Document Collection: A Complete Overview

In this article, we cover everything you need to know about document collection and how you can make the process easier with intelligent automation.

  • Brianna Valleskey
    Head of Marketing
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What do a credit union, insurance company, and mortgage lender have in common? They rely on collecting documents to verify the identity of their applicants and approve potential customers. 

The problem: Requesting, collecting, and verifying each document is tedious and error-prone.

Thanks to technological advancements, though, this necessary task no longer has to be so time-consuming. Let's explore document collection and how you can make the process easier with automation. 

What is a document collection?

A stack of collected documents that are used to verify someone's identity.

Document collection is the gathering of paperwork from applicants looking for a personal loan, credit card, or new home. This may include:

  • Driver's licenses
  • Birth certificates
  • Bank statements
  • Passport
  • Paystubs
  • Checks (for deposits)

The documents gathered depend on the type of application and the vendor's requirements. Most request a mix of identity and financial records for verification. 

What is the purpose of document collection?

The goal of document collection is to identify the applicant and ensure they can afford to finance—while also preventing fraud. In the past, manual review processes were used to determine the authenticity of individual documents (such as cross-referencing bank statements to match the fonts, layouts, and formats).

But fraudsters have sophisticated software tools to create and manipulate documents. This makes it next to impossible to detect document fraud. As a result, financial institutions risk falling prey to credit card or loan fraud. 

Vendors can decrease their risk exposure, however, with software that detect these potential threats. But more on that later. 

How do you collect client documents?

Today, most companies gather records from clients using online tools. This enables applicants to submit documents digitally via an online platform using a scanner, email, or mobile device. 

In the past, banks, lenders, and realtors had to manually collect documents in person or via snail mail. This took weeks to gather all the necessary information from applicants. 

Thanks to automated document collection, the process is now speedier and less taxing for the vendor. This is especially true when you're using a system that auto-detects fraud. 

What is automated document collection?

An person uses a document collection application on their cell phone.

Automated document collection uses digital tools to gather and store client documentation. In most cases, the client uses their printer or smartphone to take photos of documents to upload to the vendors' system.

This makes it easier and faster for clients to get the paperwork to you. Plus, it minimizes handling errors and lost documents. 

In the end, automated document collection improves the client's experience and streamlines the process for the vendor. The result: Productivity soars, and applicants receive faster decisions.

In finance, multiple departments handle the same documents. With document collection automation, sharing files is seamless. It also enhances security, preventing documents from falling into the wrong hands. 

Why is automated document collection important?

Collecting paperwork from clients is critical to the lending process. It's necessary to complete due diligence measures and run risk-based assessments.

Without the proper documents, applications are delayed or outright denied. And entrusting the mailman for timely delivery risks it showing up late (or not at all). 

This isn't an issue when you use automated document collection. Adopting this system into your workflow saves time, minimizes breaches and disputes, and enhances the overall experience for everyone.

Automated document collection is a more efficient method to gather records from your clients without risking speed or security. 

How does automated document collection work?

Automated document collection uses software to gather documents from clients and often includes a portal that applicants use to upload their documents. 

They do this by uploading images of their documents, then the system organizes the uploads based on the category. Some platforms detect whether a document is inaccurate, missing, or unclear. And others will send automated reminders to the applicant. 

The vendor sends the client a link via email or SMS to complete the document upload. The documents are then converted into the PDFs.

May document collection platforms detect categorical information, including addresses, names, dates, and account numbers. Some will even extract data and place it into your CRM or other database. 

Optical character recognition (OCR) technology

Document collection software uses OCR technology to "read" and convert text on images, typed files, and handwritten documents and convert them into editable and searchable documents. 

This removes the need to manually type information from scanned documents into databases, reducing human error. 

What is the advantage of using software for document collection?

A banker collects documents from an applicant in person.

 Poor document management is intolerable in the finance industry. It leads to delays, poor client experiences, and eventually, revenue cuts. Businesses nowadays simply can’t afford it.  

So to avoid this, banks, lenders, and other financial institutions use software to gather and manage documents. However, if you're not convinced automated document collection is right for you, here are several benefits. 

Decrease inbox clutter

Submitting documents as email attachments is another way to speed up application processes. But it's not an efficient or secure one one. With automated document collection tools, documents bypass your inbox and go straight to your database. 

