How can Russian banks improve their efficiency by optimizing the depositories and records management?

10 March, 2014 OSG is pleased to announce a new contract has been signed with Nordea Bank for the secure and eco-friendly program of waste paper disposal in their network of offices in Russia. Nordea Bank is part of the giant Nordea banking group. Their network of 1000 branches serve more than 11 million customers. In Russia since 1994, they are amongst the top 230 banks in terms of assets and capital. Their clients include in excess of 5000 companies and more than 60,000 individuals.

As of May 1st, 2013 there were 895 operating banks in the Russian Federation (reported by the Central Bank of the Russian Federation). Among them is the Sberbank of Russia (www.sberbank.ru) — the largest credit institution in Russia and the CIS, which accounts for 27% of the aggregate Russian banking assets and 26% of the bank capital.

Dynamics of growth in banking is now measured by the quality and quantity of services provided and proliferation of major bank branches. As of April 1st, 2013 the total number of bank branches throughout Russia was 46,712 (compared with 42,221 on October 1st, 2010, reported by the Central Bank of the Russian Federation). For example, Sberbank of Russia OJSC has the most extensive network of branches in the country. Its structure includes 17 regional head offices and over 18,000 units.

With this volume of tasks, increasing number of services provided and extensive base of customers, the banks face the need to implement records management and storage solutions to handle a huge number of documents. The archive documents storage requires professional services both in batch documents scanning including remote scanning as well as in records digitizing with their potential use in a digital form within e-Archive, a unified electronic archive system.

Bank records management

In December 2011, Sberbank — for the first time — signed an agreement with a third-party company related to document processing and storage. Sberbank selected OSG Records Management as a partner. According to Alexander Pylev, vice president of the West Ural Sberbank, "it is the first time when Sberbank has decided to outsource archive documents storage." OSG Records Management experience in archive-keeping will help us improve our records management practice. As a result, we will be able to give more attention to the development of banking products and services."

Types of stored bank accounting and control records

  • Accounting records are defined by a unique reference date (for example, checks, checking deposits or payments)
  • Departmental reports are bank documents that are created by the bank departments and vary in the record date types. After archiving the documents, only standardized documents are placed in the containers (for example, only the "fixed asset card files for 1991" documents can be stored in the container).
  • Credit records or debt folders.
  • Securities portfolio and liabilities documents. Accounting of securities trading transactions is rather complicated — the trades are settled in multiple stages, each involves a change to the securities status, and every stage can affect the financial result of the transaction. The need for internal operating balance and a set of reports for decision support reflects the task of archiving the documents related to the portfolio.
  • Reports for external use, in particular, an audit report (based on the management accounting data).

Archived credit records

The archived credit records are kept in special depositories. Due to confidential nature of such documents they are particularly important. Therefore, usually they are placed in a separate room under the responsibility of the credit department. Moreover, they are often stored in the individual folders (under the customer name) and classified by date of destruction (10 years from the loan period expiration date).

Why do you need to store all the obsolete documents?

First, from a historical point of view, a tradition to have all sorts of special storages in Russia is firmly rooted. But the main reason for a long-term document storage is legislative requirements. In fact, the law requires documents to be safeguarded much longer than the "retention period". This period may last up to 10 years, for example. In addition, this period is of particular importance in terms of the Civil Code, which requires a written document as a proof. As an example, one bank has lost tens of millions of French francs only because it was not able to locate the original loan guarantee!

How do computerized archive management improves efficiency?

Retrospective conversion is a process of paper documents digitizing (scanning) in order to create e-Archives (electronic archives) with a huge amount of data. OSG Records Management scans the documents and transfers them to e-Archive, while the original documents are kept in special storages in accordance with the law. OSG Records Management is the only company that provides a full range of archival services throughout Russia.

Computerized archive management solutions provide greater speed, clarity and transparency of the process. A state-of-art electronic archive system helps improve records management and make the document search faster. Reduced waiting time and, consequently, improved quality of service is highly appreciated by customers.

Creating an electronic archive also motivates the staff. Digitizing the documents increases the archive efficiency. Employees receiving a copy of the document by e-mail in a few minutes after the request will appreciate the new opportunities of the archive management system.

The review of requests sent to the unified electronic archive system can potentially identify operational errors, because the requests can be analyzed in more detail. For example, before the electronic archive system implementation, an agency dealt with the same complaint related to an issue thing every six months. Once the e-Archive has been implemented, the department responsible for processing such complaints will receive them every week, which means the error root cause can be identified more quickly.

When an electronic archive (e-Archive) becomes an urgent requirement

The need for the electronic archive system implementation occurs when the archive space becomes limited, while the boxes with archive documents continue to arrive. This also holds true for the company with the staff not adequately qualified to manage the rather complex depositary system. Or what is worse — customers have to wait too long, and the bank's image suffers from a low service quality. Another example relates to a merger, when the distance between subsidiaries makes the storage management coordination difficult.

So why not transfer all the documents into a digital format? (Retrospective Conversion)

Digitizing of data is a tempting solution. In reality, however, digitizing involves a lot of work, while the data retrieval may be needed rarely. The need for batch scanning, multi-page documents scanning and millions of documents digitizing is justified if the number of data retrieval requests exceeds three requests per every thousand of archived documents.

At the same time, who would assume responsibility for the original documents destruction after their digitizing, considering the legislative requirements on their deposit?

How competent should be the company responsible for the computer automation of the management?

The company responsible for management automation should know how all the aspects of archive management and modern computer technology. This includes records scanning services as well as retrospective conversion (digitization) and batch scanning.

Who has this unique know-how?

Such technologies are available to professional records management companies. OSG Records Management is the largest company in Russia in this area of expertise. Check out our Power Point presentation to know how 15 years of operation in the Russian market made us the leaders in development of records management solutions for the banking industry, and find out more about our well-established infrastructure. No wonder that OSG Records Management won the tender for the provision of credit records and accounting records storage services for the joint-stock commercial bank Rosbank (www.rosbank.ru). In accordance with the signed agreement, OSG Records Management will ensure records storage for the West Siberian Directorate of Rosbank. All the documents will be transferred to OSG's storage centre in Novosibirsk. The warehouse is Class "A", and has an area of over 2000 m².

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