"The Documentation Dilemma" Report Digs Into Real Cost of Compliance and Need for Faster AI Adoption For Small to Mid-Sized Banks, Credit Unions
AUSTIN, Texas, July 24, 2024 /PRNewswire-PRWeb/ -- New research commissioned by Hapax, an unprecedented AI for the financial services industry, found that bank employees spend 20% of their workweek searching for and managing documents to ensure adherence to regulatory requirements and internal policies.
The report, titled "The Documentation Dilemma," reveals that the significant amount of lost time is not only detrimental to the bottom line but also undermines the core objectives of small to mid-sized banks and credit unions. Specifically, 62% of respondents indicated that this lost time impedes their capacity to serve the community and cultivate stronger customer relationships.
"Say a bank employee makes $40 an hour, and 8 hours each week is spent just tracking down information needed to do their job accurately, which comes out to nearly $17,000 per employee each year that banks and credit unions are losing," said Kevin Green, COO of Hapax. "That's staggering – especially for smaller financial institutions that are struggling with a lack of resources and expertise to keep up with an ever-changing regulatory and competitive environment. Furthermore, that is time that can be better spent advancing their business goals and serving their customers and communities."
While data and compliance challenges are a reality for banks of all sizes, limited resources place a disproportionate burden on small and mid-sized financial institutions. According to the report, 61% of respondents feel that compliance burdens are disproportionately greater for small to mid-sized banks and credit unions compared to larger institutions. This is not surprising, given that nearly half (48%) of respondents say that their bank/credit union lacks adequate resources to keep up with regulatory changes. In fact, those at institutions with 100 employees or less were 15% more likely than average to say this.
Bank employees see AI as the solution. Among respondents, 53% believe AI would improve job satisfaction, 47% think it would boost their confidence in their work, 43% see it as helping build stronger client relationships, and 61% feel it would enhance productivity. Perhaps this is why Hapax is seeing rapid adoption of its purpose-built generative AI platform. Launched in April, it has already onboarded more than 20 U.S. banks.
"Bankers don't want and can't have magical AI solutions. An important part of our product is that it's built for bankers based on validated questions and answers from other bankers, giving users confidence that the decisions they are making are the right ones," said Green. "A big promise of fintech was that it could be the great unifier, but instead – for years now – technology has been the divider between big banks and small banks. It's a story of the haves and the have-nots. Our mission is to change this. To use technology to bridge gaps, not widen them. Through AI, this can be achieved because bridging that gap starts with equal access to information, and this is just what Hapax offers."
A deep dive into The Documentation Dilemma gives even more insight into the challenges facing the banking industry today. Additional key findings include:
- Time lost negatively impacts customers and communities: More than three-quarters (78%) of respondents find it challenging to locate the information they need at work. 82% say asking others for information hinders their job efficiency. Specifically, 75% have had to ask a peer for information they couldn't access, 74% needed clarification, and 66% found their information outdated. This has a domino effect that impacts customers. 62% report that time-consuming document tasks hinder their ability to serve the community and develop stronger customer relationships.
- Administrative tasks drain employee satisfaction: 43% report difficulty finding information and managing documents negatively affects job satisfaction, and 32% say it leads to decreased work-life balance, which can lead to turnover. Compliance issues can also pose security risks and reduce public trust, as 79% say that information disorganization reduces public trust in financial institutions.
- The banking sector is grappling with a significant labor crisis: A substantial 61% report facing staffing challenges, and 64% have found hiring particularly difficult over the past 12 months. This trend is likely to continue, with 65% of businesses predicting ongoing hiring challenges in the next year. Among workers in small to mid-sized banks and credit unions, 39% are thinking about leaving their current positions. Additionally, 38% of employees in the financial services industry are considering leaving the industry altogether. This underscores the need for solutions that promote efficiency.
For additional information and to access the complete report, please visit https://www.askhapax.ai/research. To learn more about Hapax and how it is changing the game for financial institutions, please visit https://www.askhapax.ai.
Methodology
The Documentation Dilemma findings are based on a survey of 600 people who live in the U.S., are 18 and up, and are employed or have recently been employed at a small to mid-sized bank or credit union.
About Hapax
Hapax is an unprecedented AI for the financial services industry. Leveraging an exclusive partnership with CBANC, it utilizes 13 years of proprietary data, consisting of 20,000+ documents, 10,000+ hours of videos, and 230,000+ strategic conversations between bankers. This allows the product to deliver accurate and validated responses needed by the heavily regulated banks. Via its product, Hapax aims to bridge the information gaps between big banks and smaller banks by making access to complex information ubiquitous and immediate. To learn more, visit https://www.askhapax.ai.
Media Contact
Rebecca Reese, Kickstand, (603) 305-4155, [email protected], https://www.askhapax.ai/
SOURCE Hapax
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