation change is made, a bank must update its processes accordingly, which includes documentation. This involves editing existing documents, removing or adding clauses, checking that the information conveyed in the document is easy to digest and ensuring all staff have access to the new documentation. This can be extremely time-consuming and fraught with human error. 

With HotDocs, banks and financial organizations can make changes and update their documents instantly, allowing a bank to ensure documents are compliant. HotDocs is designed to make certain that documents are accurate and comply with the latest legislation from financial regulators, allowing banks to update document templates easily. 

Automating the loan-generation process can reduce – and probably eliminate – noncompliance.

Relationship managers, loan officers and clerical workers are all channeled into the same standardized process, resulting in greater efficiency with lower risk.


In document creation and data management, quality stems from accuracy and consistency. Document control governs the creation, storage, security and organization of documents managed by a bank. Quality control involves preparing the correct documents, obtaining signatures from the right people, providing the proper disclosures at the appropriate time and maintaining accurate documentation.

Document automation eliminates the need for double entry of customer information, which usually takes up a considerable amount of time and creates room for mistakes. HotDocs’ document control software is the technology designed to maintain document organization and quality, while reducing the risk of human error. 

Bonus: Improved Customer Response

At the end of the day, document automation allows bankers to better serve their customers, thereby retaining and growing their business.  For example, a typical loan approval process involves several stages, such as customer management, credit analysis, presentation, approval, and portfolio risk management. All these processes involve many documents and are time intensive. 

In a commercial bank, due to increasing pressure from competitors, as well as from clients, this process is sometimes rushed, thereby increasing the chance of errors. Automating the process right from the beginning makes it a smooth procedure with no errors, and loans can be approved within minutes. Banks can serve clients remotely and customers will be more satisfied carrying out such transactions on mobile devices.


Banks and credit unions can transform document creation into a standardized process application with accurate and complete business logic. The result is a highly interactive, structured data-gathering workflow that virtually eliminates human error, saving time and labor costs and significantly reducing legal exposure. In these uncertain times for traditional banking, document automation is one way for traditional banks to remain competitively positioned as they seek to adapt and thrive in the fast-changing fintech market. 

Are you ready to explore document automation for your bank?  

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