A new study has identified three hurdles standing in the way of potential £1.3bn annual cost savings for the UK's financial industry, if it were going paperless
If financial firms in the UK and 80% of their customers were to go paperless, they could earn the industry cost savings of up £1.3bn annually – and provide huge environmental benefits – according to a new survey.
Multinational professional services firm EY’s findings showed just 28% of UK financial services customers go about their business without using paper, despite the increasing digitisation of the world.
More than 5.2 billion paper documents – the equivalent of 2.4 million trees – were estimated to have been sent by the industry in 2017 alone, with the retail banking sector accounting for the lion’s share as it created 4.2 billion documents.
Amit Thaker, head of financial services at EY in the UK’s Midlands, said: “It may come as a surprise to many that financial firms are still some way off from being fully digital, despite the widespread use of apps and online banking.
“Becoming fully paperless though is not as simple as clicking a few buttons – there’s still a number of hurdles that need to be overcome both from a firm and customer perspective.
“Considering the cost savings available, the positive impact it would have on the environment and the potential to improve customer interaction, it should be a key focus.”
Going paperless cost savings obstructed by multiple barriers
EY’s research highlights three hurdles in the way of the UK financial services industry reaping the benefits of going paperless.
- Organisations within the sector need to upgrade their existing legacy systems, which are reliant on producing paper, and invest in fully digital experience that will reduce long term costs in addition to improving the customer experience.
- They have to contend with the remaining customer demand for paper, as 72% still receive printed documents even if they use a banking app or online banking as well.
- A large proportion of regulation-related documents are still often sent using paper, with 38% of them being physical copies last year.
Authorities are investigating ways of digitising this process more completely, however.
Mr Thaker added: “Firms can do a lot more to help customers in this move to digital – it’s not just about putting the same pdf document on an app, it’s about re-imagining content and designing information which is more engaging for customers.
“As for regulation, while new rules require firms to become more transparent, it doesn’t have to mean sending more paper.
“Closer collaboration between the industry and regulators is needed to agree what firms need to do and how best to do it in this new digital world.”