Everything's neatly categorized and filed, so you can focus on verification and number crunching. 

Manage more requests for documents

Processing as many clients as possible is good for business, but bad for productivity. Attempting to process an overload of applications daily is tiring and stressful. 

This is especially true when you use manual methods to process documents. Automation handles the brunt of the work, so you get more clients approved faster. 

Improve application workflows

Bottlenecks slow progress on both ends—you waiting for clients to mail or fax documents, and clients waiting for you to process their application. This seemingly never-ending cycle frustrates everyone involved. 

Automated document collection speeds up your workflow and increases turnaround times, allowing you to process applications faster, so you can focus on chasing new clients.

Create better visibility (while maintaining compliance)

Client documents must pass through several hands before approval. Getting the paperwork to everyone without risking loss or data breaches is tricky, whether you send them via email or in person. 

With an automated document collection product, client paperwork pushes through to the next department to ensure the right eyes see the paperwork. Having an accurate and comprehensive paper trail prevents confusion and creates much-needed organization. 

Platforms also comply with GDPR regulations by keeping client data safe. Plus, you can set restrictions on who's authorized to see what. Attachments sent to the wrong person or, worse, going missing are now a thing of the past. 

Reduce human errors

Tired eyes. Misreading text. Skipping fields. It happens to even the most well-trained staff. Unfortunately, mistakes like these decrease efficiency and postpone client approvals. 

By using automation software, you have eyes that never get tired and rarely make mistakes. If the handwriting and text are legible, then it'll record it accurately. 

Approve applicants with confidence

Determining a client's creditworthiness takes time.Or at least, it used to when you had to manually inspect bank statements line-by-line. Platforms like Inscribe pull key details from financial documents to give you confidence to approve (or deny) applicants faster. 

Who benefits from document collection software?

A person reviews a loan agreement document.

 The finance industry isn't the only sector benefiting from document collection tools. You'll also find it used in:

  • Legal offices
  • Real estate agencies
  • Sales departments
  • Human resources
  • Manufacturing companies
  • Government agencies
  • Healthcare facilities

As well as any organization that collects contracts, hiring papers, financial forms, legal documentation, healthcare forms, and other types of paperwork. 

Here's an overview of how each department can use document collection automation to improve workflows. 

Document collection for salespeople

There's a ton of paperwork involved the sales process. Keeping up with it all is difficult, if not impossible. A typical day consists of drafting, reviewing, and signing off on documents. Operating with old-school printers and scanners slows the process and increases the risk of misfiled paperwork.

These problems disappear with automation tools. These platforms quicken the review process from start to finish. You specify what documents are needed, by when, and who needs to see them. 

Document collection for admins

Paperless onboarding used to be a human resource department’s dream. Now, it's a reality. Administrative professionals no longer have to review and insert data into systems manually, nor do they have to wait days to receive documents from applicants in-person. 

HR departments can find, interview, and process candidates virtually, which is critical post-COVID and with the rise in remote work. Everything's in the system, properly filed, and easily shareable across teams — or kept for later use when a new job opens that suits an applicant. 

Document collection for business owners

Sending and receiving contracts, invoices, and other paperwork is a daily chore for businesses. The bigger the company, the more paperwork crossing its borders. Things become chaotic fast, and it's up to your people and processes to maintain order. 

But this is challenging to achieve as you scale. With automation tools, you can prevent these problems at the gate and ensure organization across departments (sales, admin, HR, and management). 

Adopt document collection software for your company

Dropbox. Google Drive. DocuSign. ShareFile. These are all tools used to collect and manage documents. Some even collect signatures on your behalf. The problem? They're only great at one thing. 

Having an all-in-one solution means no juggling multiple tools and accounts. It's a seamless system your teams use to perform their duties. 

With Inscribe, it's easy to collect documents, verify them, and cross-reference key details. It even performs a credit analysis for swift approvals. This is critical when you're in the business of loans, real estate, and credit cards. 

Now that these applications occur over the phone and internet, it's vital to have software to assist with fraud detection.

Inscribe streamlines this process by checking for fraud and determining an applicant's creditworthiness after analyzing their spending habits and money management. It's a comprehensive view of each applicant, empowering you to make approvals with confidence. 

Want to see how it works? Talk to one of our experts today.

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