Harald Grumser: The degree of IT support is quite high, of course. But what is almost universally lacking is a uniform output strategy for the front and back office as well as individual customer communications. The approach is still very scattered and decentralized.

The basic problem is that many banks have a very heterogeneous infrastructure due to past mergers and acquisitions. In the major financial institutions, the number of different systems that generate documents is even greater, so they are even more susceptible to misuse of data. For example, if I have 50 departmental document output applications in the company and run 10 output channels, that leaves me with 500 interfaces to constantly maintain.

Add to that the extremely complex and constantly growing requirements for traceability and revision security. If the company has no central hub that registers every document that is created and sent, then it is also difficult to check for compliance. The risk is too great that a non-standard document, created in a branch office, for example, will not comply with current legal requirements or corporate identity.

In short, the output management (OM) structures in most banks today are so complex and disparate that it is becoming more and more difficult to achieve 100% compliance and still be able to integrate new output channels rapidly in response customer requests.

Harald Grumser: Yes, because it significantly reduces the number of interfaces and hence potential avenues for data loss, inadequate traceability and poor compliance with regulations are avoided. The best approach is to separate document creation and distribution. Application development concentrates on implementing the technical requirements for document creation, whereas conversion, modification and output fall to the central output service. Not only is the department free of programming tasks, but a central hub provides a reliable overview of what documents have been sent out via what channels. This monitoring function cannot be underestimated. The data also reveals other potential optimization measures, such as whether some of the physical mail could be digitized.

In other words, output management today is becoming the customer communications hub for every type of document and every output channel, whether digital or hardcopy.

Harald Grumser: The reduced complexity not only benefits IT, but document creation itself. Instead of x number of different systems, there is a single software program that not only processes any format, it also generates visually appealing, barrier-free "intelligent" documents – documents that are revision-proof, can be output on any channel, and offer features for downstream processing. Every document passes through a common gate, thus allowing even decentrally created documents to be collected and centrally archived. The result is consistently high quality and uniform standards that would otherwise have to be ensured in each individual application.

Harald Grumser: Most banks are already doing so by using association data centers and their own subsidiaries. But outsourcing is not used across the board. Campaign management is typically outsourced, wherever form letters are printed and sent out by a local provider. But it would be better to mass process these documents as well, i.e., to collect the documents from the individual applications and send them out centrally, and archive them right away if needed. Whether it is done internally or externally is really secondary.

Harald Grumser: That depends primarily on the degree of flexibility required and where the core business is headed. How often do processes change? Does the product portfolio change often? How quickly must the company respond to new market conditions and reconfigure workflows? As a rule of thumb, the more standardized the processes and higher the document volume, the more profitable outsourcing is. Any company that sends out regular high-volume mass mailings would do well to rely on a third party. The major service providers are known for managing large amounts of data extremely well and, because of the volume, are able to provide their services at a reasonable cost. Selecting the right provider comes next.

On the other hand, outsourcing all of distribution logistics is not always best, depending on how closely output management is tied to IT. A company that has already integrated numerous OM components into its IT landscape via service interfaces may be ready for full outsourcing. At least the company has a very clear picture of its core competency and competitive advantage. Quickly switching to another output channel to accommodate a customer who suddenly wants monthly invoices electronically is certainly easier in-house than using an external provider specialized in high-volume transactional printing.

Harald Grumser: Any company looking to outsource document processing must first analyze its output management structures in detail. What is the document volume? What physical and electronic communications channels are used where and how intensively? What output management trends play a role in the business?

Only then can the search for the right service provider begin. The following basic principle applies: the greater the flexibility needed, the smaller the service provider. Unlike large providers, smaller ones can establish new processes more quickly, such as temporarily switching to an alternative output channel for just a few documents. If your document volume is generally low and you want to outsource as many processes as possible, a smaller but more broadly positioned provider is best.

However, if the processes are highly standardized and rarely subject to change, the larger players enter the picture. The service provider should always communicate with the company on a peer level and offer the best available data security, certified if possible according to national and international guidelines.

Harald Grumser: I tend to be very positive, but in this case I think their fears are justified. Nobody talks about outsourcing outside of the EU any more. It is certainly compelling from a cost point of view, but the financial institution's data protection and information security people would practically have to be bound and gagged. But all kidding aside, to be better protected against data espionage, document processing should be standardized and harmonized as much as possible to keep points of vulnerability few and far between. You could set up a workflow, for instance, where the employees retrieved each document from the central archive for display on their local computer, but would not allow them to print or otherwise output it. By the way, the major outsourcing providers do have very high security standards, sometimes better than the companies who use them.