July 29, 2025
With the exception of cybersecurity, the single best tech investment most financial institutions should make is a document management system.
In this blog, we’ll explore exactly why, with real-world examples of how one bank was able to transform all sorts of time-consuming administrative tasks into a significant competitive advantage. But if this blog caught your eye, we should start by exploring what exactly a document management system is, and the age-old problems it can solve for financial organizations.
What Is a Document Management System (DMS)?
At a basic level, a DMS is a digital system that does for organizations what a librarian and a cataloging system do for a library — it helps organizations store, retrieve, and track documents within their system.
However, a DMS system goes a step further by helping you streamline document-related processes (like a complicated approval process), so your staff can work smarter.
The Top Challenges Paper-Based Processes and Traditional Filing Systems Cause for Banks
Don’t yet have a document management system (DMS)? You may experience some of these frustrations:
Compliance Is Harder Than It Needs To Be
Financial institutions have to follow incredibly strict rules about record-keeping and need to produce documents quickly during audits. Unfortunately, when everything is scattered across filing cabinets and random computer folders, it becomes a nightmare to find what regulators need.
Your Wait Times Are Too Long
Loan applications that should move quickly can get stuck for silly reasons, like someone isn’t able to find the required paperwork because it’s on someone else’s desk, under other paperwork.
Sensitive Documents Aren’t Secure
When sensitive financial information is sitting in unlocked filing cabinets or saved in unsecured folders on various computers, the risk of data breaches increases dramatically. Banks are prime targets for cybercriminals, and poor document organization makes their job much easier.
Workflows Are Inefficient and Confusing
Is your staff spending way too much time just looking for things instead of actually helping customers or working on important tasks?
Financial institutions that haven’t moved to a document management system will often have the same document stored in three different places, with nobody sure which version is the most current.
Onboarding Is Frustrating and Takes Forever
Manual processes take some time to learn. If they’re clunky and have tons of exceptions to them, that can be frustrating and lead to a really rough first few weeks.
A bad onboarding process is often a blind spot for decision-makers who have been at the same place for a long time. But providing a gentle learning curve for new hires pays off for everyone.
Here are some recent stats:
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20% of employees quit within their first 45 days
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69% of employees who have a great onboarding experience are likely to stick around for at least 3 years
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A good onboarding experience results in 18 times more dedication to the employer
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An effective onboarding journey results in a revenue growth of 2.5x
In an Emergency, Critical Records Could Be Lost
If your office were to experience a fire, flood, or other natural disaster, if you’re still relying heavily on paper-based processes, years of valuable business records could be lost forever.
The bottom line? Your staff ends up working much harder than they need to, all while providing a less satisfactory experience for their customers.
But here's the thing — it doesn't have to be this way. And the solution isn’t that complicated.
One Bank’s Results After Adopting Document Management System Software
A client of ours, Stearns Bank, is based in St. Cloud, Minnesota. They have locations in other states across the country, each of which was dealing with the same document issues.
Every department was doing their own thing. Files were scattered everywhere. The same document would exist in three different places, and nobody could find the right version when they needed it. Their loan officers were spending more time playing document detective than actually helping customers.
Then they decided to do something about it.
The Results
The bank started with its loan department, arguably the most document-heavy operation in any financial institution. It implemented a centralized document management system that could talk to its existing core banking software, because who has time to rip and replace everything?
The results were pretty incredible:
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Loan processing went from weeks to days — and sometimes just hours
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Documents that used to get printed, signed, scanned, and re-scanned 4 different times now live in 1 place, accessible to everyone who needs them
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Customers started getting loan approvals faster than they'd ever experienced
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The bank was able to save money on paper storage
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Documents stopped getting lost in the shuffle
12 Document Management System Benefits for Financial Institutions
The results you can expect to get from investing in a DMS depend on how you currently work, the problems you’re trying to solve, and the system you end up using. However, here’s what’s on the table.
1. Save Time and Money
Managing paper files is time-consuming and expensive. Just how time-consuming? Well, the average knowledge worker spends about 2.5 hours per day — roughly 30% of the workday — searching for information.
With a document management system, employees can search by keywords or phrases and find what they need in seconds. Plus, you'll dramatically reduce costs on printing, copying, and maintaining physical equipment.
2. Meet Regulatory Requirements With Confidence
Staying compliant with industry regulations doesn't have to be a constant source of stress. A good document management system automatically organizes and secures files according to compliance standards. You'll have proper audit trails, retention schedules, and the ability to quickly produce documents during examinations — no scrambling required.
3. Free Up Valuable Office Space
At the average office that hasn’t gone paperless, 50%-70% of office space is used for document storage. That’s a huge chunk of your rent that’s going towards paper. When you move to a digital system, you can free up that space for more productive uses.
4. Protect Your Business from Disasters
Disaster recovery stats aren’t good — 40% of organizations don’t reopen after a disaster, and 25% more fail the same year.
When you rely on paper-based processes and on-premises solutions, a single fire, flood, or other natural disaster can put you out of business. Implementing a DMS is a cost-effective way to reduce risk and increase your resilience.
5. Improve Collaboration and Productivity
Better collaboration is one of those concepts that is sometimes difficult to assign a specific value to, and that can mean that “numbers people” don’t always prioritize it.
So here are a few recent stats that paint a decent picture of how collaboration — and tools that foster better collaboration — are linked to ROI:
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73% of employees do better work when collaborating
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Business leaders see 30% higher productivity in collaborative workplaces
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Good teamwork leads to 21% higher profitability
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Online collaboration tools scale up productivity by 30%
DMS tools allow team members to share files, collaborate in real time, work together from anywhere, and stay updated on document status without the usual back-and-forth.
6. Enhance Security and Access Control
A DMS will let you control exactly who can view, edit, or share specific documents. You can also track who accessed what and when, which is crucial for maintaining security and compliance. And, unlike physical files that anyone can grab from a filing cabinet, your new system will provide detailed access logs and permissions.
7. Eliminate Version Control Headaches
We've all been there. You’re working on what you think is the latest version of a document, only to find that someone else was editing a different version.
Turns out, it’s a pretty big problem, and there are some eye-opening stats to back that up:
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90% of businesses said they experienced document versioning issues in their workflows
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59% of knowledge workers said they have to wait while a colleague finishes work on a version of a document they’d like to access
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47% of employees have worked on a document only to realize that they were working on the wrong or outdated version
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73% of workers admitted to losing a lot of time searching for the most correct or up-to-date version of a file
8. Streamline Workflows and Reduce App Switching
The average knowledge worker uses 11 different apps just to do their job. Tool sprawl can be expensive, and it can also reduce efficiency.
A DMS will serve as a single repository, so employees can quickly find files, see how recent they are, and share them with colleagues. Constantly having to switch from app to app results in missed communication, missed deadlines, repeated work, and workers being less efficient.
9. Enable Remote Work and Mobile Access
Even if enabling hybrid or remote work isn’t a priority for your workplace, physical documents can only be in one place at a time, which creates bottlenecks and limits flexibility.
Digital document management allows authorized team members to access files from desktops, laptops, or mobile devices, whether they're in the office, home with a sick child, or in the middle of an important client meeting.
10. Reduce Errors With Standardized Templates
Creating documents from scratch every time isn't just inefficient. It increases the risk of errors and omissions that can damage customer relationships and lead to compliance violations. Document management systems make it easy to create and use standardized templates that ensure consistency and accuracy.
11. Support Growth
As your business grows, so do your document management needs. A top-rated DMS can scale along with you, so you won’t outgrow it or need to start over as you add clients and locations.
12. Use AI Securely and Strategically
Many top-rated DMS tools, including M-Files, have added AI features. Here’s a brief list of what M-Files’ assistant, Aino, can do:
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Summarize a document, regardless of the language
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Translate the summary into another language
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Find answers from a document, regardless of the language
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Save the summaries and answers as metadata
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Find answers from anywhere in a vault
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Find answers related to your current context, like within a search, or within a view, or related to a business object
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Perform math and calendar operations, like calculating dates
Ready To Stop Fighting With Your Documents?
The transformation that worked for Stearns Bank isn't some unicorn success story — it's a playbook that can work for your institution too. The key is finding the right partner who understands both the technology and the unique challenges of banking. And what’s even better than that is finding a partner that can get you an insider deal and help you make the most of your new system with a ready-to-go library of automated processes you can pull from.
Want to see what this could look like for your bank? Let's have a conversation. No sales pitch, no pressure — just an honest discussion about your document challenges and whether or not moving to M-Files (or a different platform) would make sense for you.
Because honestly? Life's too short to spend hours hunting for the right version of a loan document.